Coca-Cola loses its fizz as sales targets are cut again

Coca-Cola, the world's largest soft-drink maker, said yesterday that slumping sales in the US and Europe had prompted it to lower key long-term earnings and sales targets.

The news, delivered by Coke's new chief executive, Neville Isdell, to analysts and investors in New York, was the latest gloomy forecast to come from the beverage giant.

Coke also attributed the reduction in its forecasts to increased competition from its main rival, PepsiCo, which has been able to continue to grow its business despite the explosion of alternative soft drinks into the market. Coke said it expected annual earnings per share (eps) growth in the high single digits in percentage terms and annual unit case volume growth of between 3 per cent and 4 per cent over the long term.

The company's previous long-term targets were 11 per cent to 12 per cent eps growth and 5 per cent to 6 per cent volume growth.

Coke has been under pressure from Wall Street analysts to trim its guidance to a more realistic figure in light of the tough conditions facing the company in many of its more than 200 markets around the world. The Atlanta-based company earned $1.77 per share in 2003, marginally higher than the $1.64 per share it made in 1997. Earnings per share, however, nosedived 22 per cent in the third quarter of 2004.

Mr Isdell, who is Irish and joined Coke in 1966, returned from retirement in June to try to turn around Coke's fortunes.

He said he would boost spending on marketing and developing new products by $350m to $400m a year starting in 2005. Coca-Cola sales gains have averaged 2.3 per cent annually in the past five years compared with 3.8 per cent for PepsiCo. The increased spending will accelerate Coke's sales growth in emerging markets such as India and China as well as increase training for employees to address the company's lack of management depth, Mr Isdell said.

Coke stopped the practice of making regular forecasts in 2002. In September, Mr Isdell departed from the policy by saying that second-half results would miss forecasts.

Ineffective advertising, price increases and a workforce suffering from poor morale have hurt sales in the US, Coke's biggest market.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...