Coke’s N. American sales rise fuels market share gains over Pepsi

NEW YORK — Coca-Cola Co. topped profit and revenue estimates for the third quarter on a 3% rise in North American sales, gaining market share over arch rival PepsiCo, Inc. as it sold more Sprite, teas and coffees.

Over the course of several years, both companies have shifted their strategy, focusing on selling lowcalorie versions of their colas and buying healthier beverage brands, as consumers move away from sugary sodas.

But Coke seems to be winning the so-called cola-wars by adopting a more aggressive approach to selling juices, teas and vitamin water and taking the lead on franchising its bottling operations to cut costs.

The company had a 22% share of the North American nonalcoholic drinks market last year, ahead of PepsiCo’s 19%, according to Euromonitor data.

In the third quarter, Coca-Cola’s profit rose 38% to $1.45 billion and North America beverage sales rose to $2.75 billion.

In contrast, PepsiCo reported a drop in quarterly beverage sales in North America for the first time in two years, hit by weak demand for Gatorade and marketing missteps.

Coca-Cola has also reined in costs by refranchising its bottling operations — a move has helped it eliminate costs of operating a low-margin business, and given it a more predictable revenue stream.

General and selling expenses were down 20% in the third quarter, while cost of goods sold fell 18%.

Recent acquisitions of non-soda beverages such as salty mineral water brand Topo Chico, Honest Tea and Unilever’s AdeS soy-based beverages have increased the options Coca-Cola can offer to consumers.

Excluding items, the company earned a profit of 50 cents per share, beating the average analyst estimate by a cent, according to Thomson Reuters I/B/E/S.

Revenue fell 14.6% to $9.08 billion due to the refranchising, but beat the average estimate of $8.72 billion.

Coca-Cola’s shares, up 11% this year, were largely flat on Wednesday. —