Coca-Cola HBC Misses Q1 Revenue Growth Estimates as Inflation Pressures Sales
Q1 Financial Performance and Market Challenges
May 7 (Reuters) - Bottler Coca-Cola HBC AG missed first-quarter organic revenue growth expectations on Thursday, as customers opted for cheaper, bundled drinks amid high inflation and cost of living pressures in its established markets.
Impact of Inflation and Consumer Behavior
The bottling partner of Coca-Cola in Central and Eastern Europe and African markets has been grappling with softer demand as consumers navigate macroeconomic uncertainty and elevated inflation tied to the Iran war.
Promotional Strategies and Marketing Efforts
In response, the company has stepped up promotions and personalised marketing efforts.
Revenue Growth and Market Performance
Group organic revenue growth stood at 11.6% for the quarter ended March 28, below consensus of 11.8% forecast in a company-compiled poll. Growth in established markets, including Austria, Cyprus and Greece, came in at 7.3%, below estimates of 8.1%.
Regional Revenue and Marketing Costs
Swiss-based Coca-Cola HBC, which packages drinks for brands such as Sprite, Fanta and Monster Energy, said revenue in its European markets also faced a partial headwind from higher marketing costs as Easter fell earlier in the quarter.
Finance Costs and Guidance Update
The company raised its guidance for net finance costs to 45 million-65 million euros ($52.9 million-$76.4 million), citing costs related to its stake purchase in Coca-Cola Beverages Africa.
($1 = 0.8510 euros)
(Reporting by Simone Lobo in Bengaluru; Editing by Sumana Nandy)
