Coca-Cola Co posted better-than-expected quarterly revenue as it increased spending on marketing and advertising, driving up sales in emerging markets such as China.
According to chief executive Muhtar Kent who spoke on CNBC yesterday, the company was beginning to get its momentum back.
Coca-Cola, like PepsiCo Inc, had been battling falling soda sales in developed markets such as the US where a marked preference for healthier options such as juices was evident.
To regain lost ground, Coke would be launching its biggest promotional programme in history for the soccer World Cup, chief financial officer Gary Fayard told Reuters.
Coca-Cola is one of the key sponsors of the event, which kicks off in June in Brazil.
The company's shares were up 4 per cent, bringing them back to where they were about a year ago.
Coke said in February it expected to save $1 billion annually through productivity increases by 2016, and would redirect much of the savings into increased advertising and marketing.
Global case volumes were up 2 per cent in the quarter, with those in China increasing 12 per cent due to increased marketing around the Chinese New Year, the company said yesterday.
After the fourth-quarter report, Kent promised improvement and implemented a cost-cutting programme that had borne results which was quite evident. Global sales volume increased 2 per cent, and an emphasis on new package sizes helped deliver a 2 per cent boost to pricing.
Adding it all together, profit excluding some items stood at 44 cents a share in the three months ended 28 March, the company said in a statement today.
Volume in North America did not change much in the first quarter, against a 1 per cent decline in the fourth quarter. Emerging markets saw sales strengthen which, included a 12 per cent gain in China.
The emerging markets all slowed down last year, Fayard said in an interview, adding a lot of those emerging markets were starting to slowly recover.
The results also did not include a boost from Easter sales with the holiday not falling in the first quarter this year, Fayard said.
That bid well for sales in the current quarter, he added.