Sorry, Buffett: Coke’s Sales Fizzle, Shareholders’ Anger Sizzles
The secret is out: Coca Cola’s (NYSE:KO) sales further fizzled in 2013′s fourth-quarter. The company reported Tuesday that sales fell 3.6 percent to $11 billion, missing analysts’ expectations. Net income dove 8.4 percent to $1.71 billion, or 38 cents a share, from $1.87 billion, or 41 cents a year earlier. That marks the fourth straight quarter of declining sales for Coke, and not only is CEO Muhtar Kent not happy — shareholder Warren Buffett isn’t either.
Last April at Coke’s annual meeting, Bloomberg reports that Buffet made the case that the Atlanta-based company must not get complacent about its success. The 83-year-old advised Kent to stay ahead of competitors by staying proactive, and explained to his audience, “I like to study failure. We want to see what has caused businesses to go bad, and the biggest thing that kills them is complacency. You want a restlessness — a feeling that somebody’s always after you, but you’re going to stay ahead.”
With Coke’s latest earnings release Tuesday, it is clear that the company couldn’t translate Buffett’s motivation into actions. Following the report, Coke’s stock plunged 3.8 percent, marking the biggest one-day drop the company has suffered since August 2011. The shares slid 9.3 percent this year through Tuesday, Bloomberg reports, and they were sitting down 0.80 percent at $37.17, as of 12:30 p.m. Wednesday.