Soft drink giant Coca-Cola (NYSE:KO) reported second-quarter results on Tuesday morning. Coke's management offered a detailed plan for managing through the COVID-19 pandemic, supported by one simple but telling chart.

Coca-Cola's second-quarter results by the numbers


Q2 2020

Q2 2019


Analyst consensus


$7.2 billion

$10.0 billion


$7.2 billion

GAAP net income (loss)

$1.76 billion

$2.63 billion



Adjusted earnings (loss) per diluted share





Data source: Coca-Cola. GAAP = generally accepted accounting principles.

Coca-Cola's case volume fell 16% year over year. COVID-19 lockdowns crushed the company's sales in restaurants, theme parks, and other away-from-home channels. At-home sales through outlets such as grocery stores and retail clubs increased modestly, but the difference wasn't large enough to make up for the restaurant losses.

The view from the top

CEO James Quincey used the following simple slide to illustrate how the pandemic is affecting Coke's business in general terms:

A chart in which as levels of lockdown go down, case volumes go up. A caption at the bottom says: We expect this correlation to continue in the back half of the year.

Image source: Coca-Cola.

The concepts on display here are simple enough: Heavy lockdowns hurt Coca-Cola's sales more, especially in markets where a lot of the company's sales are poured through soda fountains. Getting back to business as usual will boost Coke's case volume shipments, and many markets saw exactly that dynamic play out in the second quarter.

Using this bird's-eye view as a backdrop, Quincey explained how the global health crisis is playing out in various markets around the world.

"As we went through the quarter and restrictions generally eased globally, our business saw improvements, from the 25% volume decline in April to the single-digit declines we are seeing now in July," he said. "What we found is that as the outlets start to open, the business starts to flourish again."

Quincey said that business has improved from month to month since the market bottom in March, but the coronavirus situation remains fluid and flare-ups are forcing governments to issue new lockdown orders in some markets right now.

"The reality remains that the virus is not completely under control," he said. "If we saw the virus starting to be under control, we would imagine, yes, we would see sequential improvement through the months and quarters going forward. But we cannot discount that there might be further waves of lockdowns, partial or full."

A red charting arrow bounces skyward off a black trampoline.

Image source: Getty Images.

That being said, Quincey believes that the second quarter will go down as the reporting period with the worst financial impact from this health crisis, and that the only way from here is up.

"I think the governments are getting smarter about how they apply public health measures and getting things under their control, such that we're unlikely to see the whole world entering a lockdown at the same point in time," Quincey said.

It's refreshing to see the CEO of a global industry giant recommending a careful return to normalcy. This company would rather do the right thing than cut corners for a quicker -- but unsustainable -- recovery. Coca-Cola can take a manageable financial hit in the short term, and thrive in the long run. That's a respectful attitude toward human life ---- and also good business, even if it hurts in the short term.

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