Stockpiling to guard against a disorderly Brexit gave Coca-Cola’s revenue and adjusted earnings an additional boost during the first quarter, helping the beverages group squeak past Wall Street forecasts.

Coca-Cola reported a 5 per cent year-on-year increase in net revenue to $8 billion (€7.1 billion) and said an estimated 2 points of the sales growth was “primarily related to bottler inventory build in order to manage uncertainty related to Brexit”. The company added that earnings per share had benefited to the tune of 2 per cent for the same reason.

Earlier this year, management at Coca-Cola European Partners (CCEP), the world’s biggest independent Coca-Cola bottler, revealed they had begun stockpiling ingredients in the United Kingdom to minimise any disruption that might stem from EU departure. The UK represented about one-fifth of CCEP’s overall sales, which were €11.5 billion in 2018.

Although the actual Brexit date has since been pushed back by about six months, management at CCEP highlighted the potential for tariffs or delays in transportation as the biggest risks they faced. More broadly, the uncertainty of Brexit has prompted many businesses to begin stockpiling supplies.

Overall, Coca-Cola chief executive James Quincey said he was “encouraged” by the group’s results and that “we remain confident in our full-year guidance”, which is for approximately 4 per cent growth in organic revenues and adjusted earnings to be in the range of a 1 per cent decline to 1 per cent increase a share.

The company warned earlier this year it expected sales growth to slow in 2019, and it struck a cautious tone about its non-north American markets that generate almost two-thirds of its revenue.

Coca-Cola’s total net revenue in the three months ended March 29th of $8 billion edged past the median estimate of $7.9 billion in a survey of analysts by markets data provider Refinitiv. Adjusted earnings of 48 cents a share was up 2 per cent from a year ago and despite strong currency headwinds the company beat market forecasts by 2 cents.

The Atlanta-based firm said global sales of sparkling soft drinks grew 1 per cent, thanks to a strong performance from its eponymous brand as well as Coke Zero. Its water, enhanced water and sports drinks unit – a key focus as the company shifts from reliance on sugary soft drinks – marked a 6 per cent rise in revenue.

Volumes at its juice, dairy and plant-based beverage unit were “even” as strong performances for some of its brands in Mexico and India were offset by weakness for products in the Middle East. Tea and coffee volumes were also flat as a decline in its tea business in Turkey countered the benefit of new product launches in Japan and China.

Coca-Cola shares were up 3.1 per cent in pre-market trading on Tuesday morning. – Copyright The Financial Times Limited 2019