Increased pricing has driven a 3% underlying rise in second quarter sales at Coca-Cola (KO), though the refranchising of its bottling opperations caused a double-digit headline sales decline.

Net revenues declined 16% to $9.7bn in the three months to 30 June, impacted by a 17% headwind from the ongoing refranchising of bottling territories and a foreign currency exchange headwind of 2%.

Organic revenues were up 3% on price/mix growth of 3% and flat concentrate sales. Core business organic revenues grew 4%, and core business price/mix grew 3%, driven by sparkling soft drinks with balanced performance across the other category clusters.

Total unit case volumes were flat, but with positive performance in four of its five categories. Overall volumes continue to be impacted by macroeconomic conditions in a number of Latin American markets, notably Brazil and Venezuela which dragged total volumes back by 1 percentage point.

Developed markets saw volume growth 1 percentage point ahead of the consolidated results, led by Mexico and Spain.

Coca-Cola said in gained market share in sparkling soft drinks; juice, dairy, and plant-based beverages and tea and coffee.

Operating margin declined more than 335 basis points, but comparable operating margin expanded more than 375 basis points driven by divestitures of lower-margin bottling businesses through its ongoing refranchising initiative and cost control.

The group also said it achieved “substantial progress” against its strategic priorities during the quarter, including transforming its beverage portfolio, reducing our sugar footprint, and strengthening our global system.

Building on the success we have seen for the new recipe in over 25 markets around the world, including Great Britain and Mexico, we plan to introduce Coca-Cola Zero Sugar to the US market in August.

It said its full year underlying performance outlook remained unchanged.

President and CEO James Quincey commented: “Our second quarter results demonstrate continued progress against the strategic priorities we have laid out to accelerate the transformation of our business into a total beverage company with balanced growth across a consumer-centric portfolio.

“Not only did we see strong performance during the quarter in rapidly expanding areas of our Company, such as our innocent juice and smoothie business in Europe, our organic revenue growth in sparkling soft drinks was led by innovation in and marketing support for our low- and no-sugar options like Coca-Cola Zero Sugar, which continues to roll out around the world.

“Our performance gives us confidence that we will achieve our full year financial objectives even in the face of challenging conditions, and also demonstrates further success in evolving our portfolio to meet changing consumer tastes and preferences. While we are in a period of substantial transformation and change that is never easy, I am encouraged by the spirit of our people and partners as we reinvent the company for the future.”

Coca-Cola shares opened down and fell as low as $44.31 in early trading before recovering to trade flat at $45.22.

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