What's going on?

Coca-Cola�s stock had its worst day in a decade on Thursday, falling 8% after the company reported a decidedly flat quarter and a weak 2019 outlook (tweet this).

What does this mean?

Coca-Cola grew its profit by 21% last quarter, as investors expected. But the details took some of the fizz out: the company�s overall sales volumes didn�t grow at all compared to last year, and actually shrank in North America (responsible for over 40% of its business, according to FactSet) and at Coke�s signature sparkling drinks division.


2019�s not likely to get much sweeter: Coca-Cola�s forecasting lower revenue growth than investors were predicting. With a strong US dollar likely to reduce the value of the 60% of Coke�s total profit that�s made overseas, the company�s 2019 profit prediction also came in lower than expected.

Why should I care?

For markets: New products = higher prices.

Coca-Cola�s falling volumes were likely down in part to the company raising prices by 4% on average last quarter. It�s something other companies selling �staples� have struggled with of late: retailers who sell products on to customers want to keep prices low and competitive. But Coca-Cola found ways to increase prices (and profits): new products and smaller package sizes (partly in response to sugar taxes) also capitalize on consumers� ongoing shift toward healthier foods and drinks.

The bigger picture: Retail dipped in December.

New data on Thursday showed an unexpected drop in December�s US retail sales � the biggest in almost a decade. Surprised investors sold off stocks on fears that the economy may be weaker than previously suggested. But there may yet be a further twist in the retail tale: �Mastercard data showed an increase in US online purchases in November and December, Amazon had a record holiday season, and some early signs from big retailers were positive. American giant Walmart�s latest results are due on Tuesday: these should give a big clue about the true state of retail�s health.