Unfortunately for its shareholders, the Coca-Cola Amatil Ltd (ASX: CCL) share price is not having a great end to the week.
In morning trade the beverage company's shares have fallen almost 10% to $9.69 following a disappointing Easter trading update.
According to the release, year-to-date trading in its Australian Beverages segment has been weaker than last year, with all of its channels experiencing volume and price pressure as a result of competition and category trends.
In light of this, management expects underlying net profit after tax to decline in the first-half of FY 2017.
While management does expect things to improve in the second-half, at this point in time they predict full-year underlying net profit after tax to be in line with last year's result.
Should you buy the dip?
As recently as the end of last month, I felt Coca-Cola Amatil's shares were expensive and at risk of a pull-back.
Whilst one has now come, I'm still not ready to invest. With earnings likely to be flat at best this year, 18x underlying earnings is still a little rich for my liking.
While management is working on initiatives with The Coca-Cola Company to address the structural changes in the market and rebalance its portfolio, until things improve I would focus on other consumer staples shares instead.
Shares such as a2 Milk Company Ltd (Australia) (ASX: A2M) and Tassal Group Limited (ASX: TGR) could be better options in my opinion.
