Coca-Cola Consolidated Inc (COKE, Financial) released its 8-K filing on October 30, 2024, detailing its financial results for the third quarter and first nine months of 2024. As the largest Coca-Cola bottler in the United States, Coca-Cola Consolidated Inc sells nonalcoholic beverage products, primarily under a license from Coca-Cola Co., across various states including North Carolina, South Carolina, and parts of Alabama, Georgia, and others. The company operates in two segments: Nonalcoholic Beverages and All Other.
Performance Overview: Sales Growth Amid Volume Challenges
The third quarter of 2024 saw Coca-Cola Consolidated Inc achieve a 3.1% increase in net sales, reaching $1.77 billion compared to $1.71 billion in the same period of 2023. This growth was primarily driven by a 5.8% increase in Sparkling beverage sales, despite a 2.1% decline in standard physical case volume. The company attributes this volume decline partly to a shift in distribution methods for Dasani water, which impacted reported case sales.
Financial Achievements and Strategic Investments
Gross profit for the third quarter rose by 5.5% to $698 million, with a gross margin improvement of 90 basis points to 39.5%. This was supported by pricing actions and stable commodity prices. The company also reported a 5% increase in income from operations, totaling $227 million, with an operating margin of 12.9%.
In terms of strategic investments, Coca-Cola Consolidated Inc completed the purchase of its leased production facility in Nashville, Tennessee for $56 million, marking a significant step in owning all its production facilities, which are considered strategic assets.
Income Statement and Cash Flow Highlights
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Sales | $1,765.7 million | $1,712.4 million | 3.1% |
| Gross Profit | $698.0 million | $661.6 million | 5.5% |
| Income from Operations | $227.1 million | $216.3 million | 5.0% |
| Net Income | $115.6 million | $92.1 million | 25.5% |
Net income for the third quarter was $115.6 million, a significant increase from $92.1 million in the previous year. Cash flows from operations for the first nine months of 2024 were robust at $707.9 million, reflecting strong operational performance.
Operational Challenges and Strategic Outlook
Despite the positive financial results, Coca-Cola Consolidated Inc faces challenges, including a decline in Still beverage volume and the impact of Hurricane Helene on its operations in Western North Carolina and Eastern Tennessee. The company is actively supporting affected communities and is focused on improving the performance of its Dasani and BodyArmor brands.
“Our third quarter results reflect the power of Sparkling volume growth, margin improvement and continued strong commercial execution,” said Dave Katz, President and Chief Operating Officer. “While we have opportunities to improve the performance of our Dasani and BodyArmor brands, we’re excited about upcoming Still category offerings designed to strengthen this segment of our business.”
Overall, Coca-Cola Consolidated Inc's strategic focus on operational fundamentals and community support, coupled with its financial achievements, positions it well for future growth in the competitive non-alcoholic beverage industry.
Explore the complete 8-K earnings release (here) from Coca-Cola Consolidated Inc for further details.
