Coca-Cola Consolidated, Inc. (COKE): Results of Operations and Financial Condition
Coca-Cola Consolidated, Inc. (COKE) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 News Release Coca-Cola Consolidated Reports Second Quarter and First Half 2026 Results ■ Second quarter of 2026 net sales increased 11% versus the second quarter of 2025. ■ Gross profit in the second quarter of 2026 was $778 million, an increase of 5% versus the seco
How this was made
The 30-second read
Why it matters
Traders can update near-term expectations for beverage bottler earnings quality by weighing strong volume and revenue growth against weaker gross and operating margins, with aluminum input costs cited as the main headwind.
Market read
The release provides fresh quarterly financials and management commentary on cost pressures and balance-sheet progress, which can drive earnings estimate revisions.
What to watch
The filing attributes margin pressure to aluminum costs and tariffs, but does not quantify how much of the cost increase is expected to reverse or be mitigated in the back half, which is key for forward estimates.
Coca-Cola Consolidated Reports Second Quarter and First Half 2026 Results
Second-quarter volume and net sales growth were strong, but higher aluminum, labor, benefit and fuel costs compressed margins and left GAAP income from operations flat and net income lower year over year.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Volume, second quarterother | 97.6 million | – | 7.6% |
| Volume, first halfother | 184.6 million | – | 10.3% |
| Adjusted volume growth, first halfnon-GAAP | 7.1% | – | – |
| Net sales, second quarterGAAP | $2,052.4 million | – | 10.6% |
| Net sales, first halfGAAP | $3,899.1 million | – | 13.5% |
| Gross profit, second quarterGAAP | $778.4 million | – | 4.8% |
| Adjusted gross profit, second quarternon-GAAP | $788 million | – | 6.4% |
| Gross profit, first halfGAAP | $1,505.5 million | – | 9.9% |
| Gross margin, second quarterGAAP | 37.9% | – | decreased 210 basis points |
| Adjusted gross margin, second quarternon-GAAP | 38.4% | – | decreased 150 basis points |
| Gross margin, first halfGAAP | 38.6% | – | – |
| Income from operations, second quarterGAAP | $271.3 million | – | (0.3)% |
| Adjusted income from operations, second quarternon-GAAP | $284.9 million | – | increased $14.9 million |
| Income from operations, first halfGAAP | $508.9 million | – | 10.2% |
| Adjusted income from operations growth, first halfnon-GAAP | 4% | – | – |
| Operating margin, second quarterGAAP | 13.2% | – | decrease of 150 basis points |
| Adjusted operating margin, second quarternon-GAAP | 13.9% | – | decrease of 70 basis points |
| Operating margin, first halfGAAP | 13.1% | – | – |
| Net income, second quarterGAAP | $158.8 million | – | decline of $28.6 million, or 15.2% |
| Adjusted net income, second quarternon-GAAP | $187.7 million | – | decrease of $7.5 million, or 3.8% |
| Net income, first halfGAAP | $270.4 million | – | decline of $20.6 million, or 7.1% |
| SD&A expenses increase, second quarterGAAP | $36.7 million | – | 7.8% |
| SD&A expenses as a percentage of net sales, second quarterGAAP | 24.7% | – | – |
| SD&A expenses increase, first halfGAAP | $88.9 million | – | 9.8% |
| Income tax expense, first halfGAAP | $96.0 million | – | – |
| Effective income tax rate, first halfGAAP | approximately 26% | – | – |
| Cash flows from operations, first halfGAAP | $420.6 million | – | – |
| Capital expenditures, first halfGAAP | approximately $147 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Sparkling bottle/can, second quarterBroad-based volume gains across the portfolio, led by zero-sugar and flavor offerings; net sales growth was driven primarily by multi-pack, take-home aluminum can packages sold within large store, club and value channels. | $1,184.3 million | – | 9.7% |
| Still bottle/can, second quarterVolume growth was driven by Core Power, Powerade, smartwater and Monster. Still net sales were especially strong in convenience and value store channels; Dasani casepack water also contributed to growth. | $697.9 million | – | 11.5% |
| Sparkling bottle/can, first halfSparkling category volume increased 9.4%, or 6.2% on an adjusted basis, in the first half of 2026. | $2,274.1 million | – | 12.9% |
| Still bottle/can, first halfStill category volume increased 12.9%, or 9.8% on an adjusted basis, in the first half of 2026. | $1,303.0 million | – | 14.8% |
fiscal year 2026 outlook
- NoteCapital expenditures: approximately $300 million
What drove it
- Second-quarter volume growth was 7.6%, with enthusiasm around America250™ and the FIFA World Cup helping drive demand across the portfolio.
- Annual pricing actions and volume growth contributed to net sales growth.
- Sparkling growth was led by zero-sugar and flavor offerings, while Still growth included Core Power, Powerade, smartwater and Monster.
- The timing of the Fourth of July holiday was estimated to have increased second-quarter total volume by approximately 1.0%.
- The six additional selling days in the first half of 2026 accounted for approximately $30.0 million of the increase in income from operations and increased net income by approximately $22.6 million.
Concerns
- Gross margin declined to 37.9% from 40.0% as aluminum costs increased because of geopolitical conflicts, supply constraints and elevated tariffs.
- Elevated aluminum costs resulted in approximately $45 million in additional input costs compared with the second quarter of 2025 and outpaced annual pricing actions.
- GAAP income from operations declined $0.7 million in the second quarter and GAAP net income declined $28.6 million.
- Net income was adversely affected by non-cash fair value adjustments to acquisition-related contingent consideration and commodity hedging instruments, as well as higher net interest expense.
- SD&A expenses increased due to front-line wage investment, annual wage adjustments, employee benefit costs, fuel costs and higher variable expenses associated with volume.
What to watch
- Whether annual pricing actions and commercial execution offset continuing aluminum-cost pressure on gross margin.
- Whether the company delivers the expected moderation in operating-expense growth as it cycles incremental front-line teammate investment from the prior year.
- The fourth quarter of 2026 will include six fewer days than the fourth quarter of 2025.
- Capital expenditures are expected to be approximately $300 million in fiscal year 2026.
- The company reported its fifth consecutive quarter of market share growth, led by Sparkling, particularly zero-sugar and flavors, and Sports Drink categories.
Balance sheet and cash flow
- Cash flows from operations for the first half of 2026 were $420.6 million, compared to $406.2 million for the first half of 2025.
- During the first half of 2026, the company invested approximately $147 million in capital expenditures.
- During the second quarter of 2026, the company made early repayments of $125 million of principal on one of its term loans, for total year-to-date early term loan repayments of $275 million.
Analysis
Coca-Cola Consolidated reported strong top-line and case-volume growth in the second quarter. Volume increased 7.6% to 97.6 million, while net sales increased 10.6% to $2,052.4 million. First-half volume increased 10.3% to 184.6 million and first-half net sales increased 13.5% to $3,899.1 million. Management attributed the sales increase to volume, annual pricing actions and the timing of the Fourth of July holiday, which it estimated increased second-quarter total volume by approximately 1.0%.
Both beverage categories expanded, with second-quarter Sparkling bottle/can sales up 9.7% to $1,184.3 million and Still bottle/can sales up 11.5% to $697.9 million. Sparkling volume gains were led by zero-sugar and flavor offerings, while Still growth reflected performance from Core Power, Powerade, smartwater and Monster. The company also cited strong Still sales in convenience and value store channels. Management reported a fifth consecutive quarter of market share growth, led by Sparkling and Sports Drink categories.
Profit growth lagged revenue because input costs pressured gross margin. Second-quarter gross profit increased 4.8% to $778.4 million, but gross margin fell to 37.9% from 40.0%. The company cited increased aluminum costs from geopolitical conflicts, supply constraints and elevated tariffs, with these costs adding approximately $45 million versus the second quarter of 2025. SD&A expenses increased $36.7 million, or 7.8%, due to front-line wage investments, wage adjustments, benefit costs, fuel costs and volume-related variable expenses.
The margin pressure resulted in second-quarter GAAP income from operations of $271.3 million, down $0.7 million, while adjusted income from operations rose $14.9 million to $284.9 million. GAAP net income declined 15.2% to $158.8 million, and adjusted net income declined 3.8% to $187.7 million. The release identified non-cash fair value adjustments on contingent consideration and commodity hedges, plus higher net interest expense, as headwinds to net income.
Cash flows from operations for the first half were $420.6 million, compared with $406.2 million in the prior-year period. The company invested approximately $147 million in capital expenditures and made $275 million of year-to-date early term-loan repayments, including $125 million in the second quarter. The only numerical fiscal 2026 outlook was capital expenditures of approximately $300 million. Management expects operating-expense growth to moderate during the remainder of the year as it cycles prior-year front-line teammate investments, while the fourth quarter will have six fewer days than the prior-year fourth quarter.
Management, verbatim
We delivered a very strong second quarter, with volume growth of 7.6% and revenue growth of 10.6%, as enthusiasm around America250™ and the FIFA World Cup helped drive robust demand across our portfolio.
J. Frank Harrison, III, Chairman and Chief Executive Officer
Solid operational execution drove strong second quarter results, despite continued macroeconomic uncertainty and higher input costs that continued to pressure gross margins.
Dave Katz, President and Chief Operating Officer
Not in the filing
stated, not guessed- GAAP earnings per share and non-GAAP earnings per share
- Free cash flow
- Cash balance
- Total debt balance
- Debt maturity schedule
- Share repurchases
- Dividends
- Revenue guidance
- Gross-margin guidance
- Operating-expense guidance
- Tax-rate guidance
- Guidance for operating income, net income or earnings per share
- Prior guidance or previous outlook
- Adjusted gross profit prior-year value for the second quarter
- Adjusted gross margin prior-year value for the second quarter
- Adjusted income from operations prior-year value for the second quarter
- Adjusted income from operations absolute values for the first half
- Adjusted net income for the first half
- Segment operating income or segment margins
- Actual SD&A expense amounts for the second quarter and first half
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC Form 8-K with Exhibit 99.1 reporting Coca-Cola Consolidated’s second quarter and first half 2026 operating results.
Ticker impact
Coca-Cola Consolidated reported Q2 and first-half 2026 results, including net sales growth and margin pressure from higher aluminum costs and tariffs.
Near-term bias depends on whether investors focus more on volume/revenue strength or margin compression; expect choppy reaction until guidance or cost outlook is clarified.
The filing provides concrete quarter and half-year figures (net sales up, operating income flat, margins down) plus a specific cost driver ($45M additional aluminum input costs) and balance-sheet action (debt paydown).
Market effects
Highlights ongoing packaging input-cost pressure (aluminum) for beverage bottlers and the importance of pricing power versus commodity/tariff shocks.
No specific regional demand shock beyond holiday timing and portfolio performance.
Aluminum cost driver is linked to geopolitical conflicts and elevated tariffs, which can affect broader industrial input costs.
Counterpoint
The margin decline may be temporary if annual pricing actions catch up later in 2026, while volume momentum and market share gains could dominate the narrative.
Key entities
- companyCoca-Cola Consolidated, Inc.
Reported Q2 and first-half 2026 results, including net sales growth, margin compression from higher aluminum costs, and $275 million debt paydown.
