News Release Coca-Cola Consolidated Reports Second Quarter and First Half 2025 Results | | Second Quarter | | | First Half | | | | --- | --- | --- | --- | --- | --- | --- | | (in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | | (1) Volume | 90.7 | 91.5 | (0.8)% | 167.4 | 173.6 | (3.5)% | | Net sales | $1,855.5 | $1,795.9 | 3.3% | $3,435.5 | $3,387.6 | 1.4% | | Gross profit | $742.5 | $716.7 | 3.6% | $1,369.6 | $1,357.3 | 0.9% | | Gross margin | 40.0 % | 39.9 % | | 39.9 % | 40.1 % | | | Income fro ...

Core Insights - Coca-Cola Consolidated, Inc. reported solid second quarter results with a focus on top-line growth and margin management, leading to steady profit growth and substantial cash flow [2][3] - The company experienced a volume decline of 0.8% in Q2 2025 and 3.5% in the first half of 2025, attributed to two fewer selling days compared to the previous year [3][4] - Net sales increased by 3.3% to $1.9 billion in Q2 2025 and by 1.4% to $3.4 billion in the first half of 2025, driven by growth in both Sparkling and Still beverage categories [4][5] Financial Performance - Gross profit for Q2 2025 was $742.5 million, a 3.6% increase from Q2 2024, with a gross margin of 40.0% [4][6] - Income from operations in Q2 2025 rose to $272.1 million, a 5.0% increase year-over-year, while the operating margin improved to 14.7% [8][9] - Net income for Q2 2025 was $187.4 million, an increase of 8.4% compared to the same quarter in 2024 [9] Beverage Sales Breakdown - Sparkling beverage sales in Q2 2025 reached $1.08 billion, up 3.0% from Q2 2024, while Still beverage sales increased by 4.8% to $626.1 million [4][5] - The decline in volume was noted in Coca-Cola Original taste, while zero-sugar and flavored offerings saw solid growth [3][5] Cost Management - Selling, delivery, and administrative (SD&A) expenses increased by 2.8% in Q2 2025, primarily due to higher labor costs, but as a percentage of net sales, they decreased to 25.4% [7][8] - The company has made ongoing investments in supply chain capabilities to respond to changing consumer preferences for value [7] Cash Flow and Investments - Cash flows from operations for the first half of 2025 were $406.2 million, down from $437.1 million in the same period of 2024 [11] - The company invested approximately $157 million in capital expenditures in the first half of 2025, with expectations of around $300 million for the fiscal year [11]

Core Viewpoint - Coca-Cola Consolidated, Inc. will announce its operating results for the second quarter and the first half of fiscal 2025 on July 24, 2025, after market close [1] Company Overview - Coca-Cola Consolidated, Inc. is the largest Coca-Cola bottler in the United States, headquartered in Charlotte, N.C. [2] - The company distributes beverages from The Coca-Cola Company and other partners, offering over 300 brands and flavors across 14 states and the District of Columbia, serving approximately 60 million consumers [2] - The company has a commitment to consumers, customers, and communities, with a purpose centered on honoring God, serving others, pursuing excellence, and growing profitably [2]

Company Overview - Coca-Cola Consolidated is the largest Coca-Cola bottler in the United States, headquartered in Charlotte, N.C. [1] - The company produces, sells, and distributes beverages for The Coca-Cola Company and other partner companies, offering over 300 brands and flavors across 14 states [1] Analyst Background - The article mentions an equities analyst based in South Africa with ten years of experience at three prominent South African fund managers [1] - The analyst is a CFA Charterholder, indicating a professional level of expertise in investment analysis [1]

Group 1 - The article highlights a surprising double-digit return opportunity found in Coca-Cola, a well-established blue-chip company [1] - Triba Research aims to identify high-quality businesses with sustainable, long-term double-digit returns, focusing on companies with competitive advantages, low debt, and skilled management [2] - The firm operates with a concentrated portfolio strategy, selecting 10 to 15 carefully chosen securities to generate alpha [2]

Core Viewpoint - Coca-Cola Consolidated, Inc. has received stockholder approval for a 10-for-1 stock split, which is expected to enhance stock accessibility for a wider range of investors [1][2]. Group 1: Stock Split Details - The 10-for-1 stock split will result in stockholders receiving nine additional shares for each share of Common Stock or Class B Common Stock held, with trading on a split-adjusted basis expected to begin on or about May 27, 2025 [1]. - The stock split was contingent upon stockholder approval of an amendment to the Company's Restated Certificate of Incorporation, which was successfully approved at the Annual Meeting of Stockholders on May 13, 2025 [2]. Group 2: Company Overview - Coca-Cola Consolidated, Inc. is the largest Coca-Cola bottler in the United States, serving approximately 60 million consumers across 14 states and the District of Columbia with a portfolio of over 300 brands and flavors [5]. - The company has a long-standing commitment to its consumers, customers, and communities, emphasizing its purpose to honor God, serve others, pursue excellence, and grow profitably [5].

Core Insights - Coca-Cola Consolidated has announced a $90 million investment in a new 400,000-square-foot distribution and warehouse facility in Columbus, Ohio, which includes additional buildings for equipment repair and fleet maintenance [1][2] - The new facility is designed to enhance service capabilities for customers and the local community through innovative sustainability processes and technology [1][2] Investment and Economic Impact - The Columbus warehouse will manage over 16 million cases of products annually, averaging about 75,000 cases per day [2] - The investment has led to the creation of 35 new jobs, increasing total employment at the facility to 360 [3] Facility Features - The new campus includes a sales center, on-site wellness clinic, and an experiential learning center for employee training and skill development [4] - The facility incorporates advanced sustainability measures such as LED lighting, EV charging infrastructure, and recycling partnerships [5] Community Engagement - Coca-Cola Consolidated employs over 2,210 individuals across 15 facilities in Ohio, serving more than 21,000 businesses [6] - The company actively supports local non-profits, including Ronald McDonald House and Nationwide Children's Hospital [6] Company Overview - Coca-Cola Consolidated is the largest Coca-Cola bottler in the U.S., distributing over 300 brands and flavors across 14 states and the District of Columbia [7] - The company has a long-standing commitment to its consumers and communities, emphasizing excellence and profitable growth [8]

Core Viewpoint - Stock splits, while often receiving excessive attention from investors, do not fundamentally change a company's business performance. However, they can draw attention to stocks that may otherwise be overlooked, especially in uncertain market conditions [1][2]. Company Summaries Coca-Cola Consolidated - Coca-Cola Consolidated is the largest Coca-Cola bottler in the U.S., serving 14 states and the District of Columbia [3]. - The company announced a 10-for-1 stock split, pending shareholder approval on May 13, 2025, with trading on a split-adjusted basis expected to begin on May 27, 2025 [4]. - Following a 1% year-over-year decline in net sales and a 12% drop in operating income in Q1, the stock price fell, but this sell-off may present a buying opportunity amid market uncertainty [5][6]. - The decline in sales was attributed to two fewer selling days and the timing of the Easter holiday, with expectations that demand for its products will remain stable even in a struggling economy [7]. Fastenal - Fastenal is primarily known for distributing threaded fasteners but has diversified, with non-fastener products now accounting for nearly 70% of total sales [9]. - A two-for-one stock split was approved by the board, scheduled for May 21, 2025, for shares owned as of May 5, 2025 [9]. - Despite major market indexes being down year-to-date, Fastenal's share price has increased significantly, and management anticipates continued strong cash flow generation [10]. - Concerns exist regarding the stock's premium valuation, with a forward price-to-earnings ratio of 38, and indications that customers are becoming more cautious due to trade policy uncertainties [11]. O'Reilly Automotive - O'Reilly Automotive is a leading specialty retailer in the U.S. for automotive aftermarket parts, tools, and supplies [12]. - The company has seen its share price rise amid market volatility, although it trades at a high valuation of 32 times forward earnings [13]. - The anticipated 15-for-1 stock split on June 9, 2025, could attract new investors, pending shareholder approval on May 15, 2025 [14]. - Historical performance shows an average annual gain of 21% since the last stock split in 2005, suggesting potential for future growth despite economic challenges [15].

Core Viewpoint - Coca-Cola Consolidated's stock experienced a significant decline following disappointing Q1 earnings, with a 12% drop in share price despite a positive market backdrop [1][2]. Financial Performance - The company reported earnings per share of $11.87 on revenue of $1.58 billion for the quarter, with revenue down 0.7% year over year [3]. - The decline in revenue was attributed to two fewer sales days compared to the previous year, affecting overall sales performance [3]. - Gross profit margin decreased from 40.2% to 39.7%, and gross profit fell by 2% year over year [3]. - Operating income for the quarter was $190 million, reflecting a 12% year-over-year decline [3]. Volume and Pricing Dynamics - Unit volume fell by 6.6% year over year, necessitating pricing increases to maintain revenue levels [4]. - Adjusting for the two fewer sales days, the volume decline would have been 4.5% year over year [4]. - While pricing increases stabilized revenue, they were insufficient to prevent a decline in gross margin [5]. Future Outlook - Continued declines in unit volume could negatively impact future earnings, despite the potential for moderate pricing increases [5].

[Q1 2025 Performance Overview](index=1&type=section&id=Q1%202025%20Performance%20Overview) [Key Financial Highlights](index=1&type=section&id=Key%20Results) Coca-Cola Consolidated's Q1 2025 saw declines in net sales, gross profit, and operating income, largely due to fewer selling days Q1 2025 vs. Q1 2024 Key Results | (in millions) | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Volume | 76.7 | 82.1 | (6.6)% | | Net sales | $1,580.0 | $1,591.6 | (0.7)% | | Gross profit | $627.1 | $640.6 | (2.1)% | | Income from operations | $189.8 | $215.4 | (11.9)% | - The first quarter of 2025 had **two fewer selling days** compared to the first quarter of 2024, which negatively impacted results[4](index=4&type=chunk) Q1 2025 Beverage Sales Breakdown | (in millions) | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Sparkling bottle/can | $933.8 | $952.0 | (1.9)% | | Still bottle/can | $509.2 | $511.6 | (0.5)% | [Detailed Operational Review](index=2&type=section&id=First%20Quarter%202025%20Review) Q1 2025 performance was significantly affected by calendar effects and a Dasani distribution change, impacting volume and net sales - Volume declined **6.6%** in Q1 2025. **Two fewer selling days** accounted for **2.1%** of the decline, and a change in Dasani water distribution to a non-DSD method accounted for another **1.3%**[6](index=6&type=chunk) - Net sales were negatively impacted by approximately **$40 million** (**2.5%** of net sales change) due to **two fewer selling days**, which was partially offset by 2025 pricing actions[6](index=6&type=chunk) - Excluding Dasani, net sales in the Still category grew **1.8%**, driven by sports drinks, protein, and enhanced water products. The company also began distributing Topo Chico mineral water in the quarter[7](index=7&type=chunk)[9](index=9&type=chunk) - Selling, delivery and administrative (SD&A) expenses rose **2.9%**, primarily due to increased labor costs from annual wage adjustments and general inflation[9](index=9&type=chunk) - Net income was **$103.6 million** (GAAP) and **$136.3 million** (Adjusted). The GAAP figure was adversely impacted by a non-cash fair value adjustment to an acquisition-related contingent consideration liability[11](index=11&type=chunk) - Cash flow from operations was **$198.2 million**. The company invested **$98 million** in capital expenditures and expects total 2025 capex to be approximately **$300 million**[12](index=12&type=chunk) [Financial Statements](index=6&type=section&id=FINANCIAL%20STATEMENTS) [Condensed Consolidated Statements of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q1 2025, the company reported decreased net sales, gross profit, and income from operations, with a notable decline in net income and diluted earnings per share Q1 2025 Statement of Operations Summary (in thousands) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $1,579,977 | $1,591,626 | | Gross profit | $627,104 | $640,559 | | Income from operations | $189,820 | $215,406 | | Net income | $103,611 | $165,741 | | Diluted net income per share (Common) | $11.87 | $17.66 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 28, 2025, total assets slightly increased, cash and cash equivalents rose, total liabilities remained stable, and stockholders' equity grew from year-end 2024 Balance Sheet Summary (in thousands) | | March 28, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,151,805 | $1,135,824 | | Total current assets | $2,613,434 | $2,547,302 | | Total assets | $5,403,738 | $5,313,139 | | Total current liabilities | $1,290,191 | $1,313,169 | | Total liabilities | $3,904,324 | $3,895,528 | | Stockholders' equity | $1,499,414 | $1,417,611 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) In Q1 2025, the company generated strong net cash from operating activities, while utilizing cash for investing and financing activities, resulting in a net increase in cash for the period Q1 Cash Flow Summary (in thousands) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $198,171 | $194,273 | | Net cash used in investing activities | $(139,695) | $(263,262) | | Net cash used in financing activities | $(42,495) | $(165,020) | | Net increase (decrease) in cash | $15,981 | $(234,009) | | Cash at end of period | $1,151,805 | $401,260 | [Non-GAAP Financial Measures](index=9&type=section&id=COMPARABLE%20AND%20NON-GAAP%20FINANCIAL%20MEASURES) [Reconciliation of GAAP to Non-GAAP Results](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Results) The company provides adjusted non-GAAP results to offer a clearer view of ongoing performance by excluding fair value adjustments and other items - On a comparable basis, which adjusts for the **two fewer selling days** in Q1 2025, volume declined **4.5%** year-over-year[24](index=24&type=chunk) Q1 2025 GAAP to Non-GAAP Reconciliation (in thousands) | | Net income | Basic net income per share | | :--- | :--- | :--- | | **Reported results (GAAP)** | **$103,611** | **$11.88** | | Fair value adjustment of acquisition related contingent consideration | $32,174 | $3.69 | | Fair value adjustments for commodity derivative instruments | $477 | $0.05 | | **Adjusted results (non-GAAP)** | **$136,262** | **$15.62** | [Other Information](index=4&type=section&id=Other%20Information) [About Coca-Cola Consolidated, Inc.](index=4&type=section&id=About%20Coca-Cola%20Consolidated%2C%20Inc.) Coca-Cola Consolidated, Inc. is the largest Coca-Cola bottler in the United States, serving approximately 60 million consumers across 14 states and D.C. - Coca-Cola Consolidated is the **largest Coca-Cola bottler** in the United States[14](index=14&type=chunk) - The company serves approximately **60 million consumers** across **14 states** and the District of Columbia[14](index=14&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=5&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This news release contains forward-looking statements subject to risks and uncertainties, including inflation, supply chain issues, and changes in consumer preferences - The report contains forward-looking statements that are not guarantees of future performance and are subject to risks and uncertainties[16](index=16&type=chunk) - Identified risk factors include inflation, supply chain shortages, changes in consumer perception, government regulation, cybersecurity attacks, and economic downturns[16](index=16&type=chunk)