Coca-Cola Consolidated Reports Decline in Q1 Fiscal 2025 Financial Performance

Coca-Cola Consolidated, Inc. reported a decline in financial performance for the first quarter of fiscal 2025, with net sales decreasing by 0.7% to $1.58 billion compared to $1.59 billion in the same period last year. The decrease in revenue was attributed to two fewer selling days, which accounted for approximately $40 million of the decline. Additionally, the company experienced a 6.6% drop in sales volume, primarily in its Sparkling and Still beverage categories, influenced by the timing of the Easter holiday and a shift in distribution methods for certain products.

Gross profit for the quarter was $627.1 million, down from $640.6 million in the prior year, reflecting a gross margin decrease of 50 basis points to 39.7%. The decline in gross profit was partly due to a shift in product mix towards lower-margin Still beverages and the timing of annual price increases. Selling, delivery, and administrative (SD&A) expenses rose by 2.9% to $437.3 million, driven by increased labor costs and inflationary pressures, resulting in an operating income of $189.8 million, down from $215.4 million a year earlier.

Net income for the first quarter was $103.6 million, a significant decrease from $165.7 million in the previous year, largely due to a $42.7 million increase in the fair value of acquisition-related contingent consideration. This adjustment was influenced by a decrease in the discount rate used to calculate the liability. The company’s effective income tax rate remained stable at approximately 25.7%, with tax expenses decreasing in line with lower income before taxes.

Operationally, Coca-Cola Consolidated continues to focus on optimizing its supply chain and enhancing its distribution methods. The company has begun operations at a new automated distribution center in Columbus, Ohio, as part of its strategy to improve efficiency. The company also reported cash flows from operations of $198.2 million, slightly up from $194.3 million in the prior year, and plans to invest approximately $300 million in capital expenditures throughout 2025.

Looking ahead, Coca-Cola Consolidated anticipates continued challenges in the competitive nonalcoholic beverage market, particularly with volume sales. The company is focused on executing its commercial strategy, optimizing pricing, and enhancing customer service through digital platforms. The board has also approved a 10-for-1 forward stock split, subject to shareholder approval, which aims to increase liquidity and attract a broader investor base.