Coca-Cola Consolidated — Second Quarter and First Half 2026 Earnings Summary

Financial Performance

• Second quarter 2026 net sales reached $2,052.4 million, a 10.6% increase from $1,855.5 million in the second quarter of 2025; first half 2026 net sales were $3,899.1 million, up 13.5% from $3,435.5 million.
• Second quarter 2026 gross profit was $778.4 million (4.8% increase vs. $742.5 million in 2025); adjusted gross profit was $788.5 million (6.4% increase). First half 2026 gross profit was $1,505.5 million (9.9% increase).
• Gross margin decreased to 37.9% in the second quarter of 2026 from 40.0% in 2025; adjusted gross margin was 38.4% (down from 39.9%).
• Income from operations was $271.3 million in the second quarter of 2026, flat compared to $272.1 million in 2025; adjusted income from operations increased 6% to $284.9 million. First half 2026 income from operations was $508.9 million, a 10.2% increase from $461.9 million.
• Operating margin was 13.2% in the second quarter of 2026, down from 14.7% in 2025; adjusted operating margin was 13.9% (down from 14.6%).
• Net income was $158.8 million in the second quarter of 2026, a 15.2% decrease from $187.4 million in 2025; adjusted net income was $187.7 million, down 3.8% from $195.2 million. First half 2026 net income was $270.4 million, down 7.1% from $291.0 million.
• Selling, delivery and administrative (SD&A) expenses increased 7.8% to $507.1 million in the second quarter of 2026; as a percentage of net sales, SD&A decreased to 24.7% from 25.4%.
• Net interest expense increased significantly to $30.5 million in the second quarter of 2026 from $5.9 million in 2025; first half 2026 net interest expense was $62.5 million compared to $12.8 million.
• Cash flows from operations for the first half of 2026 were $420.6 million, up from $406.2 million in 2025.
• Capital expenditures were $147.4 million in the first half of 2026; full-year 2026 capital expenditure guidance is approximately $300 million.
• Total debt was reduced by $275 million in the first half of 2026, with $125 million in early repayments made during the second quarter.
• Basic net income per share was $2.39 in the second quarter of 2026, up from $2.15 in 2025; first half 2026 basic net income per share was $4.06, up from $3.34.

Guidance and Future Outlook

• Management expressed confidence in carrying momentum through the balance of 2026 to deliver a strong full-year 2026.
• The company expects to cycle out incremental investment in front-line teammates from the prior year, which is anticipated to moderate operating expense growth for the remainder of the year.
• The fourth quarter of 2026 will include six fewer days compared to the fourth quarter of 2025, while full fiscal years 2026 and 2025 have the same number of days.

Business Segments and Product Lines

• Total volume increased 7.6% in the second quarter of 2026 and 10.3% in the first half of 2026; adjusted volume for the first half was up 7.1%.
• Sparkling category volume increased 7.0% in the second quarter and 9.4% in the first half; adjusted first-half volume was up 6.2%. Growth was driven by zero-sugar and flavor offerings.
• Still category volume increased 9.4% in the second quarter and 12.9% in the first half; adjusted first-half volume was up 9.8%. Growth was driven by Core Power, Powerade, smartwater, and Monster, partially offset by Dasani casepack water.
• Sparkling net sales increased 9.7% in the second quarter and 12.9% in the first half; growth was driven by multi-pack, take-home aluminum can packages in large store, club, and value channels.
• Still net sales increased 11.5% in the second quarter and 14.8% in the first half; growth was strong in convenience and value store channels.
• The company reported its fifth consecutive quarter of market share growth, led by Sparkling (particularly zero-sugar and flavors) and Sports Drink categories.
• The timing of the Fourth of July holiday impacted total volume by approximately 1.0% in the second quarter of 2026.

Market and Competitive Landscape

• Enthusiasm around America250™ and the FIFA World Cup helped drive robust demand across the portfolio in the second quarter of 2026.
• The company remains focused on delivering affordability to consumers while driving strong marketplace execution.

Risks and Challenges

• Gross margin was pressured by elevated aluminum costs, driven by geopolitical conflicts, supply constraints, and elevated tariffs, resulting in approximately $45 million in additional input costs compared to the second quarter of 2025.
• Net income was adversely impacted by non-cash fair value adjustments to acquisition-related contingent consideration and commodity hedging instruments.
• SD&A expenses were driven by increased base wages for front-line teammates, annual wage adjustments, higher employee benefit costs, and elevated fuel costs.
• Forward-looking statements note risks including inflation, raw material shortages, changes in consumer preferences, regulatory changes, and potential decreases in marketing funding support from The Coca-Cola Company.

Management Commentary and Tone

• J. Frank Harrison, III, Chairman and CEO, described the second quarter as "very strong," citing volume and revenue growth driven by key events and enthusiasm for the portfolio. He highlighted pride in the team's focus on excellence and the improvement of the balance sheet through debt reduction.
• Dave Katz, President and COO, noted that "solid operational execution" drove results despite macroeconomic uncertainty and higher input costs. He expressed confidence in the team's ability to maintain momentum and deliver a strong 2026.

Other Key Points

• The company paid $33.3 million in cash dividends and $28.0 million on share repurchases during the first half of 2026.
• Payments on the term loan facility totaled $275 million in the first half of 2026.
• Payments related to acquisition-related contingent consideration were $37.1 million in the first half of 2026.
• The first half of 2026 included six additional selling days compared to the first half of 2025, which contributed approximately $30.0 million to income from operations and $22.6 million to net income.
• The effective income tax rate was approximately 26% for both the first half of 2026 and 2025.
• Coca-Cola Consolidated is the largest Coca-Cola bottler in the United States, operating in 14 states and the District of Columbia.