Coke Consolidated Posts Q1 Operating Loss, Volume And Sales Growth

Posted On: 5/15/2018

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CHARLOTTE, NC -- Coca-Cola Bottling Co. Consolidated had an operating loss of $19 million in the first quarter of fiscal 2018, compared to operating income of $15 million a year earlier. Sales grew to $1.07 billion from $865.7 million in the 2017 first quarter.

Volume increased 19.6% to 78 million physical cases, from 65.2 million in the 2017 first quarter.

Most of the growth was driven by acquisition (net of divestitures) results, as well as organic volume growth of 2.2%. In addition, the bottler said it achieved price and mix realization greater than volume growth, which drove net sales growth of 23.8% for its total business and 2.4% organic growth.

These results were driven by growth in both the sparkling and still beverage categories, with sparkling bottle/can sales growing 17.3% and still bottle/can sales growing 26.7%. Despite the strong volume and net sales results, Coke Consolidated said poor weather and product sourcing challenges put significant pressure on its first quarter results, compared with a year earlier.

While volume and top-line growth were strong, Coke Consolidated experienced gross margin declined to 34.0% in the first quarter of 2018 from 38.4% in 2017's comparable quarter. Coke Consolidated attributed the margin compression to recent commodity and transportation cost pressures, the acquisition of new territories that generally experience margins lower than the bottler's legacy territories, and the continued volume shift to lower-margin still products to meet changing consumer preferences.

"We expect these drivers to continue throughout 2018, and we are taking pricing actions in certain markets to help offset the cost pressures," Coke Consolidated said in its first-quarter financial report.
 
While it completed its acquisitions and divestitures as part of a system transformation in October 2017, the bottler said it continues integrating the acquired distribution territories, manufacturing facilities and related operations and investing resources to improve efficiencies, capabilities and market share.

Headquartered in Charlotte, NC, Coca-Cola Consolidated is the largest Coca-Cola bottler in the U.S.  It makes, sells and delivers Coca-Cola Co. and other partner companies' beverages in more than 300 brands and flavors to 65 million consumers in territories spanning 14 states and the District of Columbia.

Click here to see full report.