Coca-Cola Consolidated (NASDAQ: COKE) grows Q2 2026 sales as profit pressured
Coca-Cola Consolidated, Inc. reported higher sales but lower earnings for the second quarter of 2026. Beverage volume grew 7.6% in the quarter and 10.3% in the first half, led by both Sparkling and Still categories, while net sales increased 10.6% to $2.1 billion, helped by pricing and Fourth of July timing.
Gross profit rose, but gross margin compressed as elevated aluminum costs added about $45 million of input costs that outpaced pricing. SD&A expenses grew 7.8% but fell as a percentage of sales. Income from operations was roughly flat year over year, and reported net income declined to $158.8 million in Q2 and $270.4 million for the first half, pressured by higher interest expense from new term loans and non-cash fair value increases on acquisition-related contingent consideration and commodity hedges. Operating cash flow for the first half was strong at $420.6 million; the company invested about $147 million in capital expenditures, repaid $275 million of term debt, and ended the period with a significant debt load and a $760.4 million contingent consideration liability tied to long-term sub-bottling payments.
Positive
- None.
Negative
- None.
Key Figures
Net sales Q2 2026: 2,052,420 (in thousands)
Net income Q2 2026: $158.8 million
Operating cash flow H1 2026: $420.6 million
+5 more
8 metrics
Net sales Q2 2026
2,052,420 (in thousands)
Second quarter 2026 consolidated net sales
Net income Q2 2026
$158.8 million
Second quarter 2026 net income versus $187.4 million in 2025
Operating cash flow H1 2026
$420.6 million
Net cash provided by operating activities in first half 2026
Long-term debt
2,413,112 (in thousands)
Noncurrent debt outstanding as of July 3, 2026
Acquisition contingent consideration
760,396 (in thousands)
Fair value of acquisition related contingent consideration at July 3, 2026
Cash and cash equivalents
171,687 (in thousands)
Cash position at July 3, 2026
Volume growth Q2 2026
7.6%
Total beverage volume increase versus Q2 2025
Effective tax rate H1 2026
26.2%
Income tax rate for the first half of 2026
Key Terms
acquisition related contingent consideration, Long-Term Performance Equity Plan, supply chain finance program, Accumulated other comprehensive income (loss), +1 more
5 terms
acquisition related contingent consideration financial
"liability recorded to reflect the estimated fair value of contingent consideration"
Long-Term Performance Equity Plan financial
"The Long-Term Performance Equity Plan compensates J. Frank Harrison, III based on"
supply chain finance program financial
"facilitate a supply chain finance program (the “SCF program”), which allows qualifying"
Accumulated other comprehensive income (loss) financial
"Accumulated other comprehensive income (loss) (“AOCI(L)”) is composed of adjustments"
A balance-sheet line that tracks certain gains and losses that haven’t flowed through the company’s profit-and-loss statement, such as unrealized changes in the value of investments, foreign-currency adjustments, and some pension-related items. Think of it like a storage closet for value swings the company hasn’t ‘realized’ by selling or settling them yet; it changes shareholders’ equity and helps investors see hidden volatility or potential future impacts on book value.
cash flow hedging instruments financial
"These interest rate swaps are designated as cash flow hedging instruments and changes"
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FAQ
How did Coca-Cola Consolidated (COKE) perform financially in Q2 2026?
Coca-Cola Consolidated reported 10.6% net sales growth in Q2 2026 to about $2.1 billion, driven by higher volume and pricing. However, net income declined to $158.8 million, mainly due to higher interest expense and non-cash fair value adjustments on contingent consideration and hedging instruments.
What were Coca-Cola Consolidated (COKE) volume trends in Q2 and first half 2026?
Total beverage volume increased 7.6% in Q2 2026 and 10.3% in the first half, with Sparkling up 7.0% and Still up 9.4% in Q2. Growth was broad-based, including zero-sugar Sparkling products and Still brands such as Core Power, Powerade, smartwater and Monster.
How did margins at Coca-Cola Consolidated (COKE) change in Q2 2026?
Gross margin fell to 37.9% in Q2 2026, with adjusted gross margin at 38.4%, both down from 2025. The company cited approximately $45 million of additional aluminum costs, driven by geopolitical factors, supply constraints and tariffs, which outpaced annual pricing actions.
What was Coca-Cola Consolidated’s (COKE) cash flow and capital spending in the first half of 2026?
Operating cash flow was $420.6 million in the first half of 2026, modestly above 2025. The company invested about $147 million in capital expenditures and expects full-year 2026 capex of approximately $300 million, reflecting ongoing investments in production, logistics and equipment.
What is Coca-Cola Consolidated’s (COKE) debt position and recent repayments?
Total debt was about $2.55 billion in mid-2026, including term loans used to fund a prior $2.40 billion share repurchase from The Coca-Cola Company. During the first half of 2026, the company made early repayments of $275 million on its five-year term loan facility using cash on hand.
What are Coca-Cola Consolidated’s (COKE) expected sub-bottling payments to Coca-Cola Refreshments?
The company expects annual acquisition-related sub-bottling payments to CCR of about $70–$80 million in 2026. For the next five fiscal years beginning 2027, it anticipates paying approximately $50–$70 million per year, tied to distribution rights for certain territories.
What dividends did Coca-Cola Consolidated (COKE) pay in the first half of 2026?
For the first half of 2026, Coca-Cola Consolidated paid cash dividends of $0.50 per share on both its Common Stock and Class B Common Stock. These dividends totaled $28.3 million for Common Stock and $5.0 million for Class B Common Stock over the period.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________________________________
FORM 10-Q
______________________________________________________________________________________________
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended July 3, 2026
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ___________ to ___________
Commission File Number: 0-9286
______________________________________________________________________________________________
(Exact name of registrant as specified in its charter)
______________________________________________________________________________________________
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code: (980) 392-8298
______________________________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 24, 2026, there were 56,517,334 shares of the registrant’s Common Stock, par value $1.00 per share, and 10,046,960 shares of the registrant’s Class B Common Stock, par value $1.00 per share, outstanding.
COCA‑COLA CONSOLIDATED, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JULY 3, 2026
TABLE OF CONTENTS
| Page | ||||||||
PART I – FINANCIAL INFORMATION | ||||||||
Item 1. | Financial Statements (Unaudited) | |||||||
Condensed Consolidated Statements of Operations | 1 | |||||||
Condensed Consolidated Statements of Comprehensive Income | 2 | |||||||
Condensed Consolidated Balance Sheets | 3 | |||||||
Condensed Consolidated Statements of Cash Flows | 4 | |||||||
Condensed Consolidated Statements of Changes in Stockholders’ (Deficit) Equity | 5 | |||||||
Notes to Condensed Consolidated Financial Statements | 6 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 44 | ||||||
Item 4. | Controls and Procedures | 45 | ||||||
PART II – OTHER INFORMATION | ||||||||
Item 1. | Legal Proceedings | 46 | ||||||
Item 1A. | Risk Factors | 46 | ||||||
Item 5. | Other Information | 46 | ||||||
Item 6. | Exhibits | 47 | ||||||
Signature | 48 | |||||||
i
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
COCA‑COLA CONSOLIDATED, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Second Quarter | First Half | |||||||||||||||||||||||||
| (in thousands, except per share data) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Selling, delivery and administrative expenses | ||||||||||||||||||||||||||
| Income from operations | ||||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Mark-to-market on acquisition related contingent consideration | ||||||||||||||||||||||||||
| Other expense, net | ||||||||||||||||||||||||||
| Income before taxes | ||||||||||||||||||||||||||
| Income tax expense | ||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Basic net income per share: | ||||||||||||||||||||||||||
| Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted average number of Common Stock shares outstanding | ||||||||||||||||||||||||||
| Class B Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted average number of Class B Common Stock shares outstanding | ||||||||||||||||||||||||||
| Diluted net income per share: | ||||||||||||||||||||||||||
| Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted average number of Common Stock shares outstanding – assuming dilution | ||||||||||||||||||||||||||
| Class B Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted average number of Class B Common Stock shares outstanding – assuming dilution | ||||||||||||||||||||||||||
| Cash dividends per share: | ||||||||||||||||||||||||||
| Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Class B Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
1
COCA‑COLA CONSOLIDATED, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Second Quarter | First Half | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||
| Defined benefit plan reclassification including pension costs: | ||||||||||||||||||||||||||
| Actuarial loss | ( | ( | ||||||||||||||||||||||||
| Prior service credits | ||||||||||||||||||||||||||
| Postretirement benefits reclassification including benefit costs: | ||||||||||||||||||||||||||
| Actuarial gain | ||||||||||||||||||||||||||
| Interest rate swap | ||||||||||||||||||||||||||
| Net change in unrealized gain/loss on short-term investments | ( | ( | ||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | ( | ( | ||||||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | ||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
2
COCA‑COLA CONSOLIDATED, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (in thousands, except share data) | July 3, 2026 | December 31, 2025 | ||||||||||||
| ASSETS | ||||||||||||||
| Current Assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Accounts receivable, trade | ||||||||||||||
| Allowance for doubtful accounts | ( | ( | ||||||||||||
| Accounts receivable from The Coca‑Cola Company | ||||||||||||||
| Accounts receivable, other | ||||||||||||||
| Inventories | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Property, plant and equipment, net | ||||||||||||||
| Right-of-use assets - operating leases | ||||||||||||||
| Leased property under financing leases, net | ||||||||||||||
| Other assets | ||||||||||||||
| Goodwill | ||||||||||||||
| Distribution agreements, net | ||||||||||||||
| Customer lists, net | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES AND EQUITY (DEFICIT) | ||||||||||||||
| Current Liabilities: | ||||||||||||||
| Current portion of obligations under operating leases | $ | $ | ||||||||||||
| Current portion of obligations under financing leases | ||||||||||||||
| Accounts payable, trade | ||||||||||||||
| Accounts payable to The Coca‑Cola Company | ||||||||||||||
| Other accrued liabilities | ||||||||||||||
| Accrued compensation | ||||||||||||||
| Current portion of debt | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Deferred income taxes | ||||||||||||||
| Pension and postretirement benefit obligations | ||||||||||||||
| Other liabilities | ||||||||||||||
| Noncurrent portion of obligations under operating leases | ||||||||||||||
| Noncurrent portion of obligations under financing leases | ||||||||||||||
| Long-term debt | ||||||||||||||
| Total liabilities | ||||||||||||||
| Commitments and Contingencies | ||||||||||||||
| (Deficit)/Equity: | ||||||||||||||
Common Stock, $ | ||||||||||||||
Class B Common Stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Retained deficit | ( | ( | ||||||||||||
| Accumulated other comprehensive loss | ( | ( | ||||||||||||
| Total (deficit)/equity | ( | ( | ||||||||||||
| Total liabilities and (deficit)/equity | $ | $ | ||||||||||||
See accompanying notes to condensed consolidated financial statements.
3
COCA‑COLA CONSOLIDATED, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| First Half | |||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||
| Cash Flows from Operating Activities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization expense from property, plant and equipment and financing leases | |||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets and deferred proceeds, net | |||||||||||||||||||||||||||||||||||||||||||||||
| Fair value adjustment of acquisition related contingent consideration | |||||||||||||||||||||||||||||||||||||||||||||||
| Deferred income taxes | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Loss (gain) on sale of property, plant and equipment | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of debt costs | |||||||||||||||||||||||||||||||||||||||||||||||
| Change in current assets less current liabilities | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Change in other noncurrent assets | |||||||||||||||||||||||||||||||||||||||||||||||
| Change in other noncurrent liabilities | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Total adjustments | |||||||||||||||||||||||||||||||||||||||||||||||
| Net cash provided by operating activities | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Cash Flows from Investing Activities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Additions to property, plant and equipment | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||||||
| Investment in equity method investees | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from the sale of property, plant and equipment | |||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from the disposal of short-term investments | |||||||||||||||||||||||||||||||||||||||||||||||
| Purchases of short-term investments | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Net cash used in investing activities | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||||||
| Cash Flows from Financing Activities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Payments on term loan facility | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Payments of acquisition related contingent consideration | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends paid | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Payments related to share repurchases | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Debt issuance fees | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Payments on financing lease obligations | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Net cash used in financing activities | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||||||
| Net (decrease) increase in cash and cash equivalents during period | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents at beginning of period | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Significant non-cash investing and financing activities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Additions to property, plant and equipment accrued and recorded in accounts payable, trade | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Right-of-use assets obtained in exchange for operating lease obligations | |||||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
4
COCA‑COLA CONSOLIDATED, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY
(Unaudited)
| (in thousands, except per share data) | Common Stock | Class B Common Stock | Additional Paid-in Capital | Retained Deficit | Accumulated Other Comprehensive Loss | Treasury Stock - Common Stock | Treasury Stock - Class B Common Stock | Total Deficit | ||||||||||||||||||||||||||||||||||||||||||
| Balance on April 3, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock ($ | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Class B Common Stock ($ | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Balance on July 3, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||
| Balance on December 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock ($ | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Class B Common Stock ($ | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Balance on July 3, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||
| (in thousands, except per share data) | Common Stock | Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Treasury Stock - Common Stock | Treasury Stock - Class B Common Stock | Total Equity | ||||||||||||||||||||||||||||||||||||||||||
| Balance on March 28, 2025 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock ($ | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Class B Common Stock ($ | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Share repurchases | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Balance on June 27, 2025 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Balance on December 31, 2024 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock ($ | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Class B Common Stock ($ | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Share repurchases | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Balance on June 27, 2025 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
5
COCA‑COLA CONSOLIDATED, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Critical Accounting Policies
Each of the Company’s quarters, other than the fourth quarter, ends on the Friday closest to the last day of the corresponding quarterly calendar period. The Company’s fourth quarter and fiscal year end on December 31 regardless of the day of the week on which December 31 falls. The condensed consolidated financial statements presented are:
•The financial position as of July 3, 2026 and December 31, 2025.
•The results of operations, comprehensive income and changes in stockholders’ (deficit) equity for the three-month periods ended July 3, 2026 (the “second quarter” of fiscal 2026 (“2026”)) and June 27, 2025 (the “second quarter” of fiscal 2025 (“2025”)) and the six-month periods ended July 3, 2026 (the “first half” of 2026) and June 27, 2025 (the “first half” of 2025).
•The changes in cash flows for the first half of 2026 and the first half of 2025.
The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and the instructions to Form 10-Q and Article 10 of Regulation S-X. The accounting policies followed in the presentation of interim financial results are consistent with those followed on an annual basis. These policies are presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for 2025 filed with the United States Securities and Exchange Commission.
The preparation of condensed consolidated financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Critical Accounting Estimates
In the ordinary course of business, the Company has made a number of estimates and assumptions relating to the reporting of its results of operations and financial position in the preparation of its condensed consolidated financial statements in conformity with GAAP. Actual results could differ significantly from those estimates under different assumptions and conditions. The Company included in its Annual Report on Form 10-K for 2025 under the caption “Discussion of Critical Accounting Estimates” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” a discussion of the Company’s most critical accounting estimates, which are those the Company believes to be the most important to the portrayal of its financial condition and results of operations and that require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Any changes in critical accounting estimates are discussed with the Audit Committee of the Company’s Board of Directors during the quarter in which a change is contemplated and prior to making such change.
Recently Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disclosure of specific categories in the rate reconciliation, including additional information for reconciling items that meet a quantitative threshold, and specific disaggregation of income taxes paid and tax expense. The amendment is effective for fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-09 in the fourth quarter of 2025, noting no material impact on its consolidated financial statements. See Note 16 for disclosure related to the Company’s income tax reporting.
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Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires disclosure of disaggregated income expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization, among other things. The amendment also requires companies to provide a qualitative description of expense captions not separately disaggregated, as well as the total amount of selling expenses and, annually, the entity’s definition of selling expenses. The amendment is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company is in the process of evaluating the impact ASU 2024-03 will have on its consolidated financial statements.
2. Related Party Transactions
J. Frank Harrison, III
As of July 3, 2026, J. Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, controlled 10,043,940 shares of Class B Common Stock, which represented approximately 78 % of the total voting power of the outstanding Common Stock and Class B Common Stock on a consolidated basis.
The Coca‑Cola Company
The Company’s business consists primarily of the distribution, marketing and manufacture of nonalcoholic beverages of The Coca‑Cola Company, which is the sole owner of the formulas under which the primary components of the Company’s soft drink products, either concentrate or syrup, are manufactured.
On November 7, 2025, the Company entered into a purchase agreement (the “Repurchase Agreement”) with Carolina Coca-Cola Bottling Investments, Inc. (the “Seller”), an indirect wholly owned subsidiary of The Coca‑Cola Company, The Coca‑Cola Company and J. Frank Harrison, III, pursuant to which the Company agreed to purchase and the Seller agreed to sell all of the Seller’s shares of Common Stock for a cash payment in the aggregate amount of $2.40 billion (the “Repurchase”). The closing of the Repurchase also occurred on November 7, 2025. The Company funded the purchase price for the Repurchase with cash on hand and a term loan obtained under a certain bridge loan agreement (the “Bridge Facility”), as further discussed in Note 19.
As a result of the Repurchase, The Coca‑Cola Company does not own any shares of Common Stock or Class B Common Stock. The Coca‑Cola Company no longer has the right to have a designee proposed by the Company for nomination to the Company’s Board of Directors at each election of directors.
The following table summarizes the significant cash transactions between the Company and The Coca‑Cola Company:
| Second Quarter | First Half | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
Payments made by the Company to The Coca-Cola Company(1) | $ | $ | $ | $ | ||||||||||||||||||||||
| Payments made by The Coca-Cola Company to the Company | ||||||||||||||||||||||||||
(1)This excludes acquisition related sub-bottling payments made by the Company to CCR (as defined below), a wholly owned subsidiary of The Coca‑Cola Company.
More than 80 % of the payments made by the Company to The Coca‑Cola Company were for concentrate, syrup, sweetener and other finished goods products, which were recorded in cost of sales in the condensed consolidated statements of operations and represent the primary components of the soft drink products the Company manufactures and distributes. Payments made by the Company to The Coca‑Cola Company also included payments for marketing programs associated with large, national customers managed by The Coca‑Cola Company on behalf of the Company, which were recorded as a reduction to net sales in the condensed consolidated statements of operations. Other payments made by the Company to The Coca‑Cola Company related to cold drink equipment parts, fees associated with the rights to distribute certain brands and other customary items.
Payments made by The Coca‑Cola Company to the Company included annual funding in connection with the Company’s agreement to support certain business initiatives developed by The Coca‑Cola Company and funding associated with the delivery of post-mix products to various customers, both of which were recorded as a reduction to cost of sales in the condensed
7
consolidated statements of operations. Post-mix products are dispensed through equipment that mixes fountain syrups with carbonated or still water, enabling fountain retailers to sell finished products to consumers in cups or glasses. Payments made by The Coca‑Cola Company to the Company also included fountain product delivery and equipment repair services performed by the Company on The Coca‑Cola Company’s equipment, all of which were recorded in net sales in the condensed consolidated statements of operations.
Coca‑Cola Refreshments USA, LLC (“CCR”)
The Company, The Coca‑Cola Company and CCR entered into comprehensive beverage agreements (as amended, collectively, the “CBA”), related to a multi-year series of transactions, which were completed in October 2017, through which the Company acquired and exchanged distribution territories and manufacturing plants (the “System Transformation”). The CBA requires the Company to make quarterly acquisition related sub-bottling payments to CCR on a continuing basis in exchange for the grant of exclusive rights to distribute, promote, market and sell the authorized brands of The Coca‑Cola Company and related products in certain distribution territories the Company acquired from CCR. These acquisition related sub-bottling payments are based on gross profit derived from the Company’s sales of certain beverages and beverage products that are sold under the same trademarks that identify a covered beverage, a beverage product or certain cross-licensed brands applicable to the System Transformation.
Acquisition related sub-bottling payments to CCR were $37.1 million in the first half of 2026 and $35.2 million in the first half of 2025. The following table summarizes the liability recorded by the Company to reflect the estimated fair value of contingent consideration related to future expected acquisition related sub-bottling payments to CCR:
| (in thousands) | July 3, 2026 | December 31, 2025 | ||||||||||||
| Current portion of acquisition related contingent consideration | $ | $ | ||||||||||||
| Noncurrent portion of acquisition related contingent consideration | ||||||||||||||
| Total acquisition related contingent consideration | $ | $ | ||||||||||||
Southeastern Container (“Southeastern”)
The Company is a shareholder of Southeastern, a plastic bottle manufacturing cooperative. The Company accounts for Southeastern as an equity method investment. The Company’s investment in Southeastern, which was classified as other assets in the condensed consolidated balance sheets, was $21.5 million as of July 3, 2026 and $21.3 million as of December 31, 2025.
South Atlantic Canners, Inc. (“SAC”)
The Company is a shareholder of SAC, a manufacturing cooperative located in Bishopville, South Carolina. All of SAC’s shareholders are Coca‑Cola bottlers and each has equal voting rights. The Company accounts for SAC as an equity method investment. The Company’s investment in SAC, which was classified as other assets in the condensed consolidated balance sheets, was $39.9 million as of July 3, 2026 and $35.0 million as of December 31, 2025. The Company also guarantees a portion of SAC’s debt. As of both July 3, 2026 and December 31, 2025, the Company was not required to guarantee any of SAC’s debt. See Note 20 for additional information.
The Company receives a fee for managing the day-to-day operations of SAC pursuant to a management agreement. Proceeds from management fees received from SAC, which were recorded as a reduction to cost of sales in the condensed consolidated statements of operations, were $5.0 million in the first half of 2026 and $4.8 million in the first half of 2025.
Coca‑Cola Bottlers’ Sales & Services Company LLC (“CCBSS”)
Along with all other Coca‑Cola bottlers in the United States and Canada, the Company is a member of CCBSS, a company formed to provide certain procurement and other services with the intention of enhancing the efficiency and competitiveness of the Coca‑Cola bottling system. The Company accounts for CCBSS as an equity method investment and its investment in CCBSS is not material.
CCBSS negotiates the procurement for the majority of the Company’s raw materials, excluding concentrate, and the Company receives a rebate from CCBSS for the purchase of these raw materials. The Company had rebates due from CCBSS of $21.3 million on July 3, 2026 and $17.3 million on December 31, 2025, which were classified as accounts receivable, other in the condensed consolidated balance sheets. Changes in rebates receivable relate to volatility in raw material prices and the timing of cash receipts of rebates.
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CONA Services LLC (“CONA”)
Along with certain other Coca‑Cola bottlers, the Company is a member of CONA, an entity formed to provide business process and information technology services to its members. The Company accounts for CONA as an equity method investment. The Company’s investment in CONA, which was classified as other assets in the condensed consolidated balance sheets, was $30.1 million as of July 3, 2026 and $30.2 million as of December 31, 2025.
Pursuant to an amended and restated master services agreement with CONA, the Company is authorized to use the Coke One North America system (the “CONA System”), a uniform information technology system developed to promote operational efficiency and uniformity among North American Coca‑Cola bottlers. In exchange for the Company’s rights to use the CONA System and receive CONA-related services, it is charged service fees by CONA. The Company incurred service fees to CONA of $12.8 million in the first half of 2026 and $12.2 million in the first half of 2025.
Related Party Leases
The Company leases its headquarters office facility and an adjacent office facility in Charlotte, North Carolina from Beacon Investment Corporation, of which J. Frank Harrison, III is the majority stockholder and each of Morgan H. Everett, Vice Chair of the Company’s Board of Directors, and the spouse of Ellison C. Glenn, the Company’s Chief Sales and Service Officer, is a minority stockholder. The annual base rent the Company is obligated to pay under this lease is subject to an adjustment for an inflation factor and the lease expires on December 31, 2029. Rental payments for this lease were $1.0 2.1 million and $2.0 million in the first half of 2026 and the first half of 2025, respectively. The principal balance outstanding under this lease was $14.1 million on July 3, 2026 and $15.9 million on December 31, 2025.
Long-Term Performance Equity Plan
The Long-Term Performance Equity Plan compensates J. Frank Harrison, III based on the Company’s performance. Awards granted to Mr. Harrison under the Long-Term Performance Equity Plan are earned based on the Company’s attainment during a performance period of certain performance measures, each as specified by the Compensation Committee of the Company’s Board of Directors. These awards may be settled in cash and/or shares of Class B Common Stock, based on the average of the closing prices of shares of Common Stock during the last 20 trading days of the performance period. Compensation expense for the Long-Term Performance Equity Plan, which was included in selling, delivery and administrative (“SD&A”) expenses in the condensed consolidated statements of operations, was $4.0 million and $3.9 million in the second quarter of 2026 and the second quarter of 2025, respectively, and $6.2 million and $6.0 million in the first half of 2026 and the first half of 2025, respectively.
3. Revenue Recognition
The Company’s sales are divided into two main categories: (i) bottle/can sales and (ii) other sales. Bottle/can sales include products packaged primarily in plastic bottles and aluminum cans. Bottle/can net pricing is based on the invoice price charged to customers reduced by any promotional allowances. Bottle/can net pricing per unit is impacted by the price charged per package, the sales volume generated for each package and the channels in which those packages are sold. Other sales include sales to other Coca‑Cola bottlers, post-mix sales, transportation revenue and equipment maintenance revenue.
The Company’s contracts are derived from customer orders, including customer sales incentives, generated through an order processing and replenishment model. Generally, the Company’s service contracts and contracts related to the delivery of specifically identifiable products have a single performance obligation. Revenues do not include sales or other taxes collected from customers. The Company has defined its performance obligations for its contracts as either at a point in time or over time. Bottle/can sales, sales to other Coca‑Cola bottlers and post-mix sales are recognized when control transfers to a customer, which is generally upon delivery and is considered a single point in time (“point in time”). Point in time sales accounted for approximately 99
Other sales, which include revenue for service fees related to the repair of cold drink equipment and delivery fees for freight hauling and brokerage services, are recognized over time (“over time”). Revenues related to cold drink equipment repair are recognized as the respective services are completed using a cost-to-cost input method. Repair services are generally completed in less than one day but can extend up to one month . Revenues related to freight hauling and brokerage services are recognized as the delivery occurs using a miles driven output method. Generally, delivery occurs and freight charges are recognized in the same day. Over time sales orders open at the end of a financial period are not material to the condensed consolidated financial statements.
9
The following table represents a disaggregation of revenue from contracts with customers:
| Second Quarter | First Half | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Point in time net sales: | ||||||||||||||||||||||||||
| Nonalcoholic Beverages - point in time | $ | $ | $ | $ | ||||||||||||||||||||||
| Total point in time net sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Over time net sales: | ||||||||||||||||||||||||||
Nonalcoholic Beverages - over time(1) | $ | $ | $ | $ | ||||||||||||||||||||||
All Other - over time(1) | ||||||||||||||||||||||||||
| Total over time net sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Total net sales | $ | $ | $ | $ | ||||||||||||||||||||||
(1)Due to the dissolution of the Data Ventures, Inc. operating segment as of December 31, 2025 (as discussed in Note 4), these figures have been retroactively adjusted for all prior periods presented to reflect the dissolution of the Data Ventures, Inc. operating segment within the “All Other - over time” category and the merger of the Data Ventures, Inc. operating segment with the Nonalcoholic Beverages operating segment.
The Company’s allowance for doubtful accounts in the condensed consolidated balance sheets includes a reserve for customer returns and an allowance for credit losses. The Company experiences customer returns primarily as a result of damaged or out-of-date product. At any given time, the Company estimates less than 1 6.3 million as of July 3, 2026 and $6.0 million as of December 31, 2025.
The Company estimates an allowance for credit losses, based on historic days’ sales outstanding trends, aged customer balances, previously written-off balances and expected recoveries up to balances previously written off, in order to present the net amount expected to be collected. Accounts receivable balances are written off when determined uncollectible and are recognized as a reduction to the allowance for credit losses. Following is a summary of activity for the allowance for credit losses during the first half of 2026 and the first half of 2025:
| First Half | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Beginning balance - allowance for credit losses | $ | $ | ||||||||||||
| Additions charged to expenses and as a reduction to net sales | ||||||||||||||
| Deductions | ( | ( | ||||||||||||
| Ending balance - allowance for credit losses | $ | $ | ||||||||||||
4. Segments
The Company evaluates segment reporting in accordance with FASB Accounting Standards Codification Topic 280, Segment Reporting , each reporting period, including evaluating the reporting package reviewed by the Chief Operating Decision Maker (the “CODM”). The Company has concluded the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer, as a group, represent the CODM. Segment asset information is not provided to the CODM.
The Company has two operating segments, each identified by its unique products and services. Nonalcoholic Beverages represents the vast majority of the Company’s consolidated net sales and income from operations. The accounting policies of the Nonalcoholic Beverages operating segment are the same as those described in the summary of significant accounting policies presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for 2025. The additional operating segment, which includes the Red Classic subsidiaries, does not meet the quantitative threshold for separate reporting and, therefore, has been reported as “All Other.”
Previously, the Company had three operating segments, Nonalcoholic Beverages and two additional operating segments, which included Data Ventures, Inc. and the Red Classic subsidiaries. Since the two additional operating segments did not meet the quantitative thresholds for separate reporting, either individually or in the aggregate, they were combined into “All Other.” As of
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December 31, 2025, the Data Ventures, Inc. operating segment was liquidated, dissolved and merged into the Nonalcoholic Beverages operating segment. For reporting purposes, all prior periods presented have been retroactively adjusted to reflect the dissolution of the Data Ventures, Inc. operating segment within the All Other operating segment and the merger of the Data Ventures, Inc. operating segment with the Nonalcoholic Beverages operating segment.
The CODM uses net sales, gross profit and income from operations in the annual budgeting and forecasting process. Monthly, the CODM considers budget-to-actual variances and current year to prior year variances for these profit measures when making strategic business decisions and allocating resources to Company operations.
The Company’s segment results are as follows:
| Second Quarter 2026 | ||||||||||||||||||||||||||
| (in thousands) | Nonalcoholic Beverages | All Other | Eliminations(1) | Total | ||||||||||||||||||||||
| Net sales | $ | $ | $ | ( | $ | |||||||||||||||||||||
| Cost of goods sold | ( | |||||||||||||||||||||||||
| Gross profit | ( | |||||||||||||||||||||||||
| Selling, delivery and administrative expenses: | ||||||||||||||||||||||||||
Payroll costs(2) | $ | $ | $ | $ | ||||||||||||||||||||||
Fleet costs(3) | ||||||||||||||||||||||||||
Depreciation and amortization expense(4) | ||||||||||||||||||||||||||
All other segment items(5) | ( | |||||||||||||||||||||||||
| Total selling, delivery and administrative expenses | ( | |||||||||||||||||||||||||
| Income from operations | $ | $ | $ | $ | ||||||||||||||||||||||
Total depreciation and amortization expense(4) | $ | $ | $ | $ | ||||||||||||||||||||||
| Second Quarter 2025 | ||||||||||||||||||||||||||
| (in thousands) | Nonalcoholic Beverages | All Other | Eliminations(1) | Total | ||||||||||||||||||||||
| Net sales | $ | $ | $ | ( | $ | |||||||||||||||||||||
| Cost of goods sold | ( | |||||||||||||||||||||||||
| Gross profit | ( | |||||||||||||||||||||||||
| Selling, delivery and administrative expenses: | ||||||||||||||||||||||||||
Payroll costs(2) | $ | $ | $ | $ | ||||||||||||||||||||||
Fleet costs(3) | ||||||||||||||||||||||||||
Depreciation and amortization expense(4) | ||||||||||||||||||||||||||
All other segment items(5) | ( | |||||||||||||||||||||||||
| Total selling, delivery and administrative expenses | ( | |||||||||||||||||||||||||
| Income from operations | $ | $ | $ | $ | ||||||||||||||||||||||
Total depreciation and amortization expense(4) | $ | $ | $ | $ | ||||||||||||||||||||||
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| First Half 2026 | ||||||||||||||||||||||||||
| (in thousands) | Nonalcoholic Beverages | All Other | Eliminations(1) | Total | ||||||||||||||||||||||
| Net sales | $ | $ | $ | ( | $ | |||||||||||||||||||||
| Cost of goods sold | ( | |||||||||||||||||||||||||
| Gross profit | ( | |||||||||||||||||||||||||
| Selling, delivery and administrative expenses: | ||||||||||||||||||||||||||
Payroll costs(2) | $ | $ | $ | $ | ||||||||||||||||||||||
Fleet costs(3) | ||||||||||||||||||||||||||
Depreciation and amortization expense(4) | ||||||||||||||||||||||||||
All other segment items(5) | ( | |||||||||||||||||||||||||
| Total selling, delivery and administrative expenses | ( | |||||||||||||||||||||||||
| Income from operations | $ | $ | $ | $ | ||||||||||||||||||||||
Total depreciation and amortization expense(4) | $ | $ | $ | $ | ||||||||||||||||||||||
| First Half 2025 | ||||||||||||||||||||||||||
| (in thousands) | Nonalcoholic Beverages | All Other | Eliminations(1) | Total | ||||||||||||||||||||||
| Net sales | $ | $ | $ | ( | $ | |||||||||||||||||||||
| Cost of goods sold | ( | |||||||||||||||||||||||||
| Gross profit | ( | |||||||||||||||||||||||||
| Selling, delivery and administrative expenses: | ||||||||||||||||||||||||||
Payroll costs(2) | $ | $ | $ | $ | ||||||||||||||||||||||
Fleet costs(3) | ||||||||||||||||||||||||||
Depreciation and amortization expense(4) | ||||||||||||||||||||||||||
All other segment items(5) | ( | |||||||||||||||||||||||||
| Total selling, delivery and administrative expenses | ( | |||||||||||||||||||||||||
| Income from operations | $ | $ | $ | $ | ||||||||||||||||||||||
Total depreciation and amortization expense(4) | $ | $ | $ | $ | ||||||||||||||||||||||
(1)The entire net sales elimination represents net sales from the All Other operating segment to the Nonalcoholic Beverages operating segment. The entire cost of goods sold and SD&A eliminations represent costs incurred by the All Other operating segment in the generation of net sales to the Nonalcoholic Beverages operating segment.
(2)Payroll costs includes compensation, incentive plans, defined contribution plans, healthcare benefits and tax-advantaged spending accounts.
(3)Fleet costs includes fleet repairs, maintenance and fuel and oil costs.
(4)Total depreciation and amortization expense is included within both cost of goods sold and SD&A expenses. For segment reporting, the difference between total depreciation and amortization expense and the portion within SD&A expenses is the amount within cost of goods sold.
(5)All other segment items includes information technology costs, stewardship, insurance and other costs incurred in the selling and delivery of the Company’s products.
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5. Net Income Per Share
The following table sets forth the computation of basic net income per share and diluted net income per share under the two-class method:
| Second Quarter | First Half | |||||||||||||||||||||||||
| (in thousands, except per share data) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Numerator for basic and diluted net income per Common Stock and Class B Common Stock share: | ||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Less dividends: | ||||||||||||||||||||||||||
| Common Stock | ||||||||||||||||||||||||||
| Class B Common Stock | ||||||||||||||||||||||||||
| Total undistributed earnings | $ | $ | $ | $ | ||||||||||||||||||||||
| Common Stock undistributed earnings – basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Class B Common Stock undistributed earnings – basic | ||||||||||||||||||||||||||
| Total undistributed earnings – basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Common Stock undistributed earnings – diluted | $ | $ | $ | $ | ||||||||||||||||||||||
| Class B Common Stock undistributed earnings – diluted | ||||||||||||||||||||||||||
| Total undistributed earnings – diluted | $ | $ | $ | $ | ||||||||||||||||||||||
| Numerator for basic net income per Common Stock share: | ||||||||||||||||||||||||||
| Dividends on Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Common Stock undistributed earnings – basic | ||||||||||||||||||||||||||
| Numerator for basic net income per Common Stock share | $ | $ | $ | $ | ||||||||||||||||||||||
| Numerator for basic net income per Class B Common Stock share: | ||||||||||||||||||||||||||
| Dividends on Class B Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Class B Common Stock undistributed earnings – basic | ||||||||||||||||||||||||||
| Numerator for basic net income per Class B Common Stock share | $ | $ | $ | $ | ||||||||||||||||||||||
| Numerator for diluted net income per Common Stock share: | ||||||||||||||||||||||||||
| Dividends on Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Dividends on Class B Common Stock assumed converted to Common Stock | ||||||||||||||||||||||||||
| Common Stock undistributed earnings – diluted | ||||||||||||||||||||||||||
| Numerator for diluted net income per Common Stock share | $ | $ | $ | $ | ||||||||||||||||||||||
| Numerator for diluted net income per Class B Common Stock share: | ||||||||||||||||||||||||||
| Dividends on Class B Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Class B Common Stock undistributed earnings – diluted | ||||||||||||||||||||||||||
| Numerator for diluted net income per Class B Common Stock share | $ | $ | $ | $ | ||||||||||||||||||||||
| Denominator for basic net income per Common Stock and Class B Common Stock share: | ||||||||||||||||||||||||||
| Common Stock weighted average shares outstanding – basic | ||||||||||||||||||||||||||
| Class B Common Stock weighted average shares outstanding – basic | ||||||||||||||||||||||||||
| Denominator for diluted net income per Common Stock and Class B Common Stock share: | ||||||||||||||||||||||||||
| Common Stock weighted average shares outstanding – diluted (assumes conversion of Class B Common Stock to Common Stock) | ||||||||||||||||||||||||||
| Class B Common Stock weighted average shares outstanding – diluted | ||||||||||||||||||||||||||
13
| Second Quarter | First Half | |||||||||||||||||||||||||
| (in thousands, except per share data) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Basic net income per share: | ||||||||||||||||||||||||||
| Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Class B Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted net income per share: | ||||||||||||||||||||||||||
| Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Class B Common Stock | $ | $ | $ | $ | ||||||||||||||||||||||
NOTES TO TABLE
(1)For purposes of the diluted net income per share computation for Common Stock, all shares of Class B Common Stock are assumed to be converted; therefore, 100
(2)For purposes of the diluted net income per share computation for Class B Common Stock, weighted average shares of Class B Common Stock are assumed to be outstanding for the entire period and not converted.
(3)For periods presented during which the Company has net income, the denominator for diluted net income per share for Common Stock and Class B Common Stock includes the dilutive effect of unvested performance shares relative to the Long-Term Performance Equity Plan. For periods presented during which the Company has net loss, the unvested performance shares granted pursuant to the Long-Term Performance Equity Plan are excluded from the computation of diluted net loss per share, as the effect would have been anti-dilutive. See Note 2 for additional information on the Long-Term Performance Equity Plan.
(4)The Long-Term Performance Equity Plan awards may be settled in cash and/or shares of Class B Common Stock. Once an election has been made to settle an award in cash, the dilutive effect of unvested performance shares relative to such award is prospectively removed from the denominator in the computation of diluted net income per share.
(5)The Company did no
(6)On November 7, 2025, the Company entered into the Repurchase Agreement with the Seller, The Coca-Cola Company and J. Frank Harrison, III, pursuant to which the Company agreed to purchase and the Seller agreed to sell all 18,835,460 of the Seller’s shares of Common Stock.
(7)On March 4, 2025, the Company announced that its Board of Directors had approved the Stock Split of Common Stock and Class B Common Stock. The Stock Split was effected through the Amendment. The Amendment also effected a proportionate increase in the number of authorized shares of Common Stock and Class B Common Stock. The Amendment obtained stockholder approval at the Company’s 2025 Annual Meeting of Stockholders, which took place on May 13, 2025. Each stockholder of record as of the close of business on May 16, 2025 received nine additional shares for each share of Common Stock or Class B Common Stock held as of such date reflected in the stockholder’s account on May 23, 2025. Trading began on a split-adjusted basis on May 27, 2025.
(8)On August 20, 2024, the Company announced that its Board of Directors had approved a share repurchase program (the “Share Repurchase Program”) under which the Company was initially authorized to repurchase up to $1.00 billion of Common Stock. On November 7, 2025, the Company’s Board of Directors reduced the total authorization under the Share Repurchase Program from $1.00 billion to $400.0 million. The share repurchase authorization is discretionary and has no expiration date. There were no shares of Common Stock repurchased under the Share Repurchase Program during the first half of 2026. As of July 3, 2026, the total remaining authorization under the Share Repurchase Program was $136.3 million.
6. Inventories
Inventories consisted of the following:
| (in thousands) | July 3, 2026 | December 31, 2025 | ||||||||||||
| Finished products | $ | $ | ||||||||||||
| Manufacturing materials | ||||||||||||||
| Plastic shells, plastic pallets and other inventories | ||||||||||||||
| Total inventories | $ | $ | ||||||||||||
14
7. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
| (in thousands) | July 3, 2026 | December 31, 2025 | ||||||||||||
| Repair parts | $ | $ | ||||||||||||
| Prepaid software | ||||||||||||||
| Commodity hedges at fair market value | ||||||||||||||
| Prepaid marketing | ||||||||||||||
| Prepaid taxes | ||||||||||||||
| Other prepaid expenses and other current assets | ||||||||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||||||||
8. Property, Plant and Equipment, Net
The principal categories and estimated useful lives of property, plant and equipment, net were as follows:
| (in thousands) | July 3, 2026 | December 31, 2025 | Estimated Useful Lives | |||||||||||||||||
| Land | $ | $ | ||||||||||||||||||
| Buildings | ||||||||||||||||||||
| Machinery and equipment | ||||||||||||||||||||
| Transportation equipment | ||||||||||||||||||||
| Furniture and fixtures | ||||||||||||||||||||
| Cold drink dispensing equipment | ||||||||||||||||||||
| Leasehold and land improvements | ||||||||||||||||||||
| Software for internal use | ||||||||||||||||||||
| Construction in progress | ||||||||||||||||||||
| Total property, plant and equipment, at cost | ||||||||||||||||||||
| Less: Accumulated depreciation and amortization | ||||||||||||||||||||
| Total property, plant and equipment, net | $ | $ | ||||||||||||||||||
9. Leases
Following is a summary of the weighted average remaining lease term and the weighted average discount rate for the Company’s leases:
| July 3, 2026 | December 31, 2025 | |||||||||||||
| Weighted average remaining lease term: | ||||||||||||||
| Operating leases | ||||||||||||||
| Financing leases | ||||||||||||||
| Weighted average discount rate: | ||||||||||||||
| Operating leases | % | % | ||||||||||||
| Financing leases | % | % | ||||||||||||
Following is a summary of the Company’s leases within the condensed consolidated statements of operations:
| Second Quarter | First Half | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Operating lease costs | $ | $ | $ | $ | ||||||||||||||||||||||
| Short-term and variable leases | ||||||||||||||||||||||||||
| Depreciation expense from financing leases | ||||||||||||||||||||||||||
| Interest expense on financing lease obligations | ||||||||||||||||||||||||||
| Total lease cost | $ | $ | $ | $ | ||||||||||||||||||||||
15
The future minimum lease payments related to the Company’s leases include renewal options the Company has determined to be reasonably certain and exclude payments to landlords for real estate taxes and common area maintenance. Following is a summary of future minimum lease payments for all noncancelable operating leases and financing leases as of July 3, 2026:
| (in thousands) | Operating Leases | Financing Leases | ||||||||||||
| Remainder of 2026 | $ | $ | ||||||||||||
| 2027 | ||||||||||||||
| 2028 | ||||||||||||||
| 2029 | ||||||||||||||
| 2030 | ||||||||||||||
| Thereafter | ||||||||||||||
| Total minimum lease payments including interest | $ | $ | ||||||||||||
| Less: Amounts representing interest | ||||||||||||||
| Present value of minimum lease principal payments | ||||||||||||||
| Less: Current portion of lease liabilities | ||||||||||||||
| Noncurrent portion of lease liabilities | $ | $ | ||||||||||||
Following is a summary of future minimum lease payments for all noncancelable operating leases and financing leases as of December 31, 2025:
| (in thousands) | Operating Leases | Financing Leases | ||||||||||||
| 2026 | $ | $ | ||||||||||||
| 2027 | ||||||||||||||
| 2028 | ||||||||||||||
| 2029 | ||||||||||||||
| 2030 | ||||||||||||||
| Thereafter | ||||||||||||||
| Total minimum lease payments including interest | $ | $ | ||||||||||||
| Less: Amounts representing interest | ||||||||||||||
| Present value of minimum lease principal payments | ||||||||||||||
| Less: Current portion of lease liabilities | ||||||||||||||
| Noncurrent portion of lease liabilities | $ | $ | ||||||||||||
Following is a summary of the Company’s leases within the condensed consolidated statements of cash flows:
| First Half | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Cash flows from operating activities impact: | ||||||||||||||
| Operating leases | $ | $ | ||||||||||||
| Interest payments on financing lease obligations | ||||||||||||||
| Total cash flows from operating activities impact | $ | $ | ||||||||||||
| Cash flows from financing activities impact: | ||||||||||||||
| Principal payments on financing lease obligations | $ | $ | ||||||||||||
| Total cash flows from financing activities impact | $ | $ | ||||||||||||
10. Distribution Agreements, Net
Distribution agreements, net, which are amortized on a straight-line basis and have estimated useful lives of 20 to 40 years, consisted of the following:
| (in thousands) | July 3, 2026 | December 31, 2025 | ||||||||||||
| Distribution agreements at cost | $ | $ | ||||||||||||
| Less: Accumulated amortization | ||||||||||||||
| Distribution agreements, net | $ | $ | ||||||||||||
16
11. Customer Lists, Net
Customer lists, net, which are amortized on a straight-line basis and have estimated useful lives of five to 12 years, consisted of the following:
| (in thousands) | July 3, 2026 | December 31, 2025 | ||||||||||||
| Customer lists at cost | $ | $ | ||||||||||||
| Less: Accumulated amortization | ||||||||||||||
| Customer lists, net | $ | $ | ||||||||||||
12. Supply Chain Finance Program
The Company has an agreement with a third-party financial institution to facilitate a supply chain finance program (the “SCF program”), which allows qualifying suppliers to sell their receivables from the Company to the financial institution. The participating suppliers negotiate their outstanding receivable arrangements and associated fees directly with the financial institution, and the Company is not party to those agreements. Once a qualifying supplier elects to participate in the SCF program and reaches an agreement with the financial institution, the supplier elects which individual Company invoices it sells to the financial institution. A supplier participating in the SCF program may sell its invoices to the financial institution for payment in full by the financial institution to the supplier by the original maturity date of the invoice, or discounted payment at an earlier date as agreed upon with the supplier. The Company’s current payment terms with most of its suppliers are 90 days. The Company’s obligations to its suppliers, including amounts due and scheduled payment terms, are not impacted by a supplier’s participation in the SCF program.
13. Other Accrued Liabilities
Other accrued liabilities consisted of the following:
| (in thousands) | July 3, 2026 | December 31, 2025 | ||||||||||||
| Accrued insurance costs | $ | $ | ||||||||||||
| Current portion of acquisition related contingent consideration | ||||||||||||||
| Accrued marketing costs | ||||||||||||||
| Employee and retiree benefit plan accruals | ||||||||||||||
| Accrued interest payable | ||||||||||||||
| Accrued taxes (other than income taxes) | ||||||||||||||
| Accrued excise taxes related to share repurchases | ||||||||||||||
| All other accrued expenses | ||||||||||||||
| Total other accrued liabilities | $ | $ | ||||||||||||
14. Commodity Derivative Instruments
The Company is subject to the risk of increased costs arising from adverse changes in certain commodity prices. In the normal course of business, the Company manages this risk, where practicable, through a variety of strategies, including the use of commodity derivative instruments. The Company does not use commodity derivative instruments for trading or speculative purposes. These commodity derivative instruments are not designated as hedging instruments under GAAP and are used as “economic hedges” to manage certain commodity price risk. The Company uses several different financial institutions for commodity derivative instruments to minimize the concentration of credit risk. While the Company would be exposed to credit loss in the event of nonperformance by these counterparties, the Company does not anticipate nonperformance by these counterparties.
Commodity derivative instruments held by the Company are marked to market on a quarterly basis and are recognized in earnings consistent with the expense classification of the underlying hedged item. The Company generally pays a fee for these commodity derivative instruments, which is amortized over the corresponding period of each commodity derivative instrument. Settlements
17
of commodity derivative instruments are included in cash flows from operating activities in the condensed consolidated statements of cash flows. The following table summarizes pre-tax changes in the fair values of the Company’s commodity derivative instruments and the classification of such changes in the condensed consolidated statements of operations:
| Second Quarter | First Half | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Cost of sales | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
| Selling, delivery and administrative expenses | ( | |||||||||||||||||||||||||
| Total (loss) gain | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
All commodity derivative instruments are recorded at fair value as either assets or liabilities in the condensed consolidated balance sheets. The Company has master agreements with the counterparties to its commodity derivative instruments that provide for net settlement of derivative transactions. Accordingly, the net amounts of derivative assets are recognized in either prepaid expenses and other current assets or other assets in the condensed consolidated balance sheets and the net amounts of derivative liabilities are recognized in either other accrued liabilities or other liabilities in the condensed consolidated balance sheets. The following table summarizes the fair values of the Company’s commodity derivative instruments and the classification of such instruments in the condensed consolidated balance sheets:
| (in thousands) | July 3, 2026 | December 31, 2025 | ||||||||||||
| Assets: | ||||||||||||||
| Prepaid expenses and other current assets | $ | $ | ||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||
| Other accrued liabilities | $ | $ | ||||||||||||
| Other liabilities | ||||||||||||||
| Total liabilities | $ | $ | ||||||||||||
The following table summarizes the Company’s gross commodity derivative instrument assets and gross commodity derivative instrument liabilities in the condensed consolidated balance sheets:
| (in thousands) | July 3, 2026 | December 31, 2025 | ||||||||||||
| Gross commodity derivative instrument assets | $ | $ | ||||||||||||
| Gross commodity derivative instrument liabilities | ||||||||||||||
The following table summarizes the Company’s outstanding commodity derivative instruments:
| (in thousands) | July 3, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||
| Aluminum | Fuel | Aluminum | Fuel | |||||||||||||||||||||||||||||||||||
| Net notional amount of outstanding commodity derivative instruments | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Hedged via call and swap instruments | t | gal | t | gal | ||||||||||||||||||||||||||||||||||
| Hedged via put instruments | t | gal | t | gal | ||||||||||||||||||||||||||||||||||
| Latest maturity date of outstanding commodity derivative instruments | December 2028 | December 2027 | December 2026 | December 2026 | ||||||||||||||||||||||||||||||||||
15. Fair Values of Financial Instruments
GAAP requires assets and liabilities carried at fair value to be classified and disclosed in one of the following categories:
•Level 1: Quoted market prices in active markets for identical assets or liabilities.
•Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
•Level 3: Unobservable inputs that are not corroborated by market data.
18
The below methods and assumptions were used by the Company in estimating the fair values of its financial instruments. There were no transfers of assets or liabilities between levels in any period presented.
| Financial Instrument | Fair Value Level | Methods and Assumptions | ||||||||||||
| Deferred compensation plan assets and liabilities | Level 1 | The fair value of the Company’s nonqualified deferred compensation plan for certain executives and other highly compensated employees is based on the fair values of associated assets and liabilities, which are held in mutual funds and are based on the quoted market prices of the securities held within the mutual funds. | ||||||||||||
| Commodity derivative instruments | Level 2 | The fair values of the Company’s commodity derivative instruments are based on current settlement values at each balance sheet date, which represent the estimated amounts the Company would have received or paid upon termination of those instruments. The Company’s credit risk related to the commodity derivative instruments is managed by requiring high standards for its counterparties and periodic settlements. The Company considers nonperformance risk in determining the fair values of commodity derivative instruments. | ||||||||||||
| Interest rate swaps | Level 2 | The fair values of the Company’s interest rate swaps are determined using standard calculations and valuation models. The significant inputs used in these standard calculations/valuation models are readily available in public markets or can be derived from observable market transactions and, therefore, have been classified as Level 2. Inputs used in these standard calculations/valuation models for derivative instruments include swap rates, interest rates and discount rates. The discount rates are based on the historical U.S. deposit rates, U.S. Treasury rates and/or U.S. swap rates. The Company’s credit risk related to the interest rate swaps is managed by requiring high standards for its counterparties and periodic settlements. | ||||||||||||
| Debt | Level 2 | The carrying amounts of the Company’s variable rate debt approximate the fair values due to variable interest rates with short reset periods. The fair values of the Company’s fixed rate debt are based on estimated current market prices. | ||||||||||||
| Acquisition related contingent consideration | Level 3 | The fair value of the Company’s acquisition related contingent consideration is based on internal forecasts and the weighted average cost of capital (“WACC”) derived from market data. | ||||||||||||
The following tables summarize the carrying amounts and the fair values by level of the Company’s deferred compensation plan assets and liabilities, commodity derivative instruments, interest rate swaps, debt and acquisition related contingent consideration:
| July 3, 2026 | ||||||||||||||||||||||||||||||||
| (in thousands) | Carrying Amount | Total Fair Value | Fair Value Level 1 | Fair Value Level 2 | Fair Value Level 3 | |||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
| Deferred compensation plan assets | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Commodity derivative instruments | ||||||||||||||||||||||||||||||||
| Interest rate swaps | ||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Deferred compensation plan liabilities | ||||||||||||||||||||||||||||||||
| Commodity derivative instruments | ||||||||||||||||||||||||||||||||
| Debt | ||||||||||||||||||||||||||||||||
| Acquisition related contingent consideration | ||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| (in thousands) | Carrying Amount | Total Fair Value | Fair Value Level 1 | Fair Value Level 2 | Fair Value Level 3 | |||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
| Deferred compensation plan assets | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Commodity derivative instruments | ||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Deferred compensation plan liabilities | ||||||||||||||||||||||||||||||||
| Commodity derivative instruments | ||||||||||||||||||||||||||||||||
| Debt | ||||||||||||||||||||||||||||||||
| Acquisition related contingent consideration | ||||||||||||||||||||||||||||||||
19
The acquisition related contingent consideration was valued using a probability weighted discounted cash flow model based on internal forecasts and the WACC derived from market data, which are considered Level 3 inputs. Each reporting period, the Company adjusts its acquisition related contingent consideration liability related to the distribution territories subject to acquisition related sub-bottling payments to fair value by discounting future expected acquisition related sub-bottling payments required under the CBA using the Company’s estimated WACC.
The future expected acquisition related sub-bottling payments extend through the life of the related distribution assets acquired in each distribution territory, which is generally 40 years. As a result, the fair value of the acquisition related contingent consideration liability is impacted by the Company’s WACC, management’s estimate of the acquisition related sub-bottling payments that will be made in the future under the CBA, and current acquisition related sub-bottling payments (all Level 3 inputs). Changes in any of these Level 3 inputs, particularly the underlying risk-free interest rate used to estimate the Company’s WACC, could result in material changes to the fair value of the acquisition related contingent consideration liability and could materially impact the amount of non-cash expense (or income) recorded each reporting period.
The acquisition related contingent consideration liability is the Company’s only Level 3 asset or liability. A summary of the Level 3 activity is as follows:
| Second Quarter | First Half | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Beginning balance - Level 3 liability | $ | $ | $ | $ | ||||||||||||||||||||||
| Payments of acquisition related contingent consideration | ( | ( | ( | ( | ||||||||||||||||||||||
| Reclassification to current payables | ( | |||||||||||||||||||||||||
| Increase in fair value | ||||||||||||||||||||||||||
| Ending balance - Level 3 liability | $ | $ | $ | $ | ||||||||||||||||||||||
As of July 3, 2026 and June 27, 2025, a WACC of 8.2 % and 8.9 %, respectively, was utilized in the valuation of the Company’s acquisition related contingent consideration liability. The increase in the fair value of the acquisition related contingent consideration liability during the first half of 2026 was driven by higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments and a decrease in the WACC used to calculate the fair value of the liability from 8.5 % as of December 31, 2025. This fair value adjustment was recorded in mark-to-market on acquisition related contingent consideration in the condensed consolidated statement of operations for the first half of 2026.
For 2026, the Company estimates the annual sub-bottling payments will be in the range of approximately $70 million to $80 million. For the next five future years (beginning with fiscal year 2027), the Company anticipates that the amount it could pay annually will be in the range of approximately $50 million to $70 million.
16. Income Taxes
The Company’s effective income tax rate was 26.2 % for the first half of 2026 and 25.9 % for the first half of 2025. The Company’s income tax expense was $96.0 million for the first half of 2026 and $101.5 million for the first half of 2025. The decrease in income tax expense was primarily attributable to lower income before taxes during the first half of 2026 compared to the first half of 2025.
The Company had uncertain tax positions, including accrued interest, of $0.6 0.5
Prior tax years beginning in year 2022 remain open to examination by the Internal Revenue Service, and various tax years beginning in year 2002 remain open to examination by certain state tax jurisdictions due to loss carryforwards.
17. Pension and Postretirement Benefit Obligations
Pension Plan
The Company sponsors a pension plan (the “Bargaining Plan”) for certain employees under collective bargaining agreements. Benefits under the Bargaining Plan are determined in accordance with negotiated formulas for the respective participants.
20
The components of net periodic pension cost were as follows:
| Second Quarter | First Half | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Service cost | $ | $ | $ | $ | ||||||||||||||||||||||
| Interest cost | ||||||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | ||||||||||||||||||||||
| Recognized net actuarial gain | ( | ( | ||||||||||||||||||||||||
| Amortization of prior service costs | ||||||||||||||||||||||||||
| Net periodic pension cost | $ | $ | $ | $ | ||||||||||||||||||||||
Contributions to the Bargaining Plan are based on actuarially determined amounts and are limited to the amounts currently deductible for income tax purposes. The Company did not make any contributions to the Bargaining Plan during the first half of 2026. The Company expects to make cash contributions to the Bargaining Plan of up to $5.0 million during 2026.
Postretirement Benefits
The Company provides postretirement benefits for employees meeting specified qualifying criteria. The Company recognizes the cost of postretirement benefits, which consist principally of medical benefits, during employees’ periods of active service. The Company does not prefund these benefits and has the right to modify or terminate certain of these benefits in the future.
The components of net periodic postretirement benefit cost were as follows:
| Second Quarter | First Half | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Service cost | $ | $ | $ | $ | ||||||||||||||||||||||
| Interest cost | ||||||||||||||||||||||||||
| Recognized net actuarial loss | ||||||||||||||||||||||||||
| Net periodic postretirement benefit cost | $ | $ | $ | $ | ||||||||||||||||||||||
18. Other Liabilities
Other liabilities consisted of the following:
| (in thousands) | July 3, 2026 | December 31, 2025 | ||||||||||||
| Noncurrent portion of acquisition related contingent consideration | $ | $ | ||||||||||||
| Accruals for executive benefit plans | ||||||||||||||
| Noncurrent deferred proceeds from related parties | ||||||||||||||
| Other | ||||||||||||||
| Total other liabilities | $ | $ | ||||||||||||
21
19. Debt
Following is a summary of the Company’s debt:
| (in thousands) | Maturity Date | Interest Rate | Interest Paid | Public/ Nonpublic | July 3, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||
Senior notes(1) | 10/10/2026 | Quarterly | Nonpublic | $ | $ | |||||||||||||||||||||||||||||||||
Term loan facility (the “Three-Year Term Loan Facility”)(2) | 12/8/2028 | Variable | Monthly | Nonpublic | ||||||||||||||||||||||||||||||||||
Senior bonds (the “2029 Senior Bonds”)(3) | 6/1/2029 | Semi-annually | Public | |||||||||||||||||||||||||||||||||||
Revolving credit facility(4) | 6/10/2029 | Variable | Varies | Nonpublic | ||||||||||||||||||||||||||||||||||
| Senior notes | 3/21/2030 | Quarterly | Nonpublic | |||||||||||||||||||||||||||||||||||
Term loan facility (the “Five-Year Term Loan Facility”)(2) | 12/6/2030 | Variable | Monthly | Nonpublic | ||||||||||||||||||||||||||||||||||
Senior bonds (the “2034 Senior Bonds”)(5) | 6/1/2034 | Semi-annually | Public | |||||||||||||||||||||||||||||||||||
Unamortized discount on senior bonds(3)(5) | Various | ( | ( | |||||||||||||||||||||||||||||||||||
| Debt issuance costs | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||||||||||||||
Less: Current portion of debt(1) | ||||||||||||||||||||||||||||||||||||||
| Total long-term debt | $ | $ | ||||||||||||||||||||||||||||||||||||
(1)As of July 3, 2026 and December 31, 2025, the senior notes maturing in 2026 were classified as current portion of debt in the condensed consolidated balance sheets.
(2)The Term Loan Facilities (as defined below) were issued in connection with the financing of the Repurchase, as further discussed in Note 2.
(3)The 2029 Senior Bonds were issued at 99.843 % of par.
(4)The Company’s revolving credit facility has an aggregate maximum borrowing capacity of $500 million. The Company currently believes all banks participating in the revolving credit facility have the ability to and will meet any funding requests from the Company.
(5)The 2034 Senior Bonds were issued at 99.893 % of par.
The Company mitigates its financing risk by using multiple financial institutions and only entering into credit arrangements with institutions with investment grade credit ratings. The Company monitors counterparty credit ratings on an ongoing basis.
The Company entered into the Bridge Facility, dated as of November 7, 2025, providing for a 364-day senior unsecured bridge term loan facility in the aggregate principal amount of $1.20 billion to fund the Repurchase. Also on November 7, 2025, the Company borrowed $1.20 billion under the Bridge Facility, the full amount available under the Bridge Facility.
On December 8, 2025, the Company entered into a term loan agreement, providing for (i) the Three-Year Term Loan Facility, a senior unsecured term loan facility in the aggregate principal amount of up to $900 million, maturing on December 8, 2028 and (ii) the Five-Year Term Loan Facility, a senior unsecured term loan facility in the aggregate principal amount of up to $450 million, maturing on December 6, 2030 (collectively, the “Term Loan Facilities”). Also on December 8, 2025, the Company borrowed $1.35 billion under the Term Loan Facilities, the full amount available under the Term Loan Facilities. In conjunction with the borrowings under the Term Loan Facilities, the Company modified and extinguished the Bridge Facility discussed above, fully repaying the $1.20 billion outstanding under the Bridge Facility through a net cash settlement with the lender. As of July 3, 2026, the Company has repaid $275 million of the $450 million aggregate principal balance outstanding under the Five-Year Term Loan Facility using cash on hand, bringing the aggregate principal balance outstanding to $175 million.
The indenture under which the 2029 Senior Bonds and the 2034 Senior Bonds were issued does not include financial covenants, but does limit the incurrence of certain liens and encumbrances as well as indebtedness by the Company’s subsidiaries in excess of certain amounts. The agreements under which the Company’s nonpublic debt, including its revolving credit facility and the Term Loan Facilities, was issued include two financial covenants: a consolidated cash flow/fixed charges ratio and a consolidated funded indebtedness/cash flow ratio (each as defined in the respective agreement). The Company was in compliance with these covenants as of July 3, 2026. These covenants have not restricted the Company’s liquidity or capital resources.
22
On February 12, 2026, the Company entered into three $150 Three-Year Term Loan Facility and the Five-Year Term Loan Facility. Over the next 12 months, the Company expects approximately $2 million related to these interest rate swaps to be released from accumulated other comprehensive loss. These interest rate swaps are designated as cash flow hedging instruments and changes in their fair values are not expected to be material to the condensed consolidated balance sheets. Changes in the fair values of these interest rate swaps were classified as accumulated other comprehensive loss on the condensed consolidated balance sheets and included in the condensed consolidated statements of comprehensive income. Settlements of interest rate swaps are included in cash flows from operating activities in the condensed consolidated statements of cash flows.
All outstanding debt has been issued by the Company and none has been issued by any of its subsidiaries. There are no guarantees of the Company’s debt.
20. Commitments and Contingencies
Manufacturing Cooperatives
The Company is obligated to purchase at least 80 % of its requirements of plastic bottles for certain designated territories from Southeastern. The Company is also obligated to purchase 16.0 million cases of finished product from SAC on an annual basis through June 2034. The Company purchased 13.9 million cases and 13.3 million cases of finished product from SAC in the first half of 2026 and the first half of 2025, respectively.
The following table summarizes the Company’s purchases from these manufacturing cooperatives:
| Second Quarter | First Half | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Purchases from Southeastern | $ | $ | $ | $ | ||||||||||||||||||||||
| Purchases from SAC | ||||||||||||||||||||||||||
| Total purchases from manufacturing cooperatives | $ | $ | $ | $ | ||||||||||||||||||||||
The Company guarantees a portion of SAC’s debt, which matures in 2028, based on the ratio of SAC’s total liabilities to SAC’s shareholders’ equity as of December 31 of each year. As of July 3, 2026 and December 31, 2025, the ratio of SAC’s total liabilities to SAC’s shareholders’ equity was such that the Company was not required to guarantee any of SAC’s debt. In the event SAC fails to fulfill its commitments under the related debt, the Company would be responsible for payment to the lenders up to the level of the guarantee. The Company does not anticipate SAC will fail to fulfill its commitments related to the debt. The Company further believes SAC has sufficient assets, including production equipment, facilities and working capital, and the ability to adjust the selling prices of its products to adequately mitigate the risk of material loss relating to the Company’s guarantee.
The Company holds no assets as collateral against the SAC guarantee, the fair value of which is immaterial to the condensed consolidated financial statements. The Company monitors its investment in SAC and would be required to write down its investment if an impairment, other than a temporary impairment, was identified. No impairment of the Company’s investment in SAC was identified as of July 3, 2026, and there was no impairment identified in 2025.
Other Commitments and Contingencies
The Company has standby letters of credit and other collateral, primarily related to its property and casualty insurance programs. These letters of credit and other collateral totaled $52.7 million on July 3, 2026 and $47.5 million on December 31, 2025.
The Company participates in long-term marketing contractual arrangements with certain prestige properties, athletic venues and other locations. As of July 3, 2026 and December 31, 2025, the future payments related to these contractual arrangements, which expire at various dates through 2035, amounted to $146.1 million and $151.1 million, respectively.
The Company is involved in various claims and legal proceedings which have arisen in the ordinary course of its business. Although it is difficult to predict the ultimate outcome of these claims and legal proceedings, management believes the ultimate disposition of these matters will not have a material adverse effect on the financial condition, results of operations or cash flows of the Company. No material amount of loss in excess of recorded amounts is believed to be reasonably possible as a result of these claims and legal proceedings.
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The Company is subject to audits by tax authorities in jurisdictions where it conducts business. These audits may result in assessments that are subsequently resolved with the authorities or potentially through the courts. Management believes the Company has adequately provided for any assessments likely to result from these audits; however, final assessments, if any, could be different than the amounts recorded in the condensed consolidated financial statements.
21. Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss) (“AOCI(L)”) is composed of adjustments to the Company’s pension and postretirement medical benefit plans, unrealized gains/losses on the Company’s interest rate swap agreements and unrealized gains/losses on the Company’s available-for-sale short-term investments.
Following is a summary of AOCI(L) for the second quarter of 2026 and the second quarter of 2025:
| Gains (Losses) During the Period | Reclassification to Income | |||||||||||||||||||||||||||||||||||||
| (in thousands) | April 3, 2026 | Pre-tax Activity | Tax Effect | Pre-tax Activity | Tax Effect | July 3, 2026 | ||||||||||||||||||||||||||||||||
| Net pension activity: | ||||||||||||||||||||||||||||||||||||||
| Actuarial gain | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Prior service costs | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Net postretirement benefits activity: | ||||||||||||||||||||||||||||||||||||||
| Actuarial loss | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Prior service costs | ( | ( | ||||||||||||||||||||||||||||||||||||
| Interest rate swaps | ( | |||||||||||||||||||||||||||||||||||||
| Reclassification of stranded tax effects | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total AOCI(L) | $ | ( | $ | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||
| Gains (Losses) During the Period | Reclassification to Income | |||||||||||||||||||||||||||||||||||||
| (in thousands) | March 28, 2025 | Pre-tax Activity | Tax Effect | Pre-tax Activity | Tax Effect | June 27, 2025 | ||||||||||||||||||||||||||||||||
| Net pension activity: | ||||||||||||||||||||||||||||||||||||||
| Actuarial gain | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| Prior service costs | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Net postretirement benefits activity: | ||||||||||||||||||||||||||||||||||||||
| Actuarial gain | ||||||||||||||||||||||||||||||||||||||
| Prior service costs | ( | ( | ||||||||||||||||||||||||||||||||||||
| Unrealized gain (loss) on short-term investments | ( | ( | ||||||||||||||||||||||||||||||||||||
| Reclassification of stranded tax effects | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total AOCI(L) | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||
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Following is a summary of AOCI(L) for the first half of 2026 and the first half of 2025:
| Gains (Losses) During the Period | Reclassification to Income | |||||||||||||||||||||||||||||||||||||
| (in thousands) | December 31, 2025 | Pre-tax Activity | Tax Effect | Pre-tax Activity | Tax Effect | July 3, 2026 | ||||||||||||||||||||||||||||||||
| Net pension activity: | ||||||||||||||||||||||||||||||||||||||
| Actuarial gain | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Prior service costs | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Net postretirement benefits activity: | — | |||||||||||||||||||||||||||||||||||||
| Actuarial loss | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Prior service costs | ( | ( | ||||||||||||||||||||||||||||||||||||
| Interest rate swaps | ( | |||||||||||||||||||||||||||||||||||||
| Reclassification of stranded tax effects | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total AOCI(L) | $ | ( | $ | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||
| Gains (Losses) During the Period | Reclassification to Income | |||||||||||||||||||||||||||||||||||||
| (in thousands) | December 31, 2024 | Pre-tax Activity | Tax Effect | Pre-tax Activity | Tax Effect | June 27, 2025 | ||||||||||||||||||||||||||||||||
| Net pension activity: | ||||||||||||||||||||||||||||||||||||||
| Actuarial gain | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| Prior service costs | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Net postretirement benefits activity: | ||||||||||||||||||||||||||||||||||||||
| Actuarial gain | ||||||||||||||||||||||||||||||||||||||
| Prior service costs | ( | ( | ||||||||||||||||||||||||||||||||||||
| Unrealized gain (loss) on short-term investments | ( | ( | ||||||||||||||||||||||||||||||||||||
| Reclassification of stranded tax effects | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total AOCI(L) | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||
22. Supplemental Disclosures of Cash Flow Information
Changes in current assets and current liabilities affecting cash were as follows:
| First Half | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Accounts receivable, trade | $ | ( | $ | ( | ||||||||||
| Allowance for doubtful accounts | ( | |||||||||||||
| Accounts receivable from The Coca‑Cola Company | ( | |||||||||||||
| Accounts receivable, other | ( | |||||||||||||
| Inventories | ( | ( | ||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Short-term investments | ( | |||||||||||||
| Accounts payable, trade | ||||||||||||||
| Accounts payable to The Coca‑Cola Company | ||||||||||||||
| Other accrued liabilities | ||||||||||||||
| Accrued compensation | ( | ( | ||||||||||||
| Change in current assets less current liabilities | $ | ( | $ | ( | ||||||||||
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations of Coca‑Cola Consolidated, Inc., a Delaware corporation (together with its majority-owned subsidiaries, the “Company,” “we,” “us” or “our”), is intended to help the reader understand our financial condition and results of operations and is provided as an addition to, and should be read in conjunction with, our condensed consolidated financial statements and the accompanying notes to the condensed consolidated financial statements. The condensed consolidated financial statements include the accounts and the consolidated operations of the Company and its majority-owned subsidiaries. All comparisons are to the corresponding period in the prior year unless specified otherwise.
Each of the Company’s quarters, other than the fourth quarter, ends on the Friday closest to the last day of the corresponding quarterly calendar period. The Company’s fourth quarter and fiscal year end on December 31 regardless of the day of the week on which December 31 falls. The condensed consolidated financial statements presented are:
•The financial position as of July 3, 2026 and December 31, 2025.
•The results of operations, comprehensive income and changes in stockholders’ (deficit) equity for the three-month periods ended July 3, 2026 (the “second quarter” of fiscal 2026 (“2026”)) and June 27, 2025 (the “second quarter” of fiscal 2025 (“2025”)) and the six-month periods ended July 3, 2026 (the “first half” of 2026) and June 27, 2025 (the “first half” of 2025).
•The changes in cash flows for the first half of 2026 and the first half of 2025.
Our Business and the Nonalcoholic Beverage Industry
We distribute, market and manufacture nonalcoholic beverages in territories spanning 14 states and the District of Columbia. The Company was incorporated in 1980 and, together with its predecessors, has been in the nonalcoholic beverage manufacturing and distribution business since 1902. We are the largest Coca‑Cola bottler in the United States. Approximately 85% of our total bottle/can sales volume to retail customers consists of products of The Coca‑Cola Company, which include some of the most recognized and popular beverage brands in the world. We also distribute products for several other beverage companies, including Monster Energy Company and Keurig Dr Pepper Inc. (“Dr Pepper”). Our Purpose is to honor God in all we do, to serve others, to pursue excellence and to grow profitably. Our Common Stock, par value $1.00 per share (“Common Stock”), is traded on The Nasdaq Global Select Market under the symbol “COKE.”
We offer a range of nonalcoholic beverage products and flavors, including both sparkling and still beverages, designed to meet the demands of our consumers. Sparkling beverages are carbonated beverages and the Company’s principal sparkling beverage is Coca‑Cola. Still beverages include energy products and noncarbonated beverages such as bottled water, ready-to-drink tea, ready-to-drink coffee, enhanced water, juices and sports drinks.
Our sales are divided into two main categories: (i) bottle/can sales and (ii) other sales. Bottle/can sales include products packaged primarily in plastic bottles and aluminum cans. Bottle/can net pricing is based on the invoice price charged to customers reduced by any promotional allowances. Bottle/can net pricing per unit is impacted by the price charged per package, the sales volume generated for each package and the channels in which those packages are sold. Other sales include sales to other Coca‑Cola bottlers, post-mix sales, transportation revenue and equipment maintenance revenue. Post-mix products are dispensed through equipment that mixes fountain syrups with carbonated or still water, enabling fountain retailers to sell finished products to consumers in cups or glasses.
The Company’s products are sold and distributed in the United States through various channels, which include selling directly to customers, including grocery stores, mass merchandise stores, club stores, convenience stores and drug stores, selling to on-premise locations, where products are typically consumed immediately, such as restaurants, schools, amusement parks and recreational facilities, and selling through other channels such as vending machine outlets. The Company also distributes its products using alternative routes to market (“ARTM”), which include distribution by third-party distributors, the manufacturer of the product or the customer’s supply chain infrastructure.
The nonalcoholic beverage industry is highly competitive for both sparkling and still beverages. Our competitors include bottlers and distributors of nationally and regionally advertised and marketed products, as well as bottlers and distributors of private label beverages. Our principal competitors include local bottlers of PepsiCo, Inc. products and, in some regions, local bottlers of Dr Pepper products.
The principal methods of competition in the nonalcoholic beverage industry are new brand and product introductions, point-of-sale merchandising, new vending and dispensing equipment, packaging changes, pricing, sales promotions, product quality, retail
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space management, customer service, frequency of distribution and advertising. We believe we are competitive in our territories with respect to these methods of competition.
Business seasonality results primarily from higher unit sales of the Company’s products in the second and third quarters of the fiscal year, as sales of our products are typically correlated with warmer weather. We believe that we and other manufacturers from whom we purchase finished products have adequate production capacity to meet sales demand for sparkling and still beverages during these peak periods. Sales volume can also be impacted by weather conditions. Fixed costs, such as depreciation expense, are not significantly impacted by business seasonality.
Executive Summary
Volume was up 7.6% in the second quarter of 2026 and up 10.3% in the first half of the year, or 7.1% on an adjusted basis, as presented in the “Adjusted Results (Non-GAAP)” section, for the first half of 2026. Our Sparkling category volume increased 7.0% in the second quarter of 2026 and 9.4% in the first half of 2026, or 6.2% on an adjusted basis, as presented in the “Adjusted Results (Non-GAAP)” section. Sparkling volume growth reflected broad-based gains across the portfolio, led by our zero-sugar and flavor offerings. Still category volume increased 9.4% in the second quarter of 2026 and 12.9% in the first half of 2026, or 9.8% on an adjusted basis, as presented in the “Adjusted Results (Non-GAAP)” section. The Still category volume growth was driven by strong performance across many brands, including Core Power, Powerade, smartwater and Monster. Dasani casepack water, which carries a lower net selling price as compared to other Still products, also contributed to a portion of the growth within our Still category. In addition, total volume in the second quarter of 2026 was also higher as compared to the second quarter of 2025 due to the timing of the Fourth of July holiday, which we estimate impacted total volume by approximately 1.0%.
Net sales increased 10.6% to $2.1 billion in the second quarter of 2026. The growth in net sales was primarily the result of our volume growth and annual pricing actions, as well as a shift in the timing of the Fourth of July holiday. Sparkling and Still net sales increased 9.7% and 11.5%, respectively, in the second quarter of 2026 compared to the second quarter of 2025. The increase in Sparkling category net sales was driven primarily by sales of multi-pack, take-home aluminum can packages sold within our large store, club and value channels. Net sales of our Still products were especially strong in our convenience and value store channels.
Gross profit in the second quarter of 2026 was $778.4 million, an increase of $35.9 million, or 4.8%. On an adjusted basis, as defined in the “Adjusted Results (Non-GAAP)” section, gross profit increased $47.3 million, or 6.4%. Gross margin in the second quarter of 2026 decreased 210 basis points to 37.9%. Adjusted gross margin in the second quarter of 2026, as presented in the “Adjusted Results (Non-GAAP)” section, decreased 150 basis points to 38.4%. The reduction in gross margin resulted primarily from an increase in aluminum costs, which was caused by geopolitical conflicts, supply constraints and the impact of elevated tariffs. These elevated aluminum costs resulted in approximately $45 million in additional input costs compared to the second quarter of 2025, which outpaced our annual pricing actions.
Selling, delivery and administrative (“SD&A”) expenses in the second quarter of 2026 increased $36.7 million, or 7.8%. SD&A expenses as a percentage of net sales decreased to 24.7% in the second quarter of 2026 from 25.4% in the second quarter of 2025. The increase in SD&A expenses was primarily driven by an additional investment in the base wages of our front-line teammates, which became effective at the beginning of the third quarter of 2025. The growth in SD&A expenses was also driven by an increase in labor costs related to annual wage adjustments, higher employee benefit costs and elevated fuel costs. In addition, increased volume in the second quarter was also a driver of variable expenses during the quarter. SD&A expenses in the first half of 2026 increased $88.9 million or 9.8%. Approximately $25.0 million of the increase was related to the six additional days in the first half of 2026.
Income from operations in the second quarter of 2026 was $271.3 million, compared to $272.1 million in the second quarter of 2025, a decrease of $0.7 million, or 0.3%. On an adjusted basis, as defined in the “Adjusted Results (Non-GAAP)” section, income from operations in the second quarter of 2026 was $284.9 million, an increase of $14.9 million. Operating margin for the second quarter of 2026 was 13.2% as compared to 14.7% for the second quarter of 2025, a decrease of 150 basis points. Adjusted operating margin for the second quarter of 2026, as presented in the “Adjusted Results (Non-GAAP)” section, was 13.9% as compared to 14.6% for the second quarter of 2025, a decrease of 70 basis points. For the first half of 2026, income from operations increased $47.0 million, or 10.2%. The six additional selling days in the first half of 2026 accounted for approximately $30.0 million of the increase in income from operations.
Net income in the second quarter of 2026 was $158.8 million, compared to $187.4 million in the second quarter of 2025, a decline of $28.6 million, or 15.2%. On an adjusted basis, as defined in the “Adjusted Results (Non-GAAP)” section, net income in the second quarter of 2026 was $187.7 million, compared to $195.2 million in the second quarter of 2025, a decrease of $7.5 million,
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or 3.8%. Net income in the second quarter of 2026 was adversely impacted by non-cash, fair value adjustments to both our acquisition related contingent consideration and commodity hedging instruments, as well as an increase in net interest expense.
Net income for the first half of 2026 was $270.4 million, compared to $291.0 million in the first half of 2025, a decline of $20.6 million, or 7.1%. Net income for the first half of 2026 was adversely impacted by an increase in net interest expense and non-cash, fair value adjustments to our acquisition related contingent consideration. These decreases in net income were offset by the six additional days in the first half of 2026, which increased net income by approximately $22.6 million during the period. Income tax expense in the first half of 2026 was $96.0 million, compared to $101.5 million in the first half of 2025, resulting in an effective income tax rate of approximately 26% for both periods.
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, we invested approximately $147 million in capital expenditures. In fiscal year 2026, we expect capital expenditures to be approximately $300 million. During the second quarter of 2026, we made early repayments of $125 million of principal on one of our term loans, for total year-to-date early term loan repayments of $275 million.
As noted above, the first quarter of 2026 included six extra days as compared to the first quarter of 2025. The fourth quarter of 2026 will include six fewer days as compared to the fourth quarter of 2025. The full fiscal years of 2026 and 2025 have the same number of days.
Areas of Emphasis
Key priorities for the Company include executing our commercial strategy, executing our revenue management strategy, optimizing our supply chain, generating cash flow, determining the optimal route to market and creating and maintaining a digitally enabled selling platform.
Commercial Execution: Our success is dependent on our ability to execute our commercial strategy within our customers’ stores. Our ability to obtain shelf space within stores and remain in-stock across our portfolio of brands and packages in a profitable manner will have a significant impact on our results. We are focused on execution at every step in our supply chain, including raw material and finished product procurement, manufacturing conversion, transportation, warehousing and distribution, to ensure in-store execution can occur. We continue to invest in tools and technology to enable our teammates to operate more effectively and efficiently with our customers and to drive long-term value in our business. We also continue to focus on opportunities to enhance the customer experience by adapting to changes in our customer landscape, enabling operational flexibility and focusing on customer service.
Revenue Management: Our revenue management strategy focuses on pricing our brands and packages optimally within product categories and channels, creating effective working relationships with our customers and making disciplined, fact-based decisions. Pricing decisions are made considering a variety of factors, including brand strength, competitive environment, input costs, the roles certain brands play in our product portfolio and other market conditions.
Supply Chain Optimization: We are continually focused on optimizing our supply chain, which includes identifying nearby warehousing and distribution operations that can be consolidated into new facilities to increase capacity, expand production capabilities, reduce overall production costs and add automation to allow the Company to better serve its customers and consumers. The Company expects to continue to make significant capital investments to optimize our supply chain and to invest for future growth during 2026.
Cash Flow Generation: We have several initiatives in place to optimize cash flow, improve profitability, prudently manage capital expenditures and enhance capital returns to our stockholders. We believe strengthening our balance sheet gives us the flexibility to make optimal capital allocation decisions for long-term value creation. We have returned, and expect to continue to return, value to our stockholders.
Optimal Route to Market: We are focused on implementing optimal methods of distribution of our products within our territories. Direct store delivery (“DSD”) is our preferred and primary route to market. Our typical DSD method uses Company-owned vehicles and warehouses, but we increasingly shifted to alternative methods of distribution, or ARTM, beginning in 2024 and intend to continue using ARTM at similar rates for the foreseeable future. For example, in instances of post-mix delivery for use in fountain machines, we have shifted, and continue to shift, our delivery method towards alternative distributors in order to enhance profitability and customer service. We receive a fee from our brand partners on these post-mix gallons delivered to locally managed customers in our territories, which is recorded as a reduction to cost of sales.
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In instances of bottle/can delivery, we have shifted certain products for certain customers and channels of business to ARTM. These ARTM include third-party distributors, the manufacturer of the product or the customer’s supply chain infrastructure. These bottle/can arrangements generally come with favorable commercial terms for the Company, and, because we have the exclusive distribution rights for nonalcoholic beverages within our franchise territories, we receive fees from our brand partners for the delivery of qualified product in our territories. These fees are reported in net sales but not our reported volume metrics.
During the first half of 2026, approximately two-thirds of our post-mix gallons and less than 10% of our bottle/can volume were delivered through ARTM. These ratios are consistent with the first half of 2025.
Digitally Enabled Selling Platform: Through our investment in CONA Services LLC, we, along with other Coca-Cola bottlers, have built a digitally enabled selling platform called MyCoke that we believe has enabled, and will continue to enable, us to better serve our customers. This platform creates a more seamless order and payment platform for certain customers and we expect this platform will continue to enable us to enhance customer service and create more selling opportunities for our teammates. This platform is currently targeted to certain on-premise and small store customers.
Results of Operations
Second Quarter Results
The Company’s results of operations for the second quarter of 2026 and the second quarter of 2025 are highlighted in the table below and discussed in the following paragraphs.
| Second Quarter | ||||||||||||||||||||
| (in thousands) | 2026 | 2025 | Change | |||||||||||||||||
| Net sales | $ | 2,052,420 | $ | 1,855,519 | $ | 196,901 | ||||||||||||||
| Cost of sales | 1,274,007 | 1,113,023 | 160,984 | |||||||||||||||||
| Gross profit | 778,413 | 742,496 | 35,917 | |||||||||||||||||
| Selling, delivery and administrative expenses | 507,074 | 470,412 | 36,662 | |||||||||||||||||
| Income from operations | 271,339 | 272,084 | (745) | |||||||||||||||||
| Interest expense, net | 30,481 | 5,948 | 24,533 | |||||||||||||||||
| Mark-to-market on acquisition related contingent consideration | 24,723 | 12,390 | 12,333 | |||||||||||||||||
| Other expense, net | 1,015 | 754 | 261 | |||||||||||||||||
| Income before taxes | 215,120 | 252,992 | (37,872) | |||||||||||||||||
| Income tax expense | 56,299 | 65,605 | (9,306) | |||||||||||||||||
| Net income | 158,821 | 187,387 | (28,566) | |||||||||||||||||
| Other comprehensive income (loss), net of tax | 1,160 | (32) | 1,192 | |||||||||||||||||
Comprehensive income | $ | 159,981 | $ | 187,355 | $ | (27,374) | ||||||||||||||
Net Sales
Net sales increased $196.9 million, or 10.6%, to $2.05 billion in the second quarter of 2026, as compared to $1.86 billion in the second quarter of 2025. The growth in net sales was primarily the result of increased case sales volume during the second quarter of 2026, which was up 7.6% as compared to the second quarter of 2025. The growth in net sales was also attributable to higher average bottle/can sales price per unit charged to retail customers, largely as a result of annual pricing actions, as well as a shift in the timing of the Fourth of July holiday.
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Net sales by product category were as follows:
| Second Quarter | ||||||||||||||||||||
| (in thousands) | 2026 | 2025 | % Change | |||||||||||||||||
| Bottle/can sales: | ||||||||||||||||||||
| Sparkling beverages | $ | 1,184,336 | $ | 1,079,956 | 9.7 | % | ||||||||||||||
| Still beverages | 697,878 | 626,078 | 11.5 | % | ||||||||||||||||
| Total bottle/can sales | 1,882,214 | 1,706,034 | 10.3 | % | ||||||||||||||||
| Other sales: | ||||||||||||||||||||
| Sales to other Coca‑Cola bottlers | 95,663 | 95,373 | 0.3 | % | ||||||||||||||||
| Post-mix sales and other | 74,543 | 54,112 | 37.8 | % | ||||||||||||||||
| Total other sales | 170,206 | 149,485 | 13.9 | % | ||||||||||||||||
| Total net sales | $ | 2,052,420 | $ | 1,855,519 | 10.6 | % | ||||||||||||||
Product category sales volume of standard physical cases (as defined below) and the percentage change by product category were as follows:
| Second Quarter | ||||||||||||||||||||
| (in thousands) | 2026 | 2025 | % Change | |||||||||||||||||
| Bottle/can sales volume: | ||||||||||||||||||||
| Sparkling beverages | 72,217 | 67,487 | 7.0 | % | ||||||||||||||||
| Still beverages | 25,406 | 23,219 | 9.4 | % | ||||||||||||||||
| Total bottle/can sales volume | 97,623 | 90,706 | 7.6 | % | ||||||||||||||||
A standard physical case is a volume metric used to standardize differing package configurations in order to measure delivered cases on an equivalent basis. As the Company evaluates its volume metrics, it reassesses the way in which physical case volume is measured, which may lead to differences from previously presented results in order to conform with current period standard volume measurement techniques, as used by management. Additionally, as the Company introduces new products, it reassesses the category assigned to its products at the SKU level, therefore categorization could differ from previously presented results in order to conform with current period categorization. Any differences are not material.
The bottle/can sales volume above represents volume that is delivered directly to our customer outlets using Company-owned vehicles and warehouses. In order to serve our customers in the most efficient way, respond to customer demands and increase profitability, the Company has, in certain circumstances, shifted the delivery of our products to third-party distributors, the manufacturer of the product or the customer’s supply chain infrastructure, rather than using Company-owned vehicles and warehouses. As a result, these cases are not included in our reported case sales volume for the first half of 2026 or the first half of 2025.
Cost of Sales
Inputs representing a substantial portion of the Company’s cost of sales include: (i) purchases of finished products, (ii) raw material costs, including aluminum cans, plastic bottles, carbon dioxide and sweetener, (iii) concentrate costs and (iv) manufacturing costs, including labor, overhead and warehouse costs. In addition, cost of sales includes shipping, handling and fuel costs related to the movement of finished products from manufacturing plants to distribution centers, amortization expense of distribution rights, distribution fees of certain products and marketing credits and post-mix funding from our brand partners. Input costs for products we produce, including underlying commodity costs for aluminum cans, plastic bottles, carbon dioxide and sweetener, as well as labels and other packaging materials, and excluding concentrate, represent approximately 20% to 25% of total annual cost of sales.
Cost of sales increased $161.0 million, or 14.5%, to $1.27 billion in the second quarter of 2026, as compared to $1.11 billion in the second quarter of 2025. The increase in cost of sales was largely driven by the increase in case sales volume as compared to the second quarter of 2025. Cost of sales also continued to be impacted by higher input costs, specifically aluminum costs, which reflected the uncertainty surrounding geopolitical conflicts, supply constraints and the impact of elevated tariffs, and resulted in approximately $45 million in additional input costs compared to the second quarter of 2025.
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The Company relies extensively on advertising and sales promotions in the marketing of its products. The Coca‑Cola Company and other beverage companies that supply concentrates, syrups and finished products to the Company make substantial marketing and advertising expenditures, including national advertising programs, to develop their brand identities and to promote sales in the Company’s territories. Our brand partners also provide funding related to the delivery of post-mix gallons to locally managed customers within the Company’s territories. Certain of these marketing, advertising and other funding expenditures are made pursuant to annual arrangements. Total funding support from The Coca‑Cola Company and other beverage companies, which includes both direct payments to the Company and payments to customers for marketing programs, was $58.0 million in the second quarter of 2026 and $52.4 million in the second quarter of 2025.
Selling, Delivery and Administrative Expenses
SD&A expenses include the following: sales management labor costs, distribution costs resulting from transporting finished products from distribution centers to customer locations, distribution center overhead including depreciation expense, distribution center warehousing costs, delivery vehicles and cold drink equipment, point-of-sale expenses, advertising expenses, cold drink equipment repair costs, amortization of intangible assets and administrative support labor and operating costs. Labor costs represent approximately two-thirds of total annual SD&A expenses.
SD&A expenses increased $36.7 million, or 7.8%, to $507.1 million in the second quarter of 2026, as compared to $470.4 million in the second quarter of 2025. SD&A expenses increased due to an additional investment in the base wages of our front-line teammates, which became effective at the beginning of the third quarter of 2025. The increase in SD&A expenses was also driven by an increase in labor costs related to annual wage adjustments, higher employee benefit costs and elevated fuel costs during the quarter. In addition, increased volume in the second quarter was also a driver of variable expense during the quarter. SD&A expenses as a percentage of net sales decreased to 24.7% in the second quarter of 2026 from 25.4% in the second quarter of 2025.
Shipping and handling costs included in SD&A expenses were approximately $219 million in the second quarter of 2026 and approximately $207 million in the second quarter of 2025.
Interest Expense, Net
Interest expense, net increased $24.5 million to $30.5 million in the second quarter of 2026, as compared to $5.9 million in the second quarter of 2025. The increase in interest expense, net was driven by a reduction in interest income primarily related to lower cash and short-term investment balances in the second quarter of 2026 as compared to the second quarter of 2025. The increase in interest expense, net was also driven by an increase in interest expense on higher debt balances in the second quarter of 2026 as compared to the second quarter of 2025.
Mark-to-Market on Acquisition Related Contingent Consideration
Each reporting period, the Company adjusts its acquisition related contingent consideration liability to fair value, which is determined by discounting future expected acquisition related sub-bottling payments using the Company’s estimated weighted average cost of capital (“WACC”) and future cash flow projections, and records the fair value adjustment as mark-to-market on acquisition related contingent consideration in the condensed consolidated statement of operations.
Mark-to-market on acquisition related contingent consideration was an increase of $24.7 million in the second quarter of 2026 and an increase of $12.4 million in the second quarter of 2025. During the second quarter of 2026, the $24.7 million increase in the fair value of the acquisition related contingent consideration liability was primarily driven by higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments, partially offset by an increase in the WACC used to calculate the fair value of the liability. During the second quarter of 2025, the $12.4 million increase in the fair value of the acquisition related contingent consideration liability was primarily driven by a decrease in the WACC used to calculate the fair value of the liability and changes in projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments.
Other Expense, Net
Other expense, net was $1.0 million in the second quarter of 2026, as compared to $0.8 million in the second quarter of 2025.
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Income Tax Expense
The Company’s effective income tax rate was 26.2% for the second quarter of 2026 and 25.9% for the second quarter of 2025. The Company’s income tax expense decreased $9.3 million, or 14.2%, to $56.3 million for the second quarter of 2026, as compared to $65.6 million for the second quarter of 2025. The decrease in income tax expense was primarily attributable to lower income before taxes during the second quarter of 2026 as compared to the second quarter of 2025.
Other Comprehensive Income (Loss), Net of Tax
Other comprehensive income (loss), net of tax was income of $1.2 million in the second quarter of 2026 and $0.0 million in the second quarter of 2025. The primary driver of the other comprehensive income, net of tax during the second quarter of 2026 was the mark-to-market adjustments recorded to the Company’s interest rate swap instruments during the period.
First Half Results
Our results of operations for the first half of 2026 and the first half of 2025 are highlighted in the table below and discussed in the following paragraphs. Results for the first half of 2026 include six additional days compared to the first half of 2025.
| First Half | ||||||||||||||||||||
(in thousands) | 2026 | 2025 | Change | |||||||||||||||||
| Net sales | $ | 3,899,088 | $ | 3,435,496 | $ | 463,592 | ||||||||||||||
| Cost of sales | 2,393,595 | 2,065,896 | 327,699 | |||||||||||||||||
| Gross profit | 1,505,493 | 1,369,600 | 135,893 | |||||||||||||||||
| Selling, delivery and administrative expenses | 996,630 | 907,696 | 88,934 | |||||||||||||||||
| Income from operations | 508,863 | 461,904 | 46,959 | |||||||||||||||||
| Interest expense, net | 62,544 | 12,822 | 49,722 | |||||||||||||||||
| Mark-to-market on acquisition related contingent consideration | 78,114 | 55,118 | 22,996 | |||||||||||||||||
| Other expense, net | 1,866 | 1,499 | 367 | |||||||||||||||||
| Income before taxes | 366,339 | 392,465 | (26,126) | |||||||||||||||||
| Income tax expense | 95,962 | 101,467 | (5,505) | |||||||||||||||||
| Net income | 270,377 | 290,998 | (20,621) | |||||||||||||||||
| Other comprehensive income (loss), net of tax | 2,498 | (46) | 2,544 | |||||||||||||||||
Comprehensive income | $ | 272,875 | $ | 290,952 | $ | (18,077) | ||||||||||||||
Net Sales
Net sales increased $463.6 million, or 13.5%, to $3.90 billion in the first half of 2026, as compared to $3.44 billion in the first half of 2025. The six additional days in the first half of 2026 as compared to the first half of 2025 accounted for approximately $132 million of the increase in net sales during the first half of 2026. Additionally, the increase in net sales was driven by higher case sales volume during the first half of 2026 as compared to the first half of 2025. On an adjusted basis, as presented in the “Adjusted Results (Non-GAAP)” section, sales volume increased by 7.1% in the first half of 2026. The increase in net sales was also attributable to higher average bottle/can sales price per unit charged to retail customers, largely as a result of annual pricing actions.
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Net sales by product category were as follows:
| First Half | ||||||||||||||||||||
| (in thousands) | 2026 | 2025 | % Change | |||||||||||||||||
| Bottle/can sales: | ||||||||||||||||||||
| Sparkling beverages | $ | 2,274,114 | $ | 2,013,792 | 12.9 | % | ||||||||||||||
| Still beverages | 1,303,012 | 1,135,235 | 14.8 | % | ||||||||||||||||
| Total bottle/can sales | 3,577,126 | 3,149,027 | 13.6 | % | ||||||||||||||||
| Other sales: | ||||||||||||||||||||
| Sales to other Coca‑Cola bottlers | 187,756 | 181,309 | 3.6 | % | ||||||||||||||||
| Post-mix sales and other | 134,206 | 105,160 | 27.6 | % | ||||||||||||||||
| Total other sales | 321,962 | 286,469 | 12.4 | % | ||||||||||||||||
| Total net sales | $ | 3,899,088 | $ | 3,435,496 | 13.5 | % | ||||||||||||||
Product category sales volume of standard physical cases and the percentage change by product category were as follows:
| First Half | ||||||||||||||||||||
| (in thousands) | 2026 | 2025 | % Change | |||||||||||||||||
| Bottle/can sales volume: | ||||||||||||||||||||
| Sparkling beverages | 137,982 | 126,116 | 9.4 | % | ||||||||||||||||
| Still beverages | 46,666 | 41,317 | 12.9 | % | ||||||||||||||||
| Total bottle/can sales volume | 184,648 | 167,433 | 10.3 | % | ||||||||||||||||
The following table summarizes the percentage of the Company’s total bottle/can sales volume to its largest customers, as well as the percentage of the Company’s total net sales that such volume represents:
| First Half | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Approximate percent of the Company’s total bottle/can sales volume: | ||||||||||||||
Walmart Inc.(1) | 21 | % | 21 | % | ||||||||||
The Kroger Co.(2) | 15 | % | 15 | % | ||||||||||
| Total approximate percent of the Company’s total bottle/can sales volume | 36 | % | 36 | % | ||||||||||
| Approximate percent of the Company’s total net sales: | ||||||||||||||
Walmart Inc.(1) | 18 | % | 17 | % | ||||||||||
The Kroger Co.(2) | 12 | % | 12 | % | ||||||||||
| Total approximate percent of the Company’s total net sales | 30 | % | 29 | % | ||||||||||
(1)Includes bottle/can sales volume related to the Walmart, Sam’s Club and Walmart Neighborhood Market chains.
(2)Includes bottle/can sales volume related to the Kroger and Harris Teeter chains.
Cost of Sales
Cost of sales increased $327.7 million, or 15.9%, to $2.39 billion in the first half of 2026, as compared to $2.07 billion in the first half of 2025. The increase in cost of sales was largely driven by an increase in case sales volume as compared to the first half of 2025, including the impact of six additional days in the first half of 2026, which accounted for approximately $77 million of the increase in cost of sales during the first half of 2026. Cost of sales was also impacted throughout the first half of 2026 by higher input costs, specifically aluminum costs, which reflected the uncertainty surrounding geopolitical conflicts, supply constraints and the impact of elevated tariffs, and resulted in approximately $80 million in additional input costs compared to the first half of 2025.
Total funding support from The Coca‑Cola Company and other beverage companies was $105.8 million in the first half of 2026, as compared to $97.6 million in the first half of 2025.
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Selling, Delivery and Administrative Expenses
SD&A expenses increased $88.9 million, or 9.8%, to $1.00 billion in the first half of 2026, as compared to $907.7 million in the first half of 2025. The increase in SD&A expenses was partially driven by the six additional days in the first half of 2026 as compared to the first half of 2025, which accounted for approximately $25 million of the increase in SD&A expenses during the first half of 2026. Additionally, SD&A expenses increased due to an additional investment in the base wages of our front-line teammates, which became effective at the beginning of the third quarter of 2025, an increase in labor costs related to annual wage adjustments and higher employee benefit costs. SD&A expenses as a percentage of net sales decreased to 25.6% in the first half of 2026 from 26.4% in the first half of 2025.
Shipping and handling costs included in SD&A expenses were approximately $435 million in the first half of 2026 and approximately $401 million in the first half of 2025. The increase in shipping and handling costs was also impacted by the six additional days in the first half of 2026.
Interest Expense, Net
Interest expense, net increased $49.7 million to $62.5 million in the first half of 2026, as compared to $12.8 million in the first half of 2025. The increase in interest expense, net was driven by a reduction in interest income primarily related to lower cash and short-term investment balances in the first half of 2026 as compared to the first half of 2025. The increase was also driven by an increase in interest expense on higher debt balances in the first half of 2026 as compared to the first half of 2025.
Mark-to-Market on Acquisition Related Contingent Consideration
Mark-to-market on acquisition related contingent consideration was an increase of $78.1 million in the first half of 2026 compared to an increase of $55.1 million in the first half of 2025. During the first half of 2026, the $78.1 million increase in the fair value of the acquisition related contingent consideration liability was driven by higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments and a decrease in the WACC used to calculate the fair value of the liability. During the first half of 2025, the $55.1 million increase in the fair value of the acquisition related contingent consideration liability was primarily driven by a decrease in the WACC used to calculate the fair value of the liability and changes in projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments.
Other Expense, Net
Other expense, net was $1.9 million in the first half of 2026 and $1.5 million in the first half of 2025.
Income Tax Expense
The Company’s effective income tax rate was 26.2% for the first half of 2026 and 25.9% for the first half of 2025. The Company’s income tax expense decreased $5.5 million, or 5.4%, to $96.0 million for the first half of 2026, as compared to $101.5 million for the first half of 2025. The decrease in income tax expense was primarily attributable to lower income before taxes during the first half of 2026 as compared to the first half of 2025.
Other Comprehensive Income (Loss), Net of Tax
Other comprehensive income (loss), net of tax was $2.5 million in the first half of 2026 and $0.0 million in the first half of 2025. The primary driver of the other comprehensive income, net of tax during the first half of 2026 was the mark-to-market adjustments recorded to the Company’s interest rate swap instruments during the period.
Segment Operating Results
The Company evaluates segment reporting in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 280, Segment Reporting, each reporting period, including evaluating the reporting package reviewed by the Chief Operating Decision Maker (the “CODM”). The Company has concluded the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer, as a group, represent the CODM. Segment asset information is not provided to the CODM.
The Company has two operating segments, each identified by its unique products and services. Nonalcoholic Beverages represents the vast majority of the Company’s consolidated net sales and income from operations. The accounting policies of the
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Nonalcoholic Beverages operating segment are the same as those described in the summary of significant accounting policies presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for 2025. The additional operating segment, which includes the Red Classic subsidiaries, does not meet the quantitative threshold for separate reporting and, therefore, has been reported as “All Other.”
Previously, the Company had three operating segments, Nonalcoholic Beverages and two additional operating segments, which included Data Ventures, Inc. and the Red Classic subsidiaries. Since the two additional operating segments did not meet the quantitative thresholds for separate reporting, either individually or in the aggregate, they were combined into “All Other.” As of December 31, 2025, the Data Ventures, Inc. operating segment was liquidated, dissolved and merged into the Nonalcoholic Beverages operating segment. For reporting purposes, all prior periods presented have been retroactively adjusted to reflect the dissolution of the Data Ventures, Inc. operating segment within the All Other operating segment and the merger of the Data Ventures, Inc. operating segment with the Nonalcoholic Beverages operating segment.
The CODM uses net sales, gross profit and income from operations in the annual budgeting and forecasting process. Monthly, the CODM considers budget-to-actual variances and current year to prior year variances for these profit measures when making strategic business decisions and allocating resources to Company operations.
The Company’s segment results are as follows:
| Second Quarter 2026 | ||||||||||||||||||||||||||
| (in thousands) | Nonalcoholic Beverages | All Other | Eliminations(1) | Total | ||||||||||||||||||||||
| Net sales | $ | 2,038,945 | $ | 92,343 | $ | (78,868) | $ | 2,052,420 | ||||||||||||||||||
| Cost of goods sold | 1,277,498 | 57,939 | (61,430) | 1,274,007 | ||||||||||||||||||||||
| Gross profit | 761,447 | 34,404 | (17,438) | 778,413 | ||||||||||||||||||||||
| Selling, delivery and administrative expenses: | ||||||||||||||||||||||||||
Payroll costs(2) | $ | 320,542 | $ | 13,628 | $ | — | $ | 334,170 | ||||||||||||||||||
Fleet costs(3) | 27,127 | 7,337 | — | 34,464 | ||||||||||||||||||||||
Depreciation and amortization expense(4) | 31,153 | 585 | — | 31,738 | ||||||||||||||||||||||
All other segment items(5) | 116,518 | 7,622 | (17,438) | 106,702 | ||||||||||||||||||||||
| Total selling, delivery and administrative expenses | 495,340 | 29,172 | (17,438) | 507,074 | ||||||||||||||||||||||
| Income from operations | $ | 266,107 | $ | 5,232 | $ | — | $ | 271,339 | ||||||||||||||||||
Total depreciation and amortization expense(4) | $ | 52,634 | $ | 5,517 | $ | — | $ | 58,151 | ||||||||||||||||||
| Second Quarter 2025 | ||||||||||||||||||||||||||
| (in thousands) | Nonalcoholic Beverages | All Other | Eliminations(1) | Total | ||||||||||||||||||||||
| Net sales | $ | 1,845,061 | $ | 80,402 | $ | (69,944) | $ | 1,855,519 | ||||||||||||||||||
| Cost of goods sold | 1,121,401 | 44,880 | (53,258) | 1,113,023 | ||||||||||||||||||||||
| Gross profit | 723,660 | 35,522 | (16,686) | 742,496 | ||||||||||||||||||||||
| Selling, delivery and administrative expenses: | ||||||||||||||||||||||||||
Payroll costs(2) | $ | 295,639 | $ | 12,451 | $ | — | $ | 308,090 | ||||||||||||||||||
Fleet costs(3) | 23,262 | 6,690 | — | 29,952 | ||||||||||||||||||||||
Depreciation and amortization expense(4) | 29,128 | 545 | — | 29,673 | ||||||||||||||||||||||
All other segment items(5) | 111,767 | 7,616 | (16,686) | 102,697 | ||||||||||||||||||||||
| Total selling, delivery and administrative expenses | 459,796 | 27,302 | (16,686) | 470,412 | ||||||||||||||||||||||
| Income from operations | $ | 263,864 | $ | 8,220 | $ | — | $ | 272,084 | ||||||||||||||||||
Total depreciation and amortization expense(4) | $ | 49,387 | $ | 5,378 | $ | — | $ | 54,765 | ||||||||||||||||||
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| First Half 2026 | ||||||||||||||||||||||||||
| (in thousands) | Nonalcoholic Beverages | All Other | Eliminations(1) | Total | ||||||||||||||||||||||
| Net sales | $ | 3,872,764 | $ | 181,823 | $ | (155,499) | $ | 3,899,088 | ||||||||||||||||||
| Cost of goods sold | 2,401,711 | 111,392 | (119,508) | 2,393,595 | ||||||||||||||||||||||
| Gross profit | 1,471,053 | 70,431 | (35,991) | 1,505,493 | ||||||||||||||||||||||
| Selling, delivery and administrative expenses: | ||||||||||||||||||||||||||
Payroll costs(2) | $ | 633,446 | $ | 27,458 | $ | — | $ | 660,904 | ||||||||||||||||||
Fleet costs(3) | 41,760 | 16,089 | — | 57,849 | ||||||||||||||||||||||
Depreciation and amortization expense(4) | 61,687 | 1,163 | — | 62,850 | ||||||||||||||||||||||
All other segment items(5) | 236,675 | 14,343 | (35,991) | 215,027 | ||||||||||||||||||||||
| Total selling, delivery and administrative expenses | 973,568 | 59,053 | (35,991) | 996,630 | ||||||||||||||||||||||
| Income from operations | $ | 497,485 | $ | 11,378 | $ | — | $ | 508,863 | ||||||||||||||||||
Total depreciation and amortization expense(4) | $ | 104,224 | $ | 10,829 | $ | — | $ | 115,053 | ||||||||||||||||||
| First Half 2025 | ||||||||||||||||||||||||||
| (in thousands) | Nonalcoholic Beverages | All Other | Eliminations(1) | Total | ||||||||||||||||||||||
| Net sales | $ | 3,414,158 | $ | 155,512 | $ | (134,174) | $ | 3,435,496 | ||||||||||||||||||
| Cost of goods sold | 2,076,336 | 90,173 | (100,613) | 2,065,896 | ||||||||||||||||||||||
| Gross profit | 1,337,822 | 65,339 | (33,561) | 1,369,600 | ||||||||||||||||||||||
| Selling, delivery and administrative expenses: | ||||||||||||||||||||||||||
Payroll costs(2) | $ | 562,318 | $ | 24,477 | $ | — | $ | 586,795 | ||||||||||||||||||
Fleet costs(3) | 47,089 | 14,373 | — | 61,462 | ||||||||||||||||||||||
Depreciation and amortization expense(4) | 57,384 | 1,081 | — | 58,465 | ||||||||||||||||||||||
All other segment items(5) | 219,924 | 14,611 | (33,561) | 200,974 | ||||||||||||||||||||||
| Total selling, delivery and administrative expenses | 886,715 | 54,542 | (33,561) | 907,696 | ||||||||||||||||||||||
| Income from operations | $ | 451,107 | $ | 10,797 | $ | — | $ | 461,904 | ||||||||||||||||||
Total depreciation and amortization expense(4) | $ | 97,437 | $ | 10,701 | $ | — | $ | 108,138 | ||||||||||||||||||
(1)The entire net sales elimination represents net sales from the All Other operating segment to the Nonalcoholic Beverages operating segment. The entire cost of goods sold and SD&A eliminations represent costs incurred by the All Other operating segment in the generation of net sales to the Nonalcoholic Beverages operating segment.
(2)Payroll costs includes compensation, incentive plans, defined contribution plans, healthcare benefits and tax-advantaged spending accounts.
(3)Fleet costs includes fleet repairs, maintenance and fuel and oil costs.
(4)Total depreciation and amortization expense is included within both cost of goods sold and SD&A expenses. For segment reporting, the difference between total depreciation and amortization expense and the portion within SD&A expenses is the amount within cost of goods sold.
(5)All other segment items includes information technology costs, stewardship, insurance and other costs incurred in the selling and delivery of the Company’s products.
Adjusted Results (Non-GAAP)
The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). However, management believes that certain non-GAAP financial measures provide users of the financial statements with additional, meaningful financial information that should be considered, in addition to the measures reported in accordance with GAAP, when assessing the Company’s ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. The Company’s non-GAAP financial information does not represent a comprehensive basis of accounting.
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The following tables reconcile reported results (GAAP) to adjusted results (non-GAAP) for the second quarter of 2026 and the second quarter of 2025:
Second Quarter 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except per share data) | Net sales | Gross profit | SD&A expenses | Income from operations | Income before taxes | Net income | Basic net income per share | |||||||||||||||||||||||||||||||||||||
| Reported results (GAAP) | $ | 2,052,420 | $ | 778,413 | $ | 507,074 | $ | 271,339 | $ | 215,120 | $ | 158,821 | $ | 2.39 | ||||||||||||||||||||||||||||||
Fair value adjustment of acquisition related contingent consideration(1) | — | — | — | — | 24,723 | 18,617 | 0.28 | |||||||||||||||||||||||||||||||||||||
Fair value adjustments for commodity derivative instruments(2) | — | 10,086 | (3,523) | 13,609 | 13,609 | 10,248 | 0.16 | |||||||||||||||||||||||||||||||||||||
| Total reconciling items | — | 10,086 | (3,523) | 13,609 | 38,332 | 28,865 | 0.44 | |||||||||||||||||||||||||||||||||||||
| Adjusted results (non-GAAP) | $ | 2,052,420 | $ | 788,499 | $ | 503,551 | $ | 284,948 | $ | 253,452 | $ | 187,686 | $ | 2.83 | ||||||||||||||||||||||||||||||
Reported margin percentage(3) | 37.9 | % | 13.2 | % | ||||||||||||||||||||||||||||||||||||||||
Adjusted margin percentage(3) | 38.4 | % | 13.9 | % | ||||||||||||||||||||||||||||||||||||||||
Second Quarter 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except per share data) | Net sales | Gross profit | SD&A expenses | Income from operations | Income before taxes | Net income | Basic net income per share | |||||||||||||||||||||||||||||||||||||
| Reported results (GAAP) | $ | 1,855,519 | $ | 742,496 | $ | 470,412 | $ | 272,084 | $ | 252,992 | $ | 187,387 | $ | 2.15 | ||||||||||||||||||||||||||||||
Fair value adjustment of acquisition related contingent consideration(1) | — | — | — | — | 12,390 | 9,275 | 0.11 | |||||||||||||||||||||||||||||||||||||
Fair value adjustments for commodity derivative instruments(2) | — | (1,320) | 689 | (2,009) | (2,009) | (1,511) | (0.02) | |||||||||||||||||||||||||||||||||||||
| Total reconciling items | — | (1,320) | 689 | (2,009) | 10,381 | 7,764 | 0.09 | |||||||||||||||||||||||||||||||||||||
| Adjusted results (non-GAAP) | $ | 1,855,519 | $ | 741,176 | $ | 471,101 | $ | 270,075 | $ | 263,373 | $ | 195,151 | $ | 2.24 | ||||||||||||||||||||||||||||||
Reported margin percentage(3) | 40.0 | % | 14.7 | % | ||||||||||||||||||||||||||||||||||||||||
Adjusted margin percentage(3) | 39.9 | % | 14.6 | % | ||||||||||||||||||||||||||||||||||||||||
Results for the first half of 2026 include six additional days compared to the first half of 2025. For comparison purposes, the estimated impact of the additional selling days in the first half of 2026 has been excluded from our adjusted volume results and adjusted net sales results.
| First Half 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Sparkling | Still | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Volume | 138.0 | 46.7 | 184.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Volume related to extra days in fiscal period | (4.1) | (1.3) | (5.4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted volume | 133.9 | 45.4 | 179.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| First Half 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Sparkling | Still | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Volume | 126.1 | 41.3 | 167.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Reported % Change vs. First Half 2025 | 9.4 | % | 12.9 | % | 10.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted % Change vs. First Half 2025 | 6.2 | % | 9.8 | % | 7.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
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| First Half 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Sparkling | Still | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bottle/can beverage sales | $ | 2,274.1 | $ | 1,303.0 | $ | 3,577.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Bottle/can beverage sales related to extra days in fiscal period | (75.8) | (42.1) | (117.9) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted bottle/can beverage sales | $ | 2,198.3 | $ | 1,260.9 | $ | 3,459.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| First Half 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Sparkling | Still | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bottle/can beverage sales | $ | 2,013.8 | $ | 1,135.2 | $ | 3,149.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Reported % Change vs. First Half 2025 | 12.9 | % | 14.8 | % | 13.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted % Change vs. First Half 2025 | 9.2 | % | 11.1 | % | 9.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
The following tables reconcile reported results (GAAP) to adjusted results (non-GAAP) for the first half of 2026 and the first half of 2025:
| First Half 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except per share data) | Net sales | Gross profit | SD&A expenses | Income from operations | Income before taxes | Net income | Basic net income per share | |||||||||||||||||||||||||||||||||||||
| Reported results (GAAP) | $ | 3,899,088 | $ | 1,505,493 | $ | 996,630 | $ | 508,863 | $ | 366,339 | $ | 270,377 | $ | 4.06 | ||||||||||||||||||||||||||||||
Fair value adjustment of acquisition related contingent consideration(1) | — | — | — | — | 78,114 | 58,820 | 0.88 | |||||||||||||||||||||||||||||||||||||
Fair value adjustments for commodity derivative instruments(2) | — | 7,588 | 6,854 | 734 | 734 | 553 | 0.01 | |||||||||||||||||||||||||||||||||||||
Results of extra days in fiscal period(4) | (132,000) | (55,000) | (25,000) | (30,000) | (30,000) | (22,590) | (0.34) | |||||||||||||||||||||||||||||||||||||
| Total reconciling items | (132,000) | (47,412) | (18,146) | (29,266) | 48,848 | 36,783 | 0.55 | |||||||||||||||||||||||||||||||||||||
| Adjusted results (non-GAAP) | $ | 3,767,088 | $ | 1,458,081 | $ | 978,484 | $ | 479,597 | $ | 415,187 | $ | 307,160 | $ | 4.61 | ||||||||||||||||||||||||||||||
| First Half 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except per share data) | Net sales | Gross profit | SD&A expenses | Income from operations | Income before taxes | Net income | Basic net income per share | |||||||||||||||||||||||||||||||||||||
| Reported results (GAAP) | $ | 3,435,496 | $ | 1,369,600 | $ | 907,696 | $ | 461,904 | $ | 392,465 | $ | 290,998 | $ | 3.34 | ||||||||||||||||||||||||||||||
Fair value adjustment of acquisition related contingent consideration(1) | — | — | — | — | 55,118 | 41,449 | 0.48 | |||||||||||||||||||||||||||||||||||||
Fair value adjustments for commodity derivative instruments(2) | — | (521) | 854 | (1,375) | (1,375) | (1,034) | (0.01) | |||||||||||||||||||||||||||||||||||||
| Total reconciling items | — | (521) | 854 | (1,375) | 53,743 | 40,415 | 0.47 | |||||||||||||||||||||||||||||||||||||
| Adjusted results (non-GAAP) | $ | 3,435,496 | $ | 1,369,079 | $ | 908,550 | $ | 460,529 | $ | 446,208 | $ | 331,413 | $ | 3.81 | ||||||||||||||||||||||||||||||
Following is an explanation of non-GAAP adjustments:
(1)This non-cash, fair value adjustment of acquisition related contingent consideration fluctuates based on factors such as long-term interest rates and future cash flow projections of the distribution territories subject to acquisition related sub-bottling payments.
(2)The Company enters into commodity derivative instruments from time to time to hedge some of its projected purchases of aluminum, as well as some or all of its projected purchases of PET resin, diesel fuel and unleaded gasoline in order to mitigate commodity price risk. The Company accounts for its commodity derivative instruments on a mark-to-market basis.
(3)Reported gross margin and reported operating margin are calculated as gross profit and operating income, respectively, as a percentage of net sales. Adjusted gross margin and adjusted operating margin are calculated as adjusted gross profit and adjusted operating income, respectively, which adjust for the impact of fair value changes to our commodity derivative instruments, as a percentage of net sales.
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(4)Due to the shift in the fiscal calendar, the first half of 2026 contained six extra days when compared to the first half of 2025. The fourth quarter of 2026 will include six fewer days as compared to the fourth quarter of 2025. The full fiscal years of 2026 and 2025 have the same number of days.
Financial Condition
Total assets were $4.43 billion as of July 3, 2026, which was an increase of $129.5 million from December 31, 2025. Net working capital, defined as current assets less current liabilities, was $266.4 million as of July 3, 2026, which was a decrease of $31.6 million from December 31, 2025.
Significant changes in net working capital as of July 3, 2026 as compared to December 31, 2025 were as follows:
•A decrease in cash and cash equivalents of $110.2 million, primarily as a result of the repayment of $275 million on the Five-Year Term Loan Facility (as defined below) and additions to property, plant and equipment of approximately $147 million during the first half of 2026, partially offset by the Company’s strong operating performance.
•An increase in accounts receivable, trade of $123.2 million and an increase in accounts receivable from The Coca-Cola Company of $56.1 million due to strong sales performance and the timing of cash receipts.
•An increase in inventories of $34.8 million, primarily driven by the timing of seasonal inventory levels.
•An increase in accounts payable, trade of $66.0 million and an increase in accounts payable to The Coca-Cola Company of $116.8 million, primarily driven by the timing of cash payments.
•A decrease in accrued compensation of $41.1 million, primarily as a result of the timing of bonus and incentive payments in the first half of 2026.
Liquidity and Capital Resources
The Company’s sources of capital include cash flows from operations, available credit facilities and the issuance of debt and equity securities. As of July 3, 2026, the Company had $171.7 million in cash and cash equivalents. The Company’s cash equivalent balance as of July 3, 2026 consisted predominantly of investments in money market funds. As of July 3, 2026, the Company did not have any short-term investments. Historically, short-term investments have consisted primarily of U.S. Treasury securities and investment-grade corporate bonds with maturities of one year or less. The Company has obtained its debt from public markets, private placements and bank facilities. Management believes the Company has sufficient sources of capital available to finance its business plan, to meet its working capital requirements and to maintain an appropriate level of capital spending for at least the next 12 months from the issuance of the condensed consolidated financial statements.
On November 7, 2025, the Company entered into a purchase agreement (the “Repurchase Agreement”) with Carolina Coca-Cola Bottling Investments, Inc. (the “Seller”), an indirect wholly owned subsidiary of The Coca‑Cola Company, The Coca‑Cola Company and J. Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, pursuant to which the Company agreed to purchase and the Seller agreed to sell all of the Seller’s shares of Common Stock for a cash payment in the aggregate amount of $2.40 billion (the “Repurchase”). The closing of the Repurchase also occurred on November 7, 2025. The Company funded the purchase price for the Repurchase with cash on hand and a term loan obtained under a certain bridge loan agreement (the “Bridge Facility”), as further discussed below.
Upon completion of the Repurchase, the 18,835,460 shares of Common Stock repurchased from the Seller were retired and recorded as a reduction to Common Stock at par value, with the excess of carrying value over par value recorded as a deduction from retained (deficit) earnings. As a result, the Company was in a deficit position as of July 3, 2026. This deficit position does not impact the Company’s ability to pay dividends.
On March 4, 2025, the Company announced that its Board of Directors had approved a 10-for-1 forward stock split (the “Stock Split”) of Common Stock and its Class B Common Stock, par value $1.00 per share (“Class B Common Stock”). The Stock Split was effected through an amendment to the Company’s Restated Certificate of Incorporation (the “Amendment”). The Amendment also effected a proportionate increase in the number of authorized shares of Common Stock and Class B Common Stock. The Amendment obtained stockholder approval at the Company’s 2025 Annual Meeting of Stockholders, which took place on May 13, 2025. Each stockholder of record as of the close of business on May 16, 2025 received nine additional shares for each share of Common Stock or Class B Common Stock held as of such date reflected in the stockholder’s account on May 23, 2025. Trading began on a split-adjusted basis on May 27, 2025. The par value per share of Common Stock and Class B Common Stock remains unchanged.
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On August 20, 2024, the Company announced that its Board of Directors had approved a share repurchase program (the “Share Repurchase Program”) under which the Company was initially authorized to repurchase up to $1.00 billion of Common Stock. On November 7, 2025, the Company’s Board of Directors reduced the total authorization under the Share Repurchase Program from $1.00 billion to $400.0 million. The Company expects share repurchases to be made from time to time in the open market or through private transactions or block trades. The timing and amount of repurchases will depend on market conditions, the prevailing market price, applicable legal requirements and other factors. The share repurchase authorization is discretionary and has no expiration date. During the second quarter of 2026, the Company did not repurchase any shares of Common Stock under the Share Repurchase Program. As of July 3, 2026, the total remaining authorization under the Share Repurchase Program was $136.3 million.
The Company’s debt as of July 3, 2026 and December 31, 2025 was as follows:
| (in thousands) | Maturity Date | July 3, 2026 | December 31, 2025 | |||||||||||||||||
Senior notes(1) | 10/10/2026 | $ | 100,000 | $ | 100,000 | |||||||||||||||
Term loan facility (the “Three-Year Term Loan Facility”)(2) | 12/8/2028 | 900,000 | 900,000 | |||||||||||||||||
Senior bonds (the “2029 Senior Bonds”)(3) | 6/1/2029 | 700,000 | 700,000 | |||||||||||||||||
Revolving credit facility(4) | 6/10/2029 | — | — | |||||||||||||||||
| Senior notes | 3/21/2030 | 150,000 | 150,000 | |||||||||||||||||
Term loan facility (the “Five-Year Term Loan Facility”)(2) | 12/6/2030 | 175,000 | 450,000 | |||||||||||||||||
Senior bonds (the “2034 Senior Bonds”)(5) | 6/1/2034 | 500,000 | 500,000 | |||||||||||||||||
Unamortized discount on senior bonds(3)(5) | Various | (1,065) | (1,201) | |||||||||||||||||
| Debt issuance costs | (10,823) | (12,790) | ||||||||||||||||||
| Total debt | 2,513,112 | 2,786,009 | ||||||||||||||||||
Less: Current portion of debt(1) | 100,000 | 100,000 | ||||||||||||||||||
| Total long-term debt | $ | 2,413,112 | $ | 2,686,009 | ||||||||||||||||
(1)As of July 3, 2026 and December 31, 2025, the senior notes maturing in 2026 were classified as current portion of debt in the condensed consolidated balance sheets.
(2)The Term Loan Facilities (as defined below) were issued in connection with the financing of the Repurchase, as further discussed above.
(3)The 2029 Senior Bonds were issued at 99.843% of par.
(4)The Company’s revolving credit facility has an aggregate maximum borrowing capacity of $500 million. The Company currently believes all banks participating in the revolving credit facility have the ability to and will meet any funding requests from the Company.
(5)The 2034 Senior Bonds were issued at 99.893% of par.
The Company entered into the Bridge Facility, dated as of November 7, 2025, providing for a 364-day senior unsecured bridge term loan facility in the aggregate principal amount of $1.20 billion to fund the Repurchase. Also on November 7, 2025, the Company borrowed $1.20 billion under the Bridge Facility, the full amount available under the Bridge Facility.
On December 8, 2025, the Company entered into a term loan agreement, providing for (i) the Three-Year Term Loan Facility, a senior unsecured term loan facility in the aggregate principal amount of up to $900 million, maturing on December 8, 2028 and (ii) the Five-Year Term Loan Facility, a senior unsecured term loan facility in the aggregate principal amount of up to $450 million, maturing on December 6, 2030 (collectively, the “Term Loan Facilities”). Also on December 8, 2025, the Company borrowed $1.35 billion under the Term Loan Facilities, the full amount available under the Term Loan Facilities. In conjunction with the borrowings under the Term Loan Facilities, the Company modified and extinguished the Bridge Facility discussed above, fully repaying the $1.20 billion outstanding under the Bridge Facility through a net cash settlement with the lender. As of July 3, 2026, the Company has repaid $275 million of the $450 million aggregate principal balance outstanding under the Five-Year Term Loan Facility using cash on hand, bringing the aggregate principal balance outstanding to $175 million.
The indenture under which the 2029 Senior Bonds and the 2034 Senior Bonds were issued does not include financial covenants, but does limit the incurrence of certain liens and encumbrances as well as indebtedness by the Company’s subsidiaries in excess of certain amounts. The agreements under which the Company’s nonpublic debt, including its revolving credit facility and the Term Loan Facilities, was issued include two financial covenants: a consolidated cash flow/fixed charges ratio and a consolidated funded indebtedness/cash flow ratio (each as defined in the respective agreement). The Company was in compliance with these covenants as of July 3, 2026. These covenants have not restricted the Company’s liquidity or capital resources.
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On February 12, 2026, the Company entered into three $150 million fixed rate swap agreements, maturing on February 8, 2027, August 8, 2027 and February 8, 2028 to hedge a portion of the interest rate risk on the Three-Year Term Loan Facility and the Five-Year Term Loan Facility. Over the next 12 months, the Company expects approximately $2 million related to these interest rate swaps to be released from accumulated other comprehensive loss. These interest rate swaps are designated as cash flow hedging instruments and changes in their fair values are not expected to be material to the condensed consolidated balance sheets. Changes in the fair values of these interest rate swaps were classified as accumulated other comprehensive loss on the condensed consolidated balance sheets and included in the condensed consolidated statements of comprehensive income.
All outstanding debt has been issued by the Company and none has been issued by any of its subsidiaries. There are no guarantees of the Company’s debt.
The Company’s credit ratings are reviewed periodically by certain nationally recognized rating agencies. Changes in the Company’s operating results or financial position could result in changes in the Company’s credit ratings. Lower credit ratings could result in higher borrowing costs for the Company or reduced access to capital markets, which could have a material adverse impact on the Company’s operating results or financial position. As of July 3, 2026, the Company’s credit ratings and outlook for its debt were as follows:
| Credit Rating | Rating Outlook | |||||||||||||
| Moody’s | Baa1 | Stable | ||||||||||||
| Standard & Poor’s | BBB+ | Negative | ||||||||||||
The Company’s Board of Directors has declared, and the Company has paid, dividends on the Common Stock and the Class B Common Stock and each class of common stock has participated equally in all dividends declared by the Board of Directors and paid by the Company for more than 30 years. The amount and frequency of future dividends will be determined by the Company’s Board of Directors in light of the earnings and financial condition of the Company at such time, and no assurance can be given that dividends will be declared or paid in the future.
We review supplier terms and conditions on an ongoing basis, and we have negotiated payment term extensions in recent years in connection with our efforts to improve cash flow and working capital. Separate from those term extension actions, the Company has an agreement with a third-party financial institution to facilitate a supply chain finance program (the “SCF program”), which allows qualifying suppliers to sell their receivables from the Company to the financial institution in order to negotiate shorter payment terms on their outstanding receivable arrangements. The Company’s obligations to its suppliers, including amounts due and scheduled payment terms, are not impacted by a supplier’s participation in the SCF program. See Note 12 to the condensed consolidated financial statements for additional information related to the SCF program.
The Company’s only Level 3 asset or liability is the acquisition related contingent consideration liability. There were no transfers of assets or liabilities from Level 1 or Level 2 in any period presented. Fair value adjustments were non-cash and, therefore, did not impact the Company’s liquidity or capital resources. Following is a summary of the Level 3 activity:
| Second Quarter | ||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||||||||||||||
| Beginning balance - Level 3 liability | $ | 753,029 | $ | 681,800 | ||||||||||||||||||||||
| Payments of acquisition related contingent consideration | (18,056) | (15,390) | ||||||||||||||||||||||||
| Reclassification to current payables | 700 | (3,500) | ||||||||||||||||||||||||
| Increase in fair value | 24,723 | 12,390 | ||||||||||||||||||||||||
| Ending balance - Level 3 liability | $ | 760,396 | $ | 675,300 | ||||||||||||||||||||||
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Cash Sources and Uses
A summary of cash-based activity is as follows:
| First Half | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Cash Sources: | ||||||||||||||
Net cash provided by operating activities(1) | $ | 420,647 | $ | 406,221 | ||||||||||
| Proceeds from the sale of property, plant and equipment | 334 | 6,277 | ||||||||||||
| Proceeds from the disposal of short-term investments | — | 224,485 | ||||||||||||
| Total cash sources | $ | 420,981 | $ | 636,983 | ||||||||||
| Cash Uses: | ||||||||||||||
| Payments on term loan facility | $ | 275,000 | $ | — | ||||||||||
| Additions to property, plant and equipment | 147,354 | 157,383 | ||||||||||||
| Payments of acquisition related contingent consideration | 37,126 | 35,209 | ||||||||||||
| Cash dividends paid | 33,282 | 43,589 | ||||||||||||
| Investment in equity method investees | 9,927 | 10,594 | ||||||||||||
| Payments on financing lease obligations | 275 | 1,320 | ||||||||||||
| Debt issuance fees | 276 | 233 | ||||||||||||
| Purchases of short-term investments | — | 270,144 | ||||||||||||
| Payments related to share repurchases | 27,972 | 34,410 | ||||||||||||
| Total cash uses | $ | 531,212 | $ | 552,882 | ||||||||||
| Net (decrease) increase in cash and cash equivalents during period | $ | (110,231) | $ | 84,101 | ||||||||||
(1)Net cash provided by operating activities in the first half of 2026 included net income tax payments of $89.5 million and net interest payments of $66.1 million. Net cash provided by operating activities in the first half of 2025 included net income tax payments of $111.3 million and net interest payments of $43.7 million.
Cash Flows from Operating Activities
During the first half of 2026, cash provided by operating activities was $420.6 million, which was an increase of $14.4 million as compared to the first half of 2025.
Cash Flows from Investing Activities
During the first half of 2026, cash used in investing activities was $156.9 million, which was a decrease of $50.4 million as compared to the first half of 2025. The decline in cash used in investing activities was primarily a result of the net outflow related to purchases and disposals of short-term investments of $45.7 million in the first half of 2025, as compared to no activity in the first half of 2026.
Additions to property, plant and equipment were $147.4 million during the first half of 2026 and $157.4 million during the first half of 2025. There were $27.4 million and $34.8 million of additions to property, plant and equipment accrued in accounts payable, trade as of July 3, 2026 and June 27, 2025, respectively.
The additions to property, plant and equipment reflect the Company’s focus on optimizing its supply chain and investing for future growth. The Company anticipates additions to property, plant and equipment in 2026 will be approximately $300 million.
Cash Flows from Financing Activities
During the first half of 2026, cash used in financing activities was $373.9 million, which was an increase of $259 million as compared to the first half of 2025. The increase in cash used in financing activities was primarily driven by the repayment of $275 million of the $450 million aggregate principal balance outstanding under the Five-Year Term Loan Facility during the first half of 2026.
The Company had cash payments for acquisition related contingent consideration of $37.1 million during the first half of 2026 and $35.2 million during the first half of 2025. For 2026, the Company estimates the annual sub-bottling payments will be in the
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range of approximately $70 million to $80 million. For the next five future years (beginning with fiscal year 2027), the Company anticipates that the amount it could pay annually will be in the range of approximately $50 million to $70 million.
Commodity Hedging Activities
The Company uses commodity derivative instruments, where practicable, to manage its exposure to fluctuations in certain commodity prices. Fees paid by the Company for commodity derivative instruments are amortized over the corresponding period of each instrument. The Company accounts for its commodity derivative instruments on a mark-to-market basis with any expense or income being reflected as an adjustment to cost of sales or SD&A expenses, consistent with the expense classification of the underlying hedged item.
The Company uses several different financial institutions for commodity derivative instruments to minimize the concentration of credit risk. The Company has master agreements with the counterparties to its commodity derivative instruments that provide for net settlement of derivative transactions. The net impact of the commodity derivative instruments on the condensed consolidated statements of operations was as follows:
| Second Quarter | First Half | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Increase (decrease) in cost of sales | $ | 6,447 | $ | (565) | $ | 2,135 | $ | 428 | ||||||||||||||||||
| Increase (decrease) in SD&A expenses | 5 | (330) | (11,948) | (263) | ||||||||||||||||||||||
| Net impact | $ | 6,452 | $ | (895) | $ | (9,813) | $ | 165 | ||||||||||||||||||
Cautionary Note Regarding Forward-Looking Statements
Certain statements made in this report, or in other public filings, press releases, or other written or oral communications made by the Company, which are not historical facts, are forward-looking statements subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties which we expect will or may occur in the future and may impact our business, financial condition and results of operations. The words “anticipate,” “believe,” “expect,” “intend,” “project,” “may,” “will,” “should,” “could” and similar expressions are intended to identify those forward-looking statements. These forward-looking statements reflect the Company’s best judgment based on current information, and, although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the projected results and expectations discussed in this report. Factors that might cause the Company’s actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: increased costs (including due to inflation or uncertainty around tariffs) or disruption, unavailability or shortages of raw materials, fuel and other supplies; the reliance on purchased finished products from external sources; changes in public and consumer perception and preferences, including concerns related to product safety and sustainability, artificial ingredients, brand reputation and obesity; changes in government regulations related to nonalcoholic beverages, including regulations related to obesity, public health, artificial ingredients, recycling, sustainability, product safety and benefit programs, including SNAP; decreases from historic levels of marketing funding support provided to us by The Coca‑Cola Company and other beverage companies; material changes in the performance requirements for marketing funding support or our inability to meet such requirements; decreases from historic levels of advertising, marketing and product innovation spending by The Coca‑Cola Company and other beverage companies, or advertising campaigns that are negatively perceived by the public; any failure of the several Coca‑Cola system governance entities of which we are a participant to function efficiently or in our best interest and any failure or delay of ours to receive anticipated benefits from these governance entities; provisions in our beverage distribution and manufacturing agreements with The Coca‑Cola Company that could delay or prevent a change in control of us or a sale of our Coca‑Cola distribution or manufacturing businesses; the concentration of our capital stock ownership; our inability to meet requirements under our beverage distribution and manufacturing agreements; changes in the inputs used to calculate our acquisition related contingent consideration liability; technology failures or cyberattacks on our information technology systems or our effective response to technology failures or cyberattacks on our third-party service providers’, business partners’, customers’, suppliers’ or other third parties’ information technology systems; unfavorable changes in the general economy; changes in trade policies, including the imposition of, or increase in, tariffs on imported goods; the concentration risks among our customers and suppliers; lower than expected net pricing of our products resulting from continued and increased customer and competitor consolidations and marketplace competition; the effect of changes in our level of debt, borrowing costs and credit ratings on our access to capital and credit markets, operating flexibility and ability to obtain additional financing to fund future needs; the failure to attract, train and retain qualified employees while controlling labor costs and other labor issues; the failure to maintain productive relationships with our employees covered by collective bargaining agreements, including failing to renegotiate collective bargaining agreements; changes in accounting standards; our use of estimates and assumptions; changes in tax laws, disagreements with tax authorities or additional tax liabilities; changes in legal contingencies; natural disasters, changing weather patterns and unfavorable weather, or the increased frequency of any such events due to
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climate change, and public expectations around combatting climate change or legislative or regulatory responses to such change; and the risks discussed in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for 2025 and elsewhere in this report.
Caution should be taken not to place undue reliance on the forward-looking statements included in this report. The Company assumes no obligation to update any forward-looking statements, except as may be required by law. In evaluating forward-looking statements, these risks and uncertainties should be considered, together with the other risks described from time to time in the Company’s reports and other filings with the United States Securities and Exchange Commission.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company is subject to interest rate volatility with regard to existing issuances of debt, including its revolving credit facility and the Term Loan Facilities. The Company had outstanding borrowings under the Term Loan Facilities as of July 3, 2026 totaling $1.08 billion. Based on the Company’s variable rate debt and fixed rate interest rate swaps outstanding as of July 3, 2026, we estimate a 1% increase in interest rates would increase annual interest expense by $6.9 million. As of December 31, 2025, the Company had outstanding borrowings under the Term Loan Facilities totaling $1.35 billion and estimated a 1% increase in interest rates would increase annual interest expense by $13.5 million.
The Company’s acquisition related contingent consideration liability, which is adjusted to fair value each reporting period, is also impacted by changes in interest rates. The risk-free interest rate used to estimate the Company’s WACC is a component of the discount rate used to calculate the present value of future expected acquisition related sub-bottling payments due under the Company’s comprehensive beverage agreements. As a result, any changes in the underlying risk-free interest rate could result in material changes to the fair value of the acquisition related contingent consideration liability and could materially impact the amount of non-cash expense (or income) recorded each reporting period. The Company estimates a 10-basis point change in the underlying risk-free interest rate used to estimate the Company’s WACC would result in a change of approximately $7 million to the Company’s acquisition related contingent consideration liability.
The Company is exposed to certain market risks and commodity price risk that arise in the ordinary course of business. The Company may enter into commodity derivative instruments to manage or reduce market risk. The Company does not use commodity derivative instruments for trading or speculative purposes.
The Company is also subject to commodity price risk arising from price movements for certain commodities included as part of its input costs, which predominately relate to our Sparkling products. The Company estimates a 10% increase in the market prices of its key commodities, including aluminum, PET resin and high-fructose corn syrup, and excluding concentrate, over the current market prices would cumulatively increase costs during the next 12 months by approximately $35 million to $45 million assuming no change in volume.
The Company manages its commodity price risk in some cases by entering into contracts with adjustable prices to hedge commodity purchases, including portions of our aluminum input costs and fuel expenses related to our selling and distribution activities. The Company periodically uses commodity derivative instruments in the management of this risk, and estimates a 10% decrease in the underlying commodity prices would have decreased the fair value of our commodity derivative instruments by approximately $18 million as of July 3, 2026.
Fees paid by the Company for agreements to hedge commodity purchases are amortized over the corresponding period of each agreement. The Company accounts for its commodity derivative instruments on a mark-to-market basis with any expense or income being reflected as an adjustment to cost of sales or SD&A expenses, consistent with the expense classification of the underlying hedged item.
The rate of inflation in the United States, as measured by year-over-year changes in the Consumer Price Index, was 3.5% in June 2026, as compared to 2.7% in December 2025 and 2.9% in December 2024. Inflation in the prices of those commodities important to the Company’s business is reflected in changes in the Consumer Price Index.
The principal effect of inflation in both commodity and consumer prices on the Company’s operating results is to increase both cost of goods sold and SD&A expenses. Although the Company can offset these cost increases by increasing selling prices for its products, consumers may not have the buying power to cover these increased costs and may reduce their volume of purchases of those products. In that event, selling price increases may not be sufficient to offset completely the Company’s cost increases.
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Item 4. Controls and Procedures.
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) pursuant to Rule 13a-15(b) of the Exchange Act. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of July 3, 2026.
There has been no change in the Company’s internal control over financial reporting during the quarter ended July 3, 2026 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is involved in various claims and legal proceedings which have arisen in the ordinary course of its business. Although it is difficult to predict the ultimate outcome of these claims and legal proceedings, management believes the ultimate disposition of these matters will not have a material adverse effect on the financial condition, results of operations or cash flows of the Company. No material amount of loss in excess of recorded amounts is believed to be reasonably possible as a result of these claims and legal proceedings.
Item 1A. Risk Factors.
There have been no material changes in the Company’s risk factors from those disclosed in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10‑K for 2025.
Item 5. Other Information.
Insider Trading Arrangements
During the quarter ended July 3, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted terminated
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Item 6. Exhibits.
Exhibit No. | Description | Incorporated by Reference or Filed/Furnished Herewith | ||||||||||||
| 3.1 | Restated Certificate of Incorporation of the Company. | Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2017 (File No. 0-9286). | ||||||||||||
| 3.2 | Certificate of Amendment to Restated Certificate of Incorporation of the Company. | Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 2, 2019 (File No. 0-9286). | ||||||||||||
| 3.3 | Certificate of Amendment to Restated Certificate of Incorporation of the Company. | Exhibit 3.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (File No. 0-9286). | ||||||||||||
| 3.4 | Certificate of Amendment to Restated Certificate of Incorporation of the Company. | Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 16, 2025 (File No. 0-9286). | ||||||||||||
| 3.5 | Amended and Restated By-laws of the Company. | Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on January 2, 2019 (File No. 0-9286). | ||||||||||||
| 31.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith. | ||||||||||||
| 31.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith. | ||||||||||||
| 32 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Furnished herewith. | ||||||||||||
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | Filed herewith. | ||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | Filed herewith. | ||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | Filed herewith. | ||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | Filed herewith. | ||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | Filed herewith. | ||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | Filed herewith. | ||||||||||||
| 104 | Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | Filed herewith. | ||||||||||||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| COCA-COLA CONSOLIDATED, INC. (REGISTRANT) | ||||||||
| Date: August 5, 2026 | By: | /s/ Matthew J. Blickley | ||||||
| Matthew J. Blickley Chief Financial Officer and Chief Accounting Officer | ||||||||
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