Breaking Down Coca-Cola Consolidated, Inc. (COKE) Financial Health: Key Insights for Investors

You've seen Coca-Cola Consolidated, Inc. (COKE) continue its strong operational run, but honestly, the financial picture right now is a little more complex than just strong sales growth. The bottler delivered a net income of $103.6 million in Q1 2025, which is solid, but it was a notable drop from the prior year, partly due to two fewer selling days and a shift in the Easter holiday. The real question for investors isn't about the top line, which S&P Global forecasts will see continued low-single-digit percentage revenue growth; it's about the balance sheet. Here's the quick math: the company's recent $2.4 billion share repurchase pushed its pro forma leverage to 2.6x, exceeding the 2x threshold S&P prefers, which is why they revised the outlook to negative in November 2025. Still, with annual free operating cash flow projected to be more than $450 million, the company has the firepower to reduce that debt over time, but that leverage is defintely the near-term risk to watch. We need to break down how management plans to navigate that debt load while still maintaining an EBITDA margin near 16%.

Revenue Analysis

You need to know where the money is coming from before you can judge Coca-Cola Consolidated, Inc.'s (COKE) stability. The core takeaway for 2025 is that the company shows steady top-line growth, with trailing twelve-month (TTM) revenue ending September 30, 2025, hitting $7.070 billion. That's a solid 4.22% increase year-over-year, which tells you their pricing power and strategic execution are working, even in a tough consumer environment. Pricing is defintely the key driver here.

This growth rate is a little slower than the 7.3% jump we saw in 2023, but it's still healthy and beats the 3.69% growth from 2024. The company's revenue streams are straightforward: they operate as the largest Coca-Cola bottler in the U.S., meaning they manufacture, sell, and distribute beverages from The Coca-Cola Company and other partner brands across 14 states and the District of Columbia. Their revenue is almost entirely derived from the sale of these finished beverages to retailers and other customers.

Looking at the first quarter of 2025 gives us a clear look at the product mix and near-term risks. While net sales saw a slight dip of 0.7% to $1.580 billion year-over-year, that figure comes with a big asterisk. The quarter had two fewer selling days, which alone accounted for an estimated $40 million hit to net sales, or about 2.5% of the change. That's a calendar issue, not a demand collapse.

Here's the quick math on the Q1 2025 primary revenue sources, which shows the dominance of carbonated soft drinks (CSDs) versus non-carbonated or 'Still' beverages (like water, juices, and teas):

The remaining roughly 8.7% of revenue comes from other sales and services. What this breakdown shows is that CSDs, or 'Sparkling' beverages, are still the engine, pulling in nearly 60% of the revenue. Still beverages are important, but they typically carry lower gross margins, and a slight product mix shift toward them in Q1 contributed to a gross margin contraction of 50 basis points to 39.7%.

The significant change you need to track is the volume decline. Q1 2025 volume dropped 6.6%. This wasn't just the fewer selling days; a strategic shift to a non-Direct Store Delivery (DSD) method for casepack Dasani water at Walmart cut reported volume by 1.3%. This change is structural, not a sign of consumer rejection, but it does impact the reported case volume numbers. On the flip side, the company noted that zero-sugar offerings and enhanced water products are showing growth, which is a positive sign for adapting to consumer health trends. You can dive deeper into the market dynamics in Exploring Coca-Cola Consolidated, Inc. (COKE) Investor Profile: Who's Buying and Why?

• Watch for Q2 and Q3 results to see if the TTM growth rate accelerates.
• Monitor the Sparkling vs. Still mix; a sustained shift to Still will pressure margins.
• Expect volume reports to be noisy due to the Dasani distribution change.

Profitability Metrics

You need to know if Coca-Cola Consolidated, Inc. (COKE) is making money efficiently, especially in the capital-intensive bottling business. The direct takeaway from the first nine months of fiscal 2025 is that the company is maintaining a healthy gross margin but is fighting a tight operational battle, evidenced by an 8.14% net profit margin.

The company's profitability is typical for a franchised bottler: high sales volume but lower margins compared to The Coca-Cola Company (KO), which is the asset-light concentrate producer. For the first nine months of 2025, Coca-Cola Consolidated, Inc. generated $5,323.8 million in net sales.

Gross, Operating, and Net Margins: The 2025 Snapshot

Your analysis starts with the three key margins-Gross, Operating, and Net-which tell the story of cost control at different levels. The Gross Profit Margin shows pricing power and cost of goods sold (COGS) management, while the Operating Margin reveals efficiency in the core business before debt and taxes.

• Gross Profit Margin: The margin stood at 39.8% for the first nine months of 2025, translating to a gross profit of $2,118.1 million. This is a strong figure for a distributor, reflecting effective pricing strategies and a favorable product mix.
• Operating Profit Margin: This margin was 13.3%, with Income from Operations totaling $708.5 million. This is where the cost of running a massive distribution network (Selling, Delivery, and Administrative expenses or SD&A) is managed.
• Net Profit Margin: The final margin, Net Income divided by Net Sales, was 8.14%. This is the bottom line, representing $433.3 million in profit after all expenses, including interest and taxes.

Here's the quick math: For every dollar of sales, about 40 cents is left after paying for the product, but only about 8 cents is left as pure profit. That's the reality of bottling.

Operational Efficiency and Profitability Trends

The trend over 2025 shows a recovery and stabilization after a softer start. First quarter 2025 results were lower year-over-year, with the Gross Margin dipping to 39.7% and the Operating Margin falling to 12.0% due in part to two fewer selling days and a product mix shift toward lower-margin still beverages. However, the second and third quarters saw a rebound, with Q2 Gross Margin hitting 40.0% and Q2 Operating Margin reaching 14.7%. This suggests that management is defintely executing well on cost control and pricing power as the year progresses.

The biggest operational risk is the Selling, Delivery, and Administrative (SD&A) expense line, which is the core cost of the direct store delivery (DSD) model. Increases in labor costs and inflationary pressures across expense categories were noted in the first quarter of 2025, which is a constant battle in this segment. The operational efficiency comes down to optimizing those truck fleets and warehouse logistics.

Industry Comparison: Bottler vs. Concentrate Producer

To understand Coca-Cola Consolidated, Inc.'s margins, you must differentiate the bottling business from the concentrate business. The Coca-Cola Company (KO), the franchisor, operates the asset-light model, focusing on brand and concentrate sales. Their Q3 2025 Operating Margin was a massive 32.0%. Coca-Cola Consolidated, Inc.'s 13.3% Operating Margin is much lower because it bears the capital-intensive costs of manufacturing, packaging, and distribution.

This 13.3% operating margin is a solid performance for the bottling segment. For context, PepsiCo (PEP), which has a hybrid model that includes snacks and some retained bottling, reported an Operating Margin of 13.2% in late 2025. This shows that Coca-Cola Consolidated, Inc. is operating at a comparable level of efficiency to its largest, most diversified peer's overall business, despite the industry trend of 'narrow profit margins' in the general non-alcoholic beverage market.

For a deeper dive into the company's financial structure, check out our full report on Breaking Down Coca-Cola Consolidated, Inc. (COKE) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

When you look at Coca-Cola Consolidated, Inc. (COKE), you're really asking how the company funds its massive operation-is it mostly through borrowing (debt) or through shareholder money (equity)? For a bottling and distribution giant, the balance is defintely crucial. As of September 2025, the picture shows a recent, intentional shift toward higher leverage.

The company's total debt sits around $1.916 billion, broken down into two main parts. Long-term debt and capital lease obligations accounted for approximately $1.541 billion, while short-term debt and current capital lease obligations were about $375 million. This debt structure is manageable, especially when you consider the predictable cash flow from their core business.

Here's the quick math on their financing mix:

• Total Debt (Sep. 2025): $1.916 billion
• Total Stockholders' Equity (Sep. 2025): $1.636 billion
• Debt-to-Equity (D/E) Ratio: 1.17

A Debt-to-Equity (D/E) ratio of 1.17 means the company is using about $1.17 of debt for every dollar of shareholder equity to finance its assets. To be fair, this is a significant jump from their historical lower leverage. For context, the industry average D/E ratio for similar companies has often been closer to 0.74, so COKE is now running with notably more leverage.

The major catalyst for this change was a strategic decision in November 2025. Coca-Cola Consolidated, Inc. announced a significant move to repurchase all outstanding shares of its common stock owned by a Coca-Cola subsidiary. This $2.4 billion purchase was funded with a combination of cash and new debt, dramatically increasing their leverage profile. This is a clear example of balancing debt financing and equity funding, where debt was used to consolidate ownership and potentially boost earnings per share for remaining shareholders.

This debt-funded share repurchase immediately impacted the company's credit profile. S&P Global Ratings affirmed the company's investment-grade 'BBB+' issuer credit rating but revised the outlook from stable to negative on November 14, 2025. The new pro forma debt-to-EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is now estimated at 2.6x, which is above the rating agency's threshold for the current rating. The rating affirmation still signals confidence in the company's ability to generate cash and pay down the debt, but the negative outlook reflects the risk that they might not reduce leverage below 2.0x by fiscal year-end 2027 as expected.

The company also manages routine debt obligations, like a $350 million bond issuance with a 3.80% coupon that is set to mature on November 25, 2025. This near-term maturity will require a refinancing decision or principal payment, a standard item on the finance team's calendar.

Here is a snapshot of the key financial metrics related to their capital structure for a clearer comparison:

The core action for you as an investor is to monitor their deleveraging plan over the next two years. If you want to dive deeper into who is holding the stock and why, you should check out Exploring Coca-Cola Consolidated, Inc. (COKE) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

When you're evaluating a company like Coca-Cola Consolidated, Inc. (COKE), the first thing we look at is its ability to cover near-term bills-what we call liquidity. This is the financial bedrock, and honestly, COKE's position is defintely strong. The key is in the ratios, which tell us how quickly they can turn assets into cash to pay off liabilities.

As of September 2025, Coca-Cola Consolidated, Inc.'s Current Ratio stood at a robust 2.04. This means the company has over two dollars in current assets (cash, receivables, inventory) for every dollar of current liabilities (bills due within a year). A ratio of 2.0 or higher is excellent, showing a significant buffer against short-term operational hiccups. For a non-alcoholic beverage bottler, this is a sign of great operational efficiency and inventory management.

The Quick Ratio, or acid-test ratio, is even more telling because it strips out inventory-the least liquid current asset-from the calculation. Coca-Cola Consolidated, Inc.'s Quick Ratio is also very healthy at 1.78 as of November 2025. This high figure confirms that even without selling a single bottle of product currently in stock, the company can cover nearly all its immediate obligations with just cash and receivables. This is a clear strength.

Here's the quick math on their core liquidity metrics:

• Current Ratio (Sep 2025): 2.04.
• Quick Ratio (Nov 2025): 1.78.
• Working Capital: $1.23 Billion.

Working Capital and Cash Flow Trends

The Working Capital-Current Assets minus Current Liabilities-was reported at $1.23 Billion. A positive and substantial working capital like this indicates the company has ample capital to fund its daily operations and invest in growth without straining its finances. It's a sign of a well-oiled machine, especially when you consider their Mission Statement, Vision, & Core Values of Coca-Cola Consolidated, Inc. (COKE). which emphasizes operational excellence.

Looking at the Cash Flow Statement for the first quarter of 2025 (Q1 2025) gives us a dynamic view of this liquidity. Cash flow from operations (CFO) was $198.2 million, a slight increase from $194.3 million in Q1 2024. Strong, positive operating cash flow is the best source of liquidity, showing that core business activities are generating more than enough cash to sustain themselves.

The Investing and Financing sections also look manageable. In Q1 2025, Coca-Cola Consolidated, Inc. invested approximately $98 million in capital expenditures (CapEx) to optimize its supply chain and drive future growth. For the full fiscal year 2025, they expect CapEx to be around $300 million. This level of investment is healthy, showing they are putting cash to work. On the financing side, they had around $1.2 Billion in cash and equivalents as of early 2025, and their debt-to-equity ratio is low at 0.88, indicating manageable leverage.

The following table summarizes the key liquidity ratios and their implications:

The takeaway here is clear: Coca-Cola Consolidated, Inc. has a fortress-like liquidity position. There are no near-term liquidity concerns. The company is generating solid cash from its operations and has the balance sheet capacity to fund its expected $300 million in capital expenditures for 2025 without stress.

Next step: Portfolio Manager: Model a sensitivity analysis on the 2025 CapEx plan to see the impact of a 10% increase on Free Cash Flow by end of Q4.

Valuation Analysis

You're looking at Coca-Cola Consolidated, Inc. (COKE) and asking the right question: is this stock priced fairly, or is the market getting ahead of itself? The short answer is that, based on traditional metrics, the stock appears to be trading at a premium, especially when you compare its current price to the average analyst target.

As of November 2025, Coca-Cola Consolidated, Inc. (COKE) has been on a tear, with the stock price climbing roughly 31.29% over the last 12 months, hitting recent highs around $161.84 a share. This strong momentum signals market confidence, but it also pushes the valuation multiples into a higher range, which demands a closer look at the fundamentals.

Is Coca-Cola Consolidated, Inc. (COKE) Overvalued or Undervalued?

When we break down the valuation using the core multiples, we see a picture of a high-quality asset priced for continued execution. The Price-to-Earnings (P/E) ratio, which tells you how much investors are willing to pay for every dollar of earnings, stands at about 23.05 based on trailing twelve months (TTM) data through September 2025. This is a notable step up from its historical three-year average of 16.75, suggesting investors are baking in significant future growth or margin stability.

The Enterprise Value-to-EBITDA (EV/EBITDA) ratio, which is better for comparing companies with different debt levels, is around 11.31 as of October 27, 2025 (TTM June 2025). This is slightly above the historical median of 10.86, indicating the enterprise value (market cap plus net debt) is elevated relative to its core operating cash flow proxy (EBITDA). Honestly, this valuation implies the market sees the company's bottling operations as a stable, defensive business worth paying up for.

The Price-to-Book (P/B) ratio is also high at approximately 7.01 (as of November 4, 2025). This high multiple is common for consumer staples companies like Coca-Cola Consolidated, Inc., as much of their true value lies in intangible assets-things like the exclusive bottling rights and the strength of the Coca-Cola brand-that aren't fully captured in the book value (assets minus liabilities).

Dividends and Analyst Sentiment

For income-focused investors, the dividend profile is modest. Coca-Cola Consolidated, Inc. (COKE) pays an annual dividend of $1.00 per share, which translates to a low dividend yield of about 0.6%. However, the dividend is very safe, with a conservative payout ratio of approximately 14.25%, meaning the company retains most of its earnings for reinvestment or share buybacks.

Analyst consensus, despite the high valuation, remains a 'Buy' rating. This is defintely a point of caution, though, because the average price target from analysts is currently only $135.00. Here's the quick math: with the stock trading near $161.84, that target suggests a potential downside of over 16% from the current price. This gap often happens when a stock's momentum outpaces the formal, slower-moving analyst models.

• Current Analyst Consensus: Buy
• Average Analyst Price Target: $135.00
• Current Stock Price (Nov 2025): ~$161.84

What this estimate hides is the possibility of a special dividend or a large share buyback program, which Coca-Cola Consolidated, Inc. has used to return capital to shareholders. The company distributed over $211 million through share repurchases and dividends during 2025, a significant action that supports the stock price even if the P/E looks stretched. To truly understand the full financial picture, you need to look beyond just the valuation multiples, which is what we cover in the next section of this post: Breaking Down Coca-Cola Consolidated, Inc. (COKE) Financial Health: Key Insights for Investors.

Risk Factors

You need to know that even a company with Coca-Cola Consolidated, Inc.'s (COKE) track record isn't immune to significant risks. The direct takeaway is that while operational performance is strong, the recent $2.4 billion share repurchase has significantly increased financial leverage, which is now the most critical near-term risk for investors to monitor.

Financial and Strategic Risks: The Leverage Question

The biggest financial risk right now stems from the strategic decision to execute a large share repurchase. S&P Global Ratings, as of November 2025, revised the company's outlook to negative from stable, specifically citing the increased debt load. Here's the quick math: pro forma leverage-how much debt the company has relative to its earnings before interest, taxes, depreciation, and amortization (EBITDA)-is currently sitting at 2.6x. That's above the 2x threshold S&P considers for a potential downgrade of its 'BBB+' rating. Management is expected to rein this in, with S&P projecting leverage will fall closer to 2x through fiscal 2026. Until then, the company is unlikely to pursue further major share buybacks or acquisitions.

Another financial point to watch is the routine, non-cash fair value adjustments to the acquisition-related contingent consideration liability, which negatively impacted net income in the first nine months of 2025. It's a technical accounting item, but it still eats into reported earnings. Plus, leadership transitions remain a wild card in the coming quarters, which can always disrupt strategy.

Operational and External Headwinds

On the operational side, controlling costs and managing supply chain volatility are constant battles. In the third quarter of 2025, Selling, Distribution, and Administrative (SD&A) expenses rose by 6.6%, largely due to higher labor costs and annual wage adjustments. That's a real margin pressure point. Also, the timing of selling days can materially impact results; for instance, two fewer selling days in the first quarter of 2025 accounted for an approximate $10 million decline in income from operations.

External risks are also numerous and require constant vigilance:

• Commodity Volatility: The continued high cost and tariff volatility of aluminum, a key input, directly pressures gross margin.
• Consumer Shifts: The ongoing shift in demand toward Sparkling zero-sugar and flavored variants, and away from Coca-Cola Original Taste, forces continuous product re-alignment.
• Regulatory Changes: Potential changes in tax laws, new environmental standards, or sugar taxes could increase operating costs or reduce demand.
• Marketplace Competition: Consolidation among customers and competitors can lead to lower-than-expected net pricing for COKE's products.

Mitigation and Forward Action

The good news is that Coca-Cola Consolidated, Inc. has shown it can mitigate some of these risks. The annual price increases executed across the portfolio earlier in 2025 successfully offset the net impact of increased commodity costs. This pricing power is a key strength. The company is also investing heavily in its infrastructure, with a full fiscal year capital expenditure expectation of around $300 million, which should improve long-term efficiency. For a deeper dive into the company's core principles, check out the Mission Statement, Vision, & Core Values of Coca-Cola Consolidated, Inc. (COKE).

What this estimate hides, however, is the immediate impact of the high leverage. The best way to track this is by watching the company's progress on debt reduction over the next few quarters. The company is defintely focused on reducing that 2.6x leverage ratio.

Growth Opportunities

You're looking at Coca-Cola Consolidated, Inc. (COKE) and seeing a bottler, not the parent company, which means their growth story is less about global macro-trends and more about operational excellence and regional market share. The good news is their 2025 financial health shows they are executing well. Their future growth isn't a wild bet; it's grounded in a few clear, actionable drivers.

The core of their strategy is a precise focus on what sells now: product innovation in the non-carbonated space and strategic pricing power (Revenue Growth Management, or RGM). For the third quarter of 2025, net sales climbed 6.9% to $1.9 billion, which is a clear sign that their pricing strategies are offsetting any volume softness. Honestly, few companies can pull off that kind of net sales jump while maintaining margin discipline like COKE did, boosting their gross margin to 39.6% in Q3 2025.

Key Growth Drivers: Innovation and Expansion

COKE's near-term growth is tied directly to two things: adapting the product mix and expanding their distribution footprint in high-potential regions. They are defintely not just moving the same old soda around. They are actively shifting their portfolio to meet evolving consumer tastes, which is a smart move.

• Product Innovations: The focus is on the still beverage category, which includes ready-to-drink tea, coffee, and enhanced water. They've seen success with their zero-sugar and flavor offerings, which drove a 1.4% volume increase in the Sparkling category during Q3 2025.
• Market Expansion: COKE is expanding distribution capacity in key growth regions like Ohio, Indiana, and Kentucky. This is a concrete action that directly translates to increased sales territory and revenue.
• Strategic Partnerships: Their equity investments in manufacturing cooperatives, such as Southeastern and SAC, give them a competitive edge in production and procurement efficiencies.

Here's the quick math on their recent performance: In Q3 2025, operating income rose 8.6% to $246.6 million. This is what happens when you manage costs effectively while simultaneously increasing prices and optimizing the product mix.

Future Revenue and Earnings Estimates

Looking ahead, the growth trajectory is steady but moderated. S&P Global Ratings projects COKE will see continued low-single-digit percentage revenue growth through the near term. This growth is expected to maintain an EBITDA margin of approximately 16%.

What this estimate hides is the power of their distribution moat. Their competitive advantage as the largest U.S. bottler, with exclusive rights to manufacture and distribute Coca-Cola products across 14 U.S. states and the District of Columbia, is a massive barrier to entry for competitors. That kind of market dominance in a core consumer staples sector is a powerful, defensive position.

However, we must be realists. The company took on increased leverage following a $2.4 billion share repurchase, pushing their pro forma leverage to 2.6x. This means S&P Global revised their outlook to negative, and they expect COKE to hold off on further acquisitions or major shareholder returns until that leverage falls below 2x by 2027. So, while the operational cash flow is strong-projected to be more than $450 million annually after capital expenditure of about $300 million-the near-term focus is debt reduction, not big M&A.

If you want a deeper dive into the financial mechanics that underpin this growth, you can check out our full analysis at Breaking Down Coca-Cola Consolidated, Inc. (COKE) Financial Health: Key Insights for Investors.