Coca-Cola Consolidated's Q2 income rises 45%

In its second-quarter report, Coca-Cola Consolidated Inc. (Nasdaq: COKE) said income from operations was $120.9 million for the period, ended Jul. 2, compared with $83.1 million in the second quarter of 2020, an increase of 45.4%. On an adjusted basis, income from operations in the second quarter of 2021 was $120.7 million, an increase of 47.8%. For the first half of 2021, income from operations increased $99.1 million to $215.0 million.

Net income in the second quarter of 2021 was $48.2 million, compared with $39.6 million in the second quarter of 2020, an improvement of $8.6 million. Net income in the second quarter was adversely impacted by fair value adjustments to our acquisition related contingent consideration liability, driven primarily by changes in future cash flow projections. Fair value adjustments to this liability are routine and non-cash in nature. Income tax expense in the second quarter of 2021 was $17.3 million, compared to $15.2 million in the second quarter of 2020. Net income increased $47.3 million in the first half of 2021 to $101.5 million as compared to the first half of 2020.

“Our strong 2021 operating results continued in the second quarter as positive volume growth, solid price realization and disciplined operating expense management drove our second quarter operating income up 45% versus the prior year period,” said J. Frank Harrison, III, CCCI chairman and chief executive officer."

CCI's physical case volume increased 5.9% in the second quarter. Sparkling volume was unchanged, while still volume increased 20.9%. The still category growth accelerated due to the re-openings of certain small stores and accounts where our products are consumed on-premise.

The still growth was driven primarily by BodyArmor, AHA and Monster brands. Sales of multiserve packages in larger retail stores remained very strong, while single-serve sales improved in small stores and other immediate consumption channels. Physical case volume in the first half of 2021 increased 5.3%.

CCCI's revenue increased 16.8% in the second quarter of 2021 driven by the significant increase in sales of still beverages, which generally carry a higher selling price per case than Sparkling beverages. The reopening of certain small store and other immediate consumption channels helped drive the growth in still beverages as these channels have a higher mix of still beverages than take-home outlets.

The company added that the increase in revenue was driven by price realization on most sparkling packages. Sales of multi-serve PET packages were especially strong in the quarter as we adjusted our commercial plans to emphasize these packages to complement our assortment of multi-serve can products in take-home outlets.

CCCI said sales growth in on-premise channels is now outpacing take-home channels, but we continue to see strong demand for future consumption packages. Revenue from fountain syrup, which is primarily sold through restaurants, convenience stores, amusement parks and other on-premise outlets, increased $20.8 million, or 92.4%, during the second quarter of 2021 as these outlets began to operate at higher levels of capacity. For the first half of 2021, revenue increased $302.7 million, or 12.6%.

Gross profit in the second quarter of 2021 increased $65.6 million, or 15.3%, while gross margin decreased 50 basis points to 34.5%.