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Coca-Cola Bottling (COKE) Q1 Earnings & Revenues Strong

Coca-Cola Bottling Co. Consolidated COKE, one of the largest independent bottlers of the products of The Coca-Cola Company KO, reported earnings of 67 cents per share in the first quarter of 2016, up 21.8% year over year. Adjusted earnings exclude acquisition related contingent consideration, expenses associated with territory expansion and one-time special charitable contribution.  

Coca-Cola Bottling reported net sales of $625.5 million, up 38% year over year. The revenue increase during the quarter was driven by the company’s ongoing investment across the portfolio in order to drive the top line.

Organic growth in the legacy territories as well as territory expansion through the acquisition of several new distribution territories from Coca-Cola led to the solid performance. The company plans to further expand its distribution territory and acquire additional production centers from Coca-Cola as part of the latter’s global re-franchising initiatives in 2016.

During first quarter 2016, the company expanded its territories to include Virginia and Washington, D.C and acquired an additional manufacturing facility in Richmond, VA, under its agreement with The Coca-Cola Company. Most of The Coca-Cola Company’s beverages are manufactured, sold and distributed by independent bottling partners, including Coca-Cola Enterprises Inc. CCE and Coca-Cola FEMSA S.A.B de C.V. KOF.  

During the quarter, the company reported modest sales increase in sparkling portfolio, while strong sales increase was noted in the still portfolio. The increase in still portfolio sales was driven by energy, water and isotonic categories.  

Gross margin of $243.9 million during the quarter increased 32.3% year over year, driven by strong revenues.  

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