Coca-Cola Consolidated Announces Dividend Increase and Share Repurchase Program

Rhea-AI Summary

Coca-Cola Consolidated (NASDAQ: COKE) has announced significant changes to its shareholder return strategy. The company's Board of Directors has increased the quarterly dividend from $0.50 to $2.50 per share, payable on November 8, 2024, to stockholders of record as of October 25, 2024. Additionally, the Board has approved a $1.0 billion share repurchase program for the Company's Common Stock.

CEO J. Frank Harrison, III, attributed these decisions to the company's improved profitability and strengthened balance sheet, emphasizing their commitment to building long-term value for stockholders while reinvesting in the business and employees.

Positive

• Quarterly dividend increased by 400% from $0.50 to $2.50 per share
• Board approved a substantial $1.0 billion share repurchase program
• Improved profitability and strengthened balance sheet reported by the company

Negative

• None.

Insights

Financial Analyst

This announcement from Coca-Cola Consolidated is a significant move that signals strong financial health and confidence in future performance. The 400% increase in quarterly dividend to $2.50 per share is substantial and will likely attract income-focused investors. Additionally, the $1.0 billion share repurchase program is a strategic use of capital that can potentially boost earnings per share and stock price.

These actions suggest the company has excess cash flow and is prioritizing shareholder returns. However, investors should consider whether such aggressive capital return might limit future growth investments. The move could also indicate organic growth opportunities, prompting the company to focus on financial engineering to create shareholder value.

Overall, this news is likely to be viewed positively by the market, potentially leading to a short-term stock price increase. Long-term implications will depend on the company's ability to maintain strong cash flows while balancing growth initiatives and shareholder returns.

Market Research Analyst

Coca-Cola Consolidated's decision to significantly increase its dividend and initiate a large share repurchase program reflects a broader trend in the beverage industry. As mature companies in a slow-growth market, many are focusing on returning capital to shareholders rather than aggressive expansion.

This move positions COKE as an attractive option for value and income investors, potentially shifting its investor base. The 400% dividend hike is particularly noteworthy, as it's well above industry norms and may set a new benchmark for peer companies.

However, this strategy also raises questions about the company's long-term growth prospects. In an evolving beverage market with changing consumer preferences towards healthier options, investors should closely monitor how COKE balances shareholder returns with necessary investments in product innovation and market adaptation to ensure sustainable growth.

• Quarterly dividend increased to $2.50 per share, up from $0.50 per share
  
• Board of Directors approves $1.0 billion share repurchase program

CHARLOTTE, N.C., Aug. 20, 2024 (GLOBE NEWSWIRE) -- Coca‑Cola Consolidated, Inc. (NASDAQ: COKE) announced today that its Board of Directors increased the Company’s quarterly dividend to $2.50 per share (up from $0.50 per share). The increased dividend will be payable November 8, 2024 to Common Stock and Class B Common Stock stockholders of record as of October 25, 2024.

The Company’s Board of Directors also approved a $1.0 billion share repurchase program for the Company’s Common Stock. The authorization to repurchase shares is at management’s discretion with respect to the timing and amount of the repurchases.

“As we’ve previously stated, the progress we’ve made improving our profitability and strengthening our balance sheet allows us to reinvest in our business and our teammates while taking steps to build long-term value for our stockholders,” said J. Frank Harrison, III, Chairman and Chief Executive Officer. “Our strong financial performance supports increasing our quarterly dividend and establishing a share repurchase program, which aligns with our commitment to return cash to our stockholders over time.”

CONTACTS:
Ashley Brown (Media)	Scott Anthony (Investors)
Director, External Communications	Executive Vice President & Chief Financial Officer
(803) 979-2849	(704) 557-4633
Ashley.Brown@cokeconsolidated.com	Scott.Anthony@cokeconsolidated.com

About Coca-Cola Consolidated, Inc.

Coca‑Cola Consolidated is the largest Coca‑Cola bottler in the United States. Our Purpose is to honor God in all we do, to serve others, to pursue excellence and to grow profitably. For over 122 years, we have been deeply committed to the consumers, customers and communities we serve and passionate about the broad portfolio of beverages and services we offer. We make, sell and distribute beverages of The Coca‑Cola Company and other partner companies in more than 300 brands and flavors across 14 states and the District of Columbia, to approximately 60 million consumers.

Headquartered in Charlotte, N.C., Coca‑Cola Consolidated is traded on The Nasdaq Global Select Market under the symbol “COKE”. More information about the Company is available at www.cokeconsolidated.com. Follow Coca‑Cola Consolidated on Facebook, X, Instagram and LinkedIn.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this news release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act.   Forward-looking statements include those statements that do not relate strictly to historical or current facts.   The words “anticipate,” “believe,” “expect,” “intend,” “project,” “may,” “will,” “should,” “could” and similar expressions are intended to identify forward-looking statements. While the Company has based these forward-looking statements on its current beliefs and expectations, these forward-looking statements are not guarantees and are subject to known and unknown risks, uncertainties and assumptions that may cause the Company’s actual business, financial condition or results of operation to be materially different from those expressed or implied by such forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including the “Risk Factors” section of the Company’s Annual Reports on Form 10-K and other filings the Company makes with the SEC. The Company does not undertake any obligation to update forward-looking statements except as required by applicable law.

FAQ

What is the new quarterly dividend for Coca-Cola Consolidated (COKE)?

Coca-Cola Consolidated (COKE) has increased its quarterly dividend to $2.50 per share, up from $0.50 per share previously.

When will the new Coca-Cola Consolidated (COKE) dividend be payable?

The increased dividend of $2.50 per share will be payable on November 8, 2024, to stockholders of record as of October 25, 2024.

How much is Coca-Cola Consolidated's (COKE) new share repurchase program worth?

Coca-Cola Consolidated (COKE) has approved a $1.0 billion share repurchase program for the Company's Common Stock.

Why did Coca-Cola Consolidated (COKE) increase its dividend and announce a share repurchase program?

According to CEO J. Frank Harrison, III, the company's improved profitability and strengthened balance sheet allow for these actions, which align with their commitment to return cash to stockholders and build long-term value.