Will Coca-Cola Bottling (COKE) Perform Well in Q3?

Zacks

North Carolina-based Coca-Cola Bottling Co. Consolidated (COKE) is set to report third quarter 2014 financial results on Nov 4 after the market closes.

Last quarter, Coca-Cola Bottling posted a year-over-year earnings increase of 29.5%. Let’s see how things are shaping up prior to the announcement.

Factors to Consider

The company is the largest independent bottler of products of The Coca-Cola Company (KO) in the United States.

Historically, the company generates higher unit sales in the second and third quarters versus the first and fourth quarters of the fiscal year due to business seasonality.

Revenue management, distribution cost management, product innovation and beverage portfolio expansion have remained Coca-Cola Bottling Co.’s strengths over the past many quarters. Meanwhile, the company continues to focus on pricing and packaging of its brands. We believe these growth initiatives will contribute toward the financial results of the third quarter of 2014.

We note that in October this year, Coca-Cola Bottling Co. closed its agreement with The Coca-Cola Company to expand its franchise territory to include Knoxville, TN. This marks the second phase of the franchise territory expansion agreement between the company and The Coca-Cola Company. The remaining areas in the agreement include Cleveland and Cookeville, TN; Louisville, Paducah and Pikeville, KY and Evansville, IN. Expansion of franchise territory is expected to boost the company’s top line in the upcoming quarters.

Coca-Cola Bottling also signed a definitive agreement with The Coca-Cola Company to exchange the bottler’s franchise territory in Jackson, TN. The Jackson area is currently served by Coca-Cola Refreshments USA, Inc. (CCR), a Lexington based wholly-owned subsidiary of The Coca-Cola Company.

Some other stocks worth considering in the same industry include Barfresh Food Group Inc (BRFH) and True Drinks Holdings, Inc. (TRUU). Both companies carry a Zacks Rank #2 (Buy).

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