10-QPeriod: Q3 FY2026

COCA COLA CO Quarterly Report for Q3 Ended Jul 3, 2026

Filed July 29, 2026For Securities:KO

Summary

The Coca-Cola Company reported strong financial results for the quarter and six months ended July 3, 2026. Net operating revenues increased by 7% for the quarter and 9% for the six-month period, driven by a combination of volume growth, favorable price/mix, and positive foreign currency impacts. Net income attributable to shareowners also saw a substantial increase, up 16% for the quarter and 18% for the six months, reflecting the top-line growth and effective cost management. The company maintained a robust gross profit margin of 62.9% and demonstrated solid operating income growth across most segments, particularly in Latin America and North America. Despite a challenging operating environment, including higher commodity costs partially offset by pricing initiatives, Coca-Cola demonstrated resilience. The company also provided an update on its significant U.S. federal income tax dispute, highlighting that it paid $6 billion plus interest, with the outcome still pending on appeal. The company's strong cash flow generation from operations continues to support its capital allocation priorities, including dividends and share repurchases, underpinning confidence in its ongoing financial stability and ability to manage potential future liabilities.

Key Highlights

  • 1Net operating revenues increased by 7% for the three months ended July 3, 2026, reaching $13.38 billion, and by 9% for the six months ended July 3, 2026, reaching $25.85 billion, driven by volume, price/mix, and currency tailwinds.
  • 2Consolidated Net Income Attributable to Shareowners of The Coca-Cola Company grew by 16% to $4.43 billion for the quarter and by 18% to $8.35 billion for the six months, demonstrating strong profitability.
  • 3Gross profit margin improved to 62.9% for both the three-month and six-month periods, up from 62.4% and 62.5% respectively in the prior year, indicating effective cost management and pricing strategies.
  • 4Operating income increased by 9% for the quarter to $4.67 billion and by 14% for the six months to $9.03 billion, reflecting broad-based operational improvements across segments.
  • 5The company successfully managed its debt, with interest expense decreasing by 17% for the quarter and 11% for the six months due to lower average short-term debt balances.
  • 6Significant progress was made on the U.S. Federal Income Tax Dispute, with the company having paid the assessed $6 billion plus interest and continuing its appeal, while maintaining confidence in its ultimate position.
  • 7Unit case volume growth was positive across most segments, with notable increases in Asia Pacific (8% for the quarter) and Bottling Investments (5% for the quarter), signaling continued consumer demand.

Frequently Asked Questions

Coca-Cola reported strong financial performance for the period ended July 3, 2026. Net operating revenues increased significantly, driven by volume growth, favorable price/mix, and positive currency fluctuations. Profitability also improved, with Consolidated Net Income attributable to Shareowners showing robust year-over-year growth. The company maintained a strong gross profit margin and saw operational income rise across most of its segments.

International operations demonstrated resilience and growth. The EMEA segment experienced a 1% increase in unit case volume for the quarter, while Latin America saw a 3% increase, supported by favorable pricing and currency tailwinds. Asia Pacific showed particularly strong unit case volume growth of 8% in the quarter. Overall, foreign currency fluctuations had a favorable impact on consolidated net operating revenues and operating income due to a weaker U.S. dollar against key foreign currencies.

The company has paid the IRS $6 billion plus accrued interest related to the tax years 2007-2009. The company is appealing the Tax Court's decision and believes it has strong legal arguments to prevail. While confident in its position, the company acknowledges the possibility that a portion or all of the IRS's proposed adjustments could be upheld. The potential aggregate remaining incremental tax and interest liability for subsequent tax years (2010-2025) is estimated to be approximately $14 billion as of December 31, 2025, with an additional estimated impact of $450 million to $900 million for the periods presented in 2026.

The company continues to manage its debt effectively. Interest expense decreased significantly due to lower average short-term debt balances. Coca-Cola has substantial cash, cash equivalents, and investments totaling $16.4 billion, along with significant unused backup lines of credit. The company's capital allocation priorities include reinvesting in the business, growing its dividend, strategic acquisitions, and share repurchases, reflecting a strong liquidity position and confidence in its financial future.