Coca-Cola Consolidated (COKE -11.80%) stock got hit with big sell-offs Thursday following the company's first-quarter earnings report. The company's share price closed out the daily session down 12% despite the backdrop of a 0.6% gain for the S&P 500.

Coca-Cola Consolidated reported its Q1 results after the market closed yesterday, and the market isn't happy with the results. While the business posted a modest sales decline, profitability saw a big drop off -- and investors are concerned about the margins picture going forward.

Coca-Cola Consolidated stock slips on softening margins

Coca-Cola Consolidated reported earnings per share of $11.87 on revenue of $1.58 billion in the quarter. Revenue was down 0.7% in the quarter, but the decline mostly stemmed from the fact that this year's quarter had two fewer sales days compared to last year's period due to holiday timing. Meanwhile, the company's gross profit margin slipped from 40.2% to 39.7% -- and gross profit declined 2% year over year. Operating income for the quarter came in at $190 million -- down 12% year over year.

What's next for Coca-Cola Consolidated?

While revenue was essentially flat in Q1, Coca-Cola Consolidated's unit volume fell 6.6% year over year in the period. Pricing increases were needed to keep revenue at roughly the same level as last year's quarter. Adjusting for the two fewer sales days in this year's quarter, volume would have been down 4.5% year over year.

Even though pricing increases effectively stabilized revenue last quarter, they weren't enough to prevent a decline for the business's gross margin. If declines for unit volume continue, that sets up an unfavorable picture for future earnings. Coca-Cola Consolidated should be able to continue delivering moderate pricing increases, but the extent of pricing increases may not be able to match declines for volume.