The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Boston Beer (NYSE: SAM) and the rest of the beverages, alcohol, and tobacco stocks fared in Q1.
These companies' performance is influenced by brand strength, marketing strategies, and shifts in consumer preferences. Changing consumption patterns are particularly relevant and can be seen in the rise of cannabis, craft beer, and vaping or the steady decline of soda and cigarettes. Companies that spend on innovation to meet consumers where they are with regards to trends can reap huge demand benefits while those who ignore trends can see stagnant volumes. Finally, with the advent of the social media, the cost of starting a brand from scratch is much lower, meaning that new entrants can chip away at the market shares of established players.
The 16 beverages, alcohol, and tobacco stocks we track reported a mixed Q1. As a group, revenues missed analysts’ consensus estimates by 1%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Boston Beer (NYSE: SAM)
Known for its flavorful beverages challenging the status quo, Boston Beer (NYSE: SAM) is a pioneer in craft brewing and a symbol of American innovation in the alcoholic beverage industry.
Boston Beer reported revenues of $453.9 million, up 6.5% year on year. This print exceeded analysts’ expectations by 4.1%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
“Our business remained resilient despite subdued category trends,” said Chairman and Founder Jim Koch.
Boston Beer pulled off the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 22.3% since reporting and currently trades at $188.
Is now the time to buy Boston Beer? Access our full analysis of the earnings results here, it’s free.
Best Q1: Zevia (NYSE: ZVIA)
With a primary focus on soda but also a presence in energy drinks and teas, Zevia (NYSE: ZVIA) is a better-for-you beverage company.
Zevia reported revenues of $38.02 million, down 2% year on year, outperforming analysts’ expectations by 1.7%. The business had a very strong quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 65.7% since reporting. It currently trades at $3.38.
Is now the time to buy Zevia? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Molson Coors (NYSE: TAP)
Sporting an impressive roster of iconic beer brands, Molson Coors (NYSE: TAP) is a global brewing giant with a rich history dating back more than two centuries.
Molson Coors reported revenues of $2.30 billion, down 11.3% year on year, falling short of analysts’ expectations by 5.1%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
As expected, the stock is down 16.5% since the results and currently trades at $47.42.
Read our full analysis of Molson Coors’s results here.
Keurig Dr Pepper (NASDAQ: KDP)
Born out of a 2018 merger between Keurig Green Mountain and Dr Pepper Snapple, Keurig Dr Pepper (NASDAQ: KDP) is a consumer staples powerhouse boasting a portfolio of beverages including sodas, coffees, and juices.
Keurig Dr Pepper reported revenues of $3.64 billion, up 4.8% year on year. This print surpassed analysts’ expectations by 1.9%. It was a strong quarter as it also recorded a decent beat of analysts’ EBITDA and EPS estimates.
The stock is down 5.4% since reporting and currently trades at $33.26.
Read our full, actionable report on Keurig Dr Pepper here, it’s free.
Altria (NYSE: MO)
Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.
Altria reported revenues of $4.52 billion, down 4.2% year on year. This number came in 2.5% below analysts' expectations. Zooming out, it was a mixed quarter as it also logged a decent beat of analysts’ EBITDA estimates but a significant miss of analysts’ gross margin estimates.
The stock is up 1.1% since reporting and currently trades at $58.80.
Read our full, actionable report on Altria here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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