The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how beverages, alcohol, and tobacco stocks fared in Q3, starting with Celsius (NASDAQ: CELH).

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 14 beverages, alcohol, and tobacco stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was in line.

While some beverages, alcohol, and tobacco stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.3% since the latest earnings results.

Best Q3: Celsius (NASDAQ: CELH)

With its proprietary MetaPlus formula as the basis for key products, Celsius (NASDAQ: CELH) offers energy drinks that feature natural ingredients to help in fitness and weight management.

Celsius reported revenues of $725.1 million, up 173% year on year. This print exceeded analysts’ expectations by 1.2%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

John Fieldly, Chairman and CEO of Celsius Holdings, said: “The third quarter marked another important step in Celsius Holdings’ transformation in a year full of growth catalysts. We strengthened our long-term partnership with PepsiCo and united CELSIUS, Alani Nu, and Rockstar Energy under one total energy portfolio. Combined, our brands grew nearly twice as fast as the U.S. energy drink category, driven by Alani Nu’s incredible momentum and improving trends for our core CELSIUS brand. Limited-time offerings across the portfolio also performed exceptionally well - support for our belief that innovation and consumer engagement continue to power our growth. With a broader portfolio, a deeper leadership bench, and the reach of PepsiCo’s system, we’re operating from a position of strength and staying focused on building sustainable growth for the long term.”

Celsius achieved the fastest revenue growth 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 33.9% since reporting and currently trades at $40.12.

We think Celsius is a good business, but is it a buy today? Read our full report here, it’s free for active Edge members.

Vita Coco (NASDAQ: COCO)

Founded in 2004 followed by a 2021 IPO, The Vita Coco Company (NASDAQ: COCO) offers coconut water products that are a natural way to quench thirst.

Vita Coco reported revenues of $182.3 million, up 37.2% year on year, outperforming analysts’ expectations by 15.2%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.

Vita Coco delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 8.1% since reporting. It currently trades at $45.65.

Is now the time to buy Vita Coco? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Altria (NYSE: MO)

Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.

Altria reported revenues of $5.25 billion, down 1.7% year on year, falling short of analysts’ expectations by 1.3%. It was a slower quarter as it posted a significant miss of analysts’ gross margin estimates and a slight miss of analysts’ revenue estimates.

As expected, the stock is down 6.1% since the results and currently trades at $58.17.

Read our full analysis of Altria’s results here.

Constellation Brands (NYSE: STZ)

With a presence in more than 100 countries, Constellation Brands (NYSE: STZ) is a globally renowned producer and marketer of beer, wine, and spirits.

Constellation Brands reported revenues of $2.48 billion, down 15% year on year. This result surpassed analysts’ expectations by 0.5%. It was a satisfactory quarter as it also recorded a decent beat of analysts’ organic revenue estimates.

The stock is down 5.7% since reporting and currently trades at $130.88.

Read our full, actionable report on Constellation Brands here, it’s free for active Edge members.

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 $40.84 million, up 12.3% year on year. This number topped analysts’ expectations by 3.7%. It was an exceptional quarter as it also put up EBITDA guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.

Zevia had the weakest full-year guidance update among its peers. The stock is up 5.9% since reporting and currently trades at $2.50.

Read our full, actionable report on Zevia here, it’s free for active Edge members.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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