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 Q1, starting with Zevia (NYSE: ZVIA).
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 15 beverages, alcohol, and tobacco stocks we track reported a mixed Q1. As a group, revenues missed analysts’ consensus estimates by 0.5%.
In light of this news, share prices of the companies have held steady as they are up 2.8% on average since the latest earnings results.
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. This print exceeded analysts’ expectations by 1.7%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Interestingly, the stock is up 38.2% since reporting and currently trades at $2.82.
Is now the time to buy Zevia? Access our full analysis of the earnings results here, it’s free.
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, outperforming analysts’ expectations by 4.1%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Boston Beer scored the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.4% since reporting. It currently trades at $238.75.
Is now the time to buy Boston Beer? 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 2% since the results and currently trades at $55.64.
Read our full analysis of Molson Coors’s results here.
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 missed analysts’ expectations by 2.5%. More broadly, it was a mixed quarter as it also produced a decent beat of analysts’ EBITDA estimates but a significant miss of analysts’ gross margin estimates.
The stock is up 2.1% since reporting and currently trades at $59.40.
Read our full, actionable report on Altria here, it’s free.
Coca-Cola (NYSE: KO)
A pioneer and behemoth in carbonated soft drinks, Coca-Cola (NYSE: KO) is a storied beverage company best known for its flagship soda.
Coca-Cola reported revenues of $11.22 billion, flat year on year. This result topped analysts’ expectations by 0.6%. Aside from that, it was a satisfactory quarter as it also logged a decent beat of analysts’ organic revenue estimates but EBITDA in line with analysts’ estimates.
The stock is flat since reporting and currently trades at $71.86.
Read our full, actionable report on Coca-Cola here, it’s free.
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.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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