Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at PepsiCo (NASDAQ:PEP) and the best and worst performers in the beverages, alcohol, and tobacco industry.
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%.
While some beverages, alcohol, and tobacco stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.1% since the latest earnings results.
PepsiCo (NASDAQ:PEP)
With a history that goes back more than a century, PepsiCo (NASDAQ:PEP) is a household name in food and beverages today and best known for its flagship soda.
PepsiCo reported revenues of $17.92 billion, down 1.8% year on year. This print exceeded analysts’ expectations by 0.7%. Despite the top-line beat, it was still a mixed quarter for the company with a decent beat of analysts’ organic revenue estimates but a slight miss of analysts’ EPS estimates.
The stock is down 7.4% since reporting and currently trades at $131.69.
Is now the time to buy PepsiCo? 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 23.5% since reporting. It currently trades at $2.52.
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 8.6% since the results and currently trades at $51.90.
Read our full analysis of Molson Coors’s results here.
Tilray (NASDAQ:TLRY)
Founded in 2013, Tilray Brands (NASDAQ:TLRY) engages in cannabis research, cultivation, and distribution, offering a range of medical and recreational cannabis products, hemp-based foods, and alcoholic beverages.
Tilray reported revenues of $185.8 million, down 1.4% year on year. This print missed analysts’ expectations by 10.1%. Overall, it was a slower quarter as it also logged a significant miss of analysts’ EBITDA and gross margin estimates.
Tilray had the weakest performance against analyst estimates and weakest full-year guidance update among its peers. The stock is down 33.2% since reporting and currently trades at $0.39.
Read our full, actionable report on Tilray here, it’s free.
Brown-Forman (NYSE:BF.B)
Best known for its Jack Daniel’s whiskey, Brown-Forman (NYSE:BF.B) is an alcoholic beverage company with a broad portfolio of brands in wines and spirits.
Brown-Forman reported revenues of $894 million, down 7.3% year on year. This number came in 7.8% below analysts' expectations. It was a softer quarter as it also recorded a significant miss of analysts’ organic revenue and EPS estimates.
The stock is down 17.9% since reporting and currently trades at $27.28.
Read our full, actionable report on Brown-Forman here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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