As the Q1 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the beverages, alcohol, and tobacco industry, including Tilray (NASDAQ: TLRY) and its peers.
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 2.2% on average since the latest earnings results.
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 fell short of analysts’ expectations by 10.1%. Overall, it was a slower quarter for the company with a significant miss of analysts’ EBITDA and gross margin estimates.
Irwin D. Simon, Chairman and Chief Executive Officer of Tilray Brands, stated, "Tilray Brands is shaping the future of consumer markets with a robust global infrastructure spanning the beverage, cannabis, and wellness industries. We are meeting the needs of today’s consumers while preparing for the demands of tomorrow. In the third quarter, we prioritized sales quality and revenue, protected margins, reduced debt, and improved our capital structure. With a strong balance sheet and a clear vision for the future, Tilray is well positioned to capitalize on emerging opportunities and ensure long-term success.”
Tilray delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. The stock is down 21.3% since reporting and currently trades at $0.46.
Read our full report on Tilray 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 35.3% since reporting. It currently trades at $2.76.
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 6.1% since the results and currently trades at $53.34.
Read our full analysis of Molson Coors’s results here.
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 recorded 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 $71.15.
Read our full, actionable report on Coca-Cola 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. This number surpassed analysts’ expectations by 4.1%. It was a very strong quarter as it also logged 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. The stock is down 5.6% since reporting and currently trades at $228.55.
Read our full, actionable report on Boston Beer 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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