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 Celsius (NASDAQ: CELH) 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 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.
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 $329.3 million, down 7.4% year on year. This print fell short of analysts’ expectations by 3.8%. Overall, it was a softer quarter for the company with a miss of analysts’ EBITDA and EPS estimates.
John Fieldly, Chairman and CEO of Celsius Holdings, said: “Celsius navigated a dynamic operating environment in the first quarter while continuing to invest in our core brand, product innovation and operational scale. We saw business fundamentals strengthen through the quarter and are encouraged by the positive momentum heading into Q2. With the Alani Nu acquisition now closed, continued gains in retail shelf space, and strong international growth across both legacy and new markets, we are confident in our growth strategy, and we believe that we are well-positioned as a leader in modern energy.”
Interestingly, the stock is up 5.1% since reporting and currently trades at $35.67.
Is now the time to buy Celsius? 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 an impressive beat of analysts’ EPS estimates and a solid 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.
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 surpassed analysts’ expectations by 0.7%. Aside from that, it was a mixed quarter as it also produced a decent beat of analysts’ organic revenue estimates but a slight miss of analysts’ EPS estimates.
The stock is down 8% since reporting and currently trades at $130.91.
Read our full, actionable report on PepsiCo here, it’s free.
Philip Morris (NYSE: PM)
Founded in 1847, Philip Morris International (NYSE: PM) manufactures and sells a wide range of tobacco and nicotine-containing products, including cigarettes, heated tobacco products, and oral nicotine pouches.
Philip Morris reported revenues of $9.30 billion, up 5.8% year on year. This result beat analysts’ expectations by 2.6%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ gross margin estimates.
The stock is up 9% since reporting and currently trades at $178.70.
Read our full, actionable report on Philip Morris 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.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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