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 Keurig Dr Pepper (NASDAQ: KDP) 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 Q4. As a group, revenues beat analysts’ consensus estimates by 1.2% while next quarter’s revenue guidance was 0.6% below.
In light of this news, share prices of the companies have held steady as they are up 3.4% on average since the latest earnings results.
Keurig Dr Pepper (NASDAQ: KDP)
Born out of a 2018 merger between Keurig Green Mountain and Dr Pepper Snapple, Keurig Dr Pepper (NASDAQ: KDP) is a consumer staples powerhouse boasting a portfolio of beverages including sodas, coffees, and juices.
Keurig Dr Pepper reported revenues of $4.07 billion, up 5.2% year on year. This print exceeded analysts’ expectations by 1.4%. Despite the top-line beat, it was still a mixed quarter for the company with a narrow beat of analysts’ EBITDA estimates but a slight miss of analysts’ gross margin estimates.
Commenting on the results, CEO Tim Cofer stated, "In 2024, we delivered strong financial performance consistent with our long-term algorithm and advanced our strategy to lay the groundwork for KDP's next phase of growth. We gained market share through exciting innovation, marketing, and activation across our CSD and coffee brands, drove win-win outcomes with partner brands such as Electrolit and C4, and took bold action to extend our portfolio and route to market with the acquisition of GHOST and select territory expansions."
Is now the time to buy Keurig Dr Pepper? Access our full analysis of the earnings results here, it’s free.
Best Q4: Anheuser-Busch (NYSE: BUD)
Born out of a complicated web of mergers and acquisitions, Anheuser-Busch InBev (NYSE: BUD) boasts a powerhouse beer portfolio of Budweiser, Stella Artois, Corona, and local favorites around the world.
Anheuser-Busch reported revenues of $14.84 billion, up 2.5% year on year, outperforming analysts’ expectations by 5.5%. The business had a stunning 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 18.8% since reporting. It currently trades at $65.04.
Is now the time to buy Anheuser-Busch? Access our full analysis of the earnings results here, it’s free.
Slowest Q4: 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 $402.3 million, up 2.2% year on year, exceeding analysts’ expectations by 2.4%. Still, it was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations.
Interestingly, the stock is up 2% since the results and currently trades at $238.92.
Read our full analysis of Boston Beer’s results here.
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 $39.46 million, up 4.4% year on year. This print was in line with analysts’ expectations. More broadly, it was a softer quarter as it produced full-year EBITDA guidance missing analysts’ expectations.
The stock is down 28.6% since reporting and currently trades at $2.32.
Read our full, actionable report on Zevia 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 $11.4 billion, up 4.2% year on year. This number surpassed analysts’ expectations by 6.5%. It was a very strong quarter as it also recorded an impressive beat of analysts’ organic revenue estimates and a decent beat of analysts’ EBITDA estimates.
Coca-Cola pulled off the biggest analyst estimates beat among its peers. The stock is up 11.3% since reporting and currently trades at $71.80.
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 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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