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 Philip Morris (NYSE:PM) 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 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% on average since the latest earnings results.
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 print exceeded analysts’ expectations by 2.6%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ gross margin estimates.
"We achieved exceptionally strong performance in the first quarter, with continued volume growth supporting an excellent top-line performance and very strong margin expansion," said Jacek Olczak, Chief Executive Officer.
Philip Morris Total Revenue
The stock is up 7.6% since reporting and currently trades at $176.50.
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.
Zevia Total Revenue
The market seems happy with the results as the stock is up 40.7% since reporting. It currently trades at $2.87.
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 4.4% since the results and currently trades at $54.31.
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 beat analysts’ expectations by 0.7%. More broadly, it was a mixed quarter as it also logged a decent beat of analysts’ organic revenue estimates but a slight miss of analysts’ EPS estimates.
The stock is down 8.5% since reporting and currently trades at $130.10.
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%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Boston Beer delivered the biggest analyst estimates beat among its peers. The stock is down 3.4% since reporting and currently trades at $233.97.
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.
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