Winners And Losers Of Q4: Keurig Dr Pepper (NASDAQ:KDP) Vs The Rest Of The Beverages and Alcohol Stocks

Max Juang /
2024/03/27 5:05 am EDT

The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s take a look at how Keurig Dr Pepper (NASDAQ:KDP) and the rest of the beverages and alcohol stocks fared in Q4.

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 explosion of alcoholic craft beer drinks or the steady decline of non-alcoholic sugary sodas. 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 14 beverages and alcohol stocks we track reported a weaker Q4; on average, revenues were in line with analyst consensus estimates while next quarter's revenue guidance was 20.2% below consensus. Stocks have been under pressure as inflation (despite slowing) makes their long-dated profits less valuable, but beverages and alcohol stocks held their ground better than others, with share prices down 1.3% on average since the previous earnings results.

Keurig Dr Pepper (NASDAQ:KDP)

Born out of a 2018 merger between coffee company Keurig Green Mountain and beverage company Dr Pepper Snapple, Keurig Dr Pepper (NASDAQ:KDP) boasts a powerhouse portfolio of beverages.

Keurig Dr Pepper reported revenues of $3.87 billion, up 1.7% year on year, falling short of analyst expectations by 1%. It was a mixed quarter for the company, with gross margin and EPS exceeding expectations. On the other hand, its operating margin and its revenue missed Wall Street's estimates as its sales volumes shrunk. For 2024, the company expects to generate constant currency sales in the mid-single-digit range, which should translate into high single-digit EPS growth.

Commenting on the results, Chairman and CEO Bob Gamgort stated, "2023 was a year of significant progress for KDP. Broad-based market share gains across our portfolio and entries into attractive white spaces supported our revenue momentum. Gross margin expansion resumed, as the relationship between inflation, pricing, and our redoubled productivity efforts improved throughout the year and helped fund investments in our brands and capabilities. We delivered on our financial commitments while simultaneously enhancing the composition of our earnings profile and strengthening our balance sheet.

Keurig Dr Pepper Total Revenue

The stock is down 3.3% since the results and currently trades at $30.58.

Read our full report on Keurig Dr Pepper here, it's free.

Best Q4: Vita Coco (NASDAQ:COCO)

Founded in 2004 followed by a 2021 IPO, The Vita Coco Company (NASDAQ:COCO) offers coconut water products that are a natural way to quench thirst.

Vita Coco reported revenues of $106.1 million, up 15.4% year on year, outperforming analyst expectations by 7%. It was a very strong quarter for the company, with an impressive beat of analysts' earnings and revenue estimates.

Vita Coco Total Revenue

Vita Coco achieved the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is up 8.6% since the results and currently trades at $24.35.

Is now the time to buy Vita Coco? Access our full analysis of the earnings results here, it's free.

Weakest 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 $393.7 million, down 12% year on year, falling short of analyst expectations by 4.8%. It was a weak quarter for the company, with a miss of analysts' revenue and EPS estimates.

Boston Beer had the slowest revenue growth in the group. The stock is down 16.6% since the results and currently trades at $308.42.

Read our full analysis of Boston Beer's results here.

Constellation Brands (NYSE:STZ)

With a presence in more than 100 countries, Constellation Brands (NYSE:STZ) is a globally renowned producer and marketer of beer, wine, and spirits.

Constellation Brands reported revenues of $2.47 billion, up 1.4% year on year, falling short of analyst expectations by 2.6%. It was a weak quarter for the company, with underwhelming earnings guidance for the full year. In addition, revenue missed during the quarter due to underperformance in the 'Wines & Spirits' segment.

The stock is up 11.1% since the results and currently trades at $269.29.

Read our full, actionable report on Constellation Brands here, it's free.

MGP Ingredients (NASDAQ:MGPI)

Headquartered in Atchison, Kansas, MGP Ingredients (NASDAQGS:MGPI) is a leading supplier of high-quality ingredients to the food and beverage industry

MGP Ingredients reported revenues of $214.9 million, up 12.5% year on year, surpassing analyst expectations by 4.6%. It was a decent quarter for the company, with EPS and gross margin exceeding expectations. Its revenue also outperformed Wall Street's estimates. In particular, the company's premium branded spirits portfolio grew by an astonishing 50% year on year. On the other hand, its full-year revenue guidance missed analysts' expectations.

MGP Ingredients had the weakest full-year guidance update among its peers. The stock is down 9.8% since the results and currently trades at $82.95.

Read our full, actionable report on MGP Ingredients here, it's free.

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