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Q1 Earnings Outperformers: PepsiCo (NASDAQ:PEP) And The Rest Of The Beverages and Alcohol Stocks


Max Juang /
2024/06/19 6:16 am EDT

As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the beverages and alcohol industry, including PepsiCo (NASDAQ:PEP) 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 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 13 beverages and alcohol stocks we track reported a decent Q1; on average, revenues were in line with analyst consensus estimates. while next quarter's revenue guidance was 15.8% below consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the beverages and alcohol stocks have fared somewhat better than others, they collectively declined, with share prices falling 4.2% on average since the previous earnings results.

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 $18.25 billion, up 2.3% year on year, in line with analysts' expectations. It was a mixed quarter for the company: PepsiCo blew past analysts' organic revenue growth expectations. Its EPS narrowly outperformed Wall Street's estimates. On the other hand, its operating margin missed analysts' expectations and its gross margin missed Wall Street's estimates.

PepsiCo Total Revenue

The stock is down 5.5% since the results and currently trades at $166.69.

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

Best Q1: 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 $426.1 million, up 3.9% year on year, outperforming analysts' expectations by 3.3%. It was a stunning quarter for the company, with an impressive beat of analysts' earnings estimates.

Boston Beer Total Revenue

The stock is up 2.9% since the results and currently trades at $295.56.

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

Weakest Q1: Zevia PBC (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 PBC reported revenues of $38.8 million, down 10.4% year on year, falling short of analysts' expectations by 1.6%. It was a weak quarter for the company, with revenue guidance for next quarter missing analysts' expectations and a miss of analysts' operating margin estimates.

Zevia PBC had the weakest full-year guidance update in the group. The stock is down 19.3% since the results and currently trades at $0.85.

Read our full analysis of Zevia PBC's results here.

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 $3.47 billion, up 3.4% year on year, surpassing analysts' expectations by 1.6%. It was a solid quarter for the company, with a decent beat of analysts' gross margin and earnings estimates.

The stock is up 6.8% since the results and currently trades at $34.56.

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

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 $2.14 billion, up 7.1% year on year, surpassing analysts' expectations by 2%. It was a decent quarter for the company, with an impressive beat of analysts' organic revenue growth estimates but a miss of analysts' gross margin estimates.

The stock is down 0.5% since the results and currently trades at $263.65.

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

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