Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at Constellation Brands (NYSE:STZ) 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. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, 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.
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, topping 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.
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Best Q1: Boston Beer (NYSE: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.
The stock is up 2.9% since the results and currently trades at $295.56.
Weakest Q1: Zevia PBC (NYSE: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.
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 $170.6 million, down 15.1% year on year, in line with analysts' expectations. It was a weak quarter for the company, with a miss of analysts' operating margin estimates and full-year revenue guidance missing analysts' expectations.
MGP Ingredients had the slowest revenue growth among its peers. The stock is down 3.7% since the results and currently trades at $75.5.
Molson Coors (NYSE: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 $2.60 billion, up 10.7% year on year, surpassing analysts' expectations by 3.7%. It was a very strong quarter for the company, with a solid beat of analysts' earnings and operating margin estimates.
Molson Coors pulled off the biggest analyst estimates beat among its peers. The stock is down 20.9% since the results and currently trades at $50.27.
