Q3 Earnings Review: Beverages, Alcohol, and Tobacco Stocks Led by Zevia (NYSE:ZVIA)

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how beverages, alcohol, and tobacco stocks fared in Q3, starting with Zevia (NYSE:ZVIA).

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 13 beverages, alcohol, and tobacco stocks we track reported a mixed Q3. As a group, revenues missed analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 2.7% below.

Luckily, beverages, alcohol, and tobacco stocks have performed well with share prices up 15.4% on average since the latest earnings results.

Best Q3: 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 $36.37 million, down 15.6% year on year. This print fell short of analysts’ expectations by 6.8%, but it was still a strong quarter for the company with EBITDA guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EPS estimates.

“We are very pleased to have delivered vast improvements in net loss and adjusted EBITDA, despite coming in slightly below our net sales expectations,” said Amy Taylor, President and Chief Executive Officer.

Zevia delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 289% since reporting and currently trades at $4.22.

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

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 $132.9 million, down 3.7% year on year, falling short of analysts’ expectations by 4.3%. However, the business still had a strong quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ gross margin estimates.

Vita Coco scored the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 17.9% since reporting. It currently trades at $36.30.

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

Weakest Q3: Celsius (NASDAQ:CELH)

With its proprietary MetaPlus formula as the basis for key products, Celsius (NASDAQ:CELH) offers energy drinks that feature natural ingredients to help in fitness and weight management.

Celsius reported revenues of $265.7 million, down 30.9% year on year, falling short of analysts’ expectations by 0.7%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.

Celsius delivered the slowest revenue growth in the group. As expected, the stock is down 15.4% since the results and currently trades at $26.88.

Read our full analysis of Celsius’s results here.

Altria (NYSE:MO)

Best known for its Marlboro brand of cigarettes, Altria (NYSE:MO) offers tobacco and nicotine products.

Altria reported revenues of $5.34 billion, up 1.3% year on year. This number was in line with analysts’ expectations. Aside from that, it was a mixed quarter as its performance in some other areas of the business was disappointing.

The stock is up 3.8% since reporting and currently trades at $52.40.

Read our full, actionable report on Altria 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 $2.92 billion, up 2.9% year on year. This print missed analysts’ expectations by 0.7%. More broadly, it was a satisfactory quarter as it also logged a solid beat of analysts’ EBITDA estimates but a miss of analysts’ organic revenue estimates.

The stock is down 13.3% since reporting and currently trades at $221.69.

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

Market Update

Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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