As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at beverages, alcohol, and tobacco stocks, starting with MGP Ingredients (NASDAQ: MGPI).
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 strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was 1% below.
Thankfully, share prices of the companies have been resilient as they are up 7.7% on average since the latest earnings results.
MGP Ingredients (NASDAQ: MGPI)
Headquartered in Atchison, Kansas, MGP Ingredients (NASDAQ: MGPI) is a leading supplier of high-quality ingredients to the food and beverage industry
MGP Ingredients reported revenues of $145.5 million, down 23.7% year on year. This print exceeded analysts’ expectations by 3.7%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ gross margin estimates.
MGP Ingredients scored the highest full-year guidance raise but had the slowest revenue growth of the whole group. Unsurprisingly, the stock is up 2.1% since reporting and currently trades at $30.
Is now the time to buy MGP Ingredients? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $739.3 million, up 83.9% year on year, outperforming analysts’ expectations by 14%. The business had an incredible quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Celsius pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 39.4% since reporting. It currently trades at $59.76.
Is now the time to buy Celsius? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Tilray (NASDAQ: TLRY)
Founded in 2013, Tilray Brands (NASDAQ: TLRY) engages in cannabis research, cultivation, and distribution, offering a range of medical and recreational cannabis products, hemp-based foods, and alcoholic beverages.
Tilray reported revenues of $224.5 million, down 2.3% year on year, falling short of analysts’ expectations by 2%. It was a slower quarter as it posted a significant miss of analysts’ gross margin estimates and a significant miss of analysts’ EPS estimates.
Tilray delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 95.3% since the results and currently trades at $1.36.
Read our full analysis of Tilray’s results here.
Coca-Cola (NYSE: KO)
A pioneer and behemoth in carbonated soft drinks, Coca-Cola (NYSE: KO) is a storied beverage company best known for its flagship soda.
Coca-Cola reported revenues of $12.62 billion, up 2.1% year on year. This print topped analysts’ expectations by 0.5%. Overall, it was a satisfactory quarter as it also put up an impressive beat of analysts’ EBITDA estimates.
The stock is down 1.8% since reporting and currently trades at $68.90.
Read our full, actionable report on Coca-Cola 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 $2.52 billion, down 5.5% year on year. This result missed analysts’ expectations by 1.5%. Overall, it was a slower quarter as it also produced a miss of analysts’ EBITDA estimates and a miss of analysts’ gross margin estimates.
The stock is down 4% since reporting and currently trades at $159.85.
Read our full, actionable report on Constellation Brands here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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