Q2 Beverages and Alcohol Earnings: Celsius (NASDAQ:CELH) Earns Top Marks
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Celsius (NASDAQ:CELH) and the rest of the beverages and alcohol stocks fared in Q2.
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 mixed Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 13.1% below.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
Luckily, beverages and alcohol stocks have performed well with share prices up 10.5% on average since the latest earnings results.
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 $402 million, up 23.4% year on year. This print exceeded analysts’ expectations by 2.4%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ gross margin estimates.
John Fieldly, Chairman and CEO of Celsius Holdings, Inc., said: “Celsius today reported its best second quarter financial results ever, delivering records in revenue, gross profit and gross margin. Celsius continued to lead the energy drink category, contributing 47 percent of all second-quarter growth, and we believe that we are well-positioned to capture incremental category dollar share. Celsius innovation is giving consumers great tasting, better-for-you energy drink products that are filling a whitespace and bringing new consumers to an evolving energy drink category.”
Celsius scored the fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 23.6% since reporting and currently trades at $31.61.
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 $144.1 million, up 3.2% year on year, in line with analysts’ expectations. The business had a very strong quarter with an impressive beat of analysts’ gross margin estimates.
The market seems happy with the results as the stock is up 13.1% since reporting. It currently trades at $28.
Is now the time to buy Vita Coco? Access our full analysis of the earnings results here, it’s free.
Slowest Q2: 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 $579.1 million, down 4% year on year, falling short of analysts’ expectations by 3.1%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
The stock is flat since the results and currently trades at $270.19.
Read our full analysis of Boston Beer’s results here.
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 $23.32 billion, flat year on year. This number missed analysts’ expectations by 1.9%. Overall, it was a slower quarter as it also logged a miss of analysts’ organic revenue growth estimates.
The stock is up 3.1% since reporting and currently trades at $172.42.
Read our full, actionable report on PepsiCo here, it’s free.
Coca-Cola (NYSE:KO)
A pioneer and behemoth in carbonated soft drinks, The Coca-Cola Company (NYSE:KO) is a storied beverage company best known for its flagship soda of the same name.
Coca-Cola reported revenues of $12.31 billion, up 2.9% year on year. This result beat analysts’ expectations by 4.8%. It was a very strong quarter as it also put up an impressive beat of analysts’ organic revenue growth estimates and a narrow beat of analysts’ operating margin estimates.
Coca-Cola achieved the biggest analyst estimates beat among its peers. The stock is up 7.4% since reporting and currently trades at $69.55.
Read our full, actionable report on Coca-Cola here, it’s free.
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