Key Takeaways Coca-Cola has risen 11.9% in a year, outpacing its industry and showing resilience in a mixed backdrop.KO posted solid Q3 organic revenue growth, volume gains and margin expansion despite currency pressure.Coca-Cola trades above key moving averages and holds value-share gains for 18 straight quarters.The Coca-Cola Company (KO) has displayed reasonable strength with 11.9% growth in the past year, outperforming the Beverages – Soft Drinks industry’s 4.9% rally and the Consumer Staples sector’s 5 ...

Core Insights - AB InBev has enhanced its competitive position through a focus on premiumization and innovation, achieving a 6.5% year-over-year increase in EBITDA in Q2 2025 despite volume pressures in key markets like Brazil and China [2][6] - The company's strategy emphasizes value-driven growth, leveraging high-margin brands and consumer insights to shift towards products that offer pricing power and brand loyalty [2][3] Premiumization Strategy - AB InBev's global portfolio includes megabrands such as Corona, Budweiser, Stella Artois, and Michelob Ultra, which are central to its premiumization strategy [3] - The company owns eight of the world's ten most valuable beer brands, with Corona's revenues growing by 7.7% outside of Mexico, and Michelob Ultra and Stella Artois rising in global rankings [3] Innovation and Product Development - Innovation is a key growth driver, with successful launches like Michelob Ultra Zero and Busch Light Apple, catering to health-conscious and younger consumers [4] - The focus on developing no- and low-alcohol options broadens appeal across various consumption occasions [4] Digital Transformation - AB InBev is enhancing its competitiveness through digital transformation, with platforms like BEES achieving a 63% year-over-year increase in gross merchandise value, reaching $785 million [5] - Direct-to-consumer digital platforms generated $134 million in revenues, improving operational efficiency and enabling data-driven decision-making [5] Future Outlook - The premiumization and innovation strategies position AB InBev well for sustained market leadership, adapting to long-term consumer shifts and economic dynamics [6] - Despite short-term volume softness in regions like Brazil and China, the company's focus on value creation and premium growth is expected to maintain its competitive edge [6] Stock Performance - AB InBev's shares have declined by 12.1% over the past three months, underperforming the industry and broader Consumer Staples sector [7] - The stock trades at a forward P/E ratio of 14.63X, higher than the industry average of 13.65X, indicating that investors may be anticipating stronger growth prospects [10]

Core Insights - PepsiCo, Inc. reported strong third-quarter 2025 results with revenues and earnings per share (EPS) exceeding estimates, although EPS showed a year-over-year decline [1][10] - The company demonstrated accelerated net revenue growth compared to the previous quarter, indicating resilience in a challenging environment [1][2] Financial Performance - Core EPS for the third quarter was $2.29, surpassing the Zacks Consensus Estimate of $2.27, but declined 0.9% year over year [3] - Reported net revenues reached $23.94 billion, a 2.6% increase year over year, beating the Zacks Consensus Estimate of $23.87 billion [4] - The reported gross profit decreased by 0.8% year over year to $12.8 billion, with a core gross profit decline of 0.4% to $12.9 million [5][7] - Operating income was reported at $3.6 billion, down 7.8% year over year, while core operating income fell 0.9% to $4.2 billion [7] Segment Performance - Revenue growth was observed across most operating segments, with notable increases in North America and international markets, except for the IB Franchise segment [9][11] - Organic revenues improved in several segments, including a 2% increase for PBNA and 5.5% for EMEA, while PFNA and IB Franchise saw declines [11] Financial Stability - As of the end of Q3 2025, PepsiCo had cash and cash equivalents of $8.1 billion and long-term debt of $44.1 billion [12] - Net cash provided by operating activities was $5.5 million, down from $6.2 billion in the previous year [12] Future Outlook - For 2025, PepsiCo aims for low-single-digit organic revenue growth and steady core EPS performance, with a focus on innovation and cost optimization [13][14] - The company anticipates currency headwinds to impact revenues and core EPS by 0.5 percentage points in 2025 [15] - PepsiCo plans to return $8.6 billion to shareholders in 2025, including $7.6 billion in dividends and $1 billion in share repurchases [16]

Core Insights - Boston Beer Company is navigating a challenging operating environment characterized by macroeconomic uncertainty, pressured consumer spending, and weak category demand, yet it has achieved strong margin gains and earnings growth [1][4] - The company's innovation strategy, particularly with products like Sun Cruiser and Twisted Tea Light, is driving consumer engagement and brand relevance, helping to offset declines in more mature categories [2][7] - Boston Beer is focusing on long-term brand building, reinforcing core brands like Twisted Tea and Samuel Adams while expanding newer offerings, which illustrates a disciplined strategy in a competitive beverage landscape [3][4] Financial Performance - Despite weak demand and soft retail traffic, Boston Beer posted margin gains and earnings growth, indicating resilience in its financial performance [7] - The company's shares have gained 18% over the past three months, outperforming the industry and broader Consumer Staples sector, which declined by 6.6% and 1.8%, respectively [5] Valuation Metrics - Boston Beer currently trades at a forward 12-month P/E ratio of 20.43X, which is higher than the industry average of 13.82X and the sector average of 25.51X, suggesting that investors may be pricing in stronger growth prospects [9]

Core Insights - Diageo Plc's fiscal 2025 results highlight a disparity in performance between developed and emerging markets, with overall organic sales increasing by 1.7%, primarily driven by growth in emerging economies [1][7] - The company is focusing on expanding its presence in high-growth markets, particularly in regions like India, Africa, and Latin America, where premiumization trends are strong [2][4] Emerging Markets Performance - Emerging markets, especially India, Africa, and Latin America, showed positive trends in both volume and price/mix, contributing significantly to Diageo's organic sales growth [1][2][7] - In India, the premiumization of whisky, particularly in the prestige segment, is supported by smaller pack sizes and potential benefits from the U.K.-India Free Trade Agreement [1][4] Developed Markets Challenges - Developed markets, including North America and Europe, faced challenges with volume declines and cautious consumer behavior, leading to subdued growth despite some price/mix gains [3][7] - North America experienced volume declines, while Europe saw softer volumes amid macroeconomic uncertainty, with price/mix gains from Guinness partially offsetting weaknesses [3][7] Strategic Focus - Diageo's growth strategy emphasizes targeted investments, localized marketing, and portfolio innovation in emerging markets to sustain momentum and offset pressures in developed markets [4] - The company aims to leverage demographic trends and rising premium spirits consumption in emerging markets as a key growth engine [4] Stock Performance - Diageo's shares have declined by 22.7% year-to-date, underperforming the industry and broader Consumer Staples sector [5] - The stock trades at a forward 12-month P/E ratio of 14.23X, which is higher than the industry average of 13.95X but lower than the S&P 500's average of 23.32X, indicating a premium valuation relative to peers [8]

Core Insights - Keurig Dr Pepper's U.S. Refreshment Beverages segment is a significant growth driver, showcasing strength in both legacy brands and new innovations in a competitive market [1][4] - The segment experienced a 10.5% year-over-year net sales increase in Q2 2025, driven by a 9.5% gain in volume mix and modest pricing growth, largely attributed to the GHOST energy acquisition [2][9] - Broad-based growth across categories, with notable gains in carbonated soft drinks, sports hydration, and energy drinks, including energy brands surpassing a $1 billion annual run rate [3][9] Financial Performance - Segment operating income rose 8% year-over-year, indicating effective translation of top-line expansion into profit growth [2] - Energy brands, including GHOST, C4, and Bloom, achieved retail sales growth exceeding 30% in the quarter [3][9] - The company currently trades at a forward 12-month P/E ratio of 12.84X, which is lower than the industry average of 17.40X and the sector average of 16.96X, positioning the stock at a modest discount [10] Future Outlook - Management anticipates the segment to contribute mid-single-digit growth in the long term, with the need for careful navigation of inflation, competition, and affordability concerns [4] - Strong execution and expanding distribution are expected to support the growth trajectory into the remainder of 2025 [4]

Industry Overview - The Zacks Beverages – Soft Drinks industry is facing challenges due to rising costs, tariff uncertainty, and supply-chain disruptions, which are negatively impacting margins and profitability [1][5][9] - The industry is currently ranked 184 out of over 250 Zacks industries, placing it in the bottom 25% and indicating dull near-term prospects [9][10][11] - The industry has underperformed compared to the Consumer Staples sector and the S&P 500 Index, with a collective loss of 8.6% over the past year [12] Consumer Trends - There is a growing demand for healthier beverages with natural ingredients, reduced sugar, and functional benefits, leading companies to pivot away from sugary sodas [2][6] - Plant-based beverages and functional drinks that promote hydration, energy, and mood support are gaining traction among health-conscious consumers [6] Digital Transformation and Innovation - The industry is leveraging digital transformation to enhance consumer engagement and capture evolving demand through investments in e-commerce and subscription models [3][7][8] - Companies are optimizing fulfillment strategies and expanding digital offerings to boost customer loyalty and secure recurring revenues [7][8] Company Performance - PepsiCo is expected to benefit from its strong global beverage and convenience food businesses, with a focus on cost-management and revenue-management initiatives amid inflationary pressures [19][20] - Zevia, focused on zero-sugar, naturally sweetened drinks, has seen a stock increase of 166.7% in the past year, with strong growth estimates for sales and earnings [23][24] - Coca-Cola is positioned for long-term growth through strategic transformation and digital investments, with a focus on the rapidly growing RTD category [27][28] - Monster Beverage continues to perform well in the energy drinks category, with a stock increase of 28.2% in the past year and positive growth estimates [30][31] - Keurig Dr Pepper is benefiting from momentum in the Refreshment Beverages segment, with growth estimates for sales and earnings, despite a stock decline of 22.4% in the past year [34][35]

Core Insights - Brown-Forman Corporation (BF.B) reported mixed first-quarter fiscal 2026 results, with net sales exceeding estimates but earnings per share (EPS) falling short [1][3][6] - The company has taken decisive actions to strengthen its business amid challenging conditions, focusing on innovation and consumer strategies to maintain growth [1][2][19] Financial Performance - EPS for the fiscal first quarter was 36 cents, down 13% year over year, missing the Zacks Consensus Estimate of 37 cents [3][6] - Net sales reached $924 million, a 3% decline year over year, but surpassed the Zacks Consensus Estimate of $911 million; on an organic basis, net sales increased by 1% [3][6] - Gross profit was $552 million, a 2% decline year over year, while gross margin improved by 40 basis points to 59.8% due to acquisitions and divestitures [4][6] - Operating income decreased by 7% year over year to $260 million, with an operating margin of 28.2%, down 140 basis points from the previous year [8] Market Performance - In the U.S., net sales fell 8% year over year, impacted by the absence of the prior-year Sonoma-Cutrer TSA and lower volumes of key brands [9] - Developed international markets saw an 8% decline in net sales, primarily due to reduced demand and geopolitical pressures [10] - Emerging markets experienced a 20% increase in net sales, driven by strong growth in the Jack Daniel's brand, particularly in Brazil and Türkiye [11] - The Travel Retail channel reported an 8% increase in net sales, supported by higher volumes of Jack Daniel's Tennessee Whiskey [12] Brand Performance - Whiskey product sales remained flat year over year, with strong initial shipments of Jack Daniel's Tennessee Blackberry offset by declines in other key products [13] - Tequila portfolio sales fell 1% year over year, with Herradura brand sales dropping significantly, while el Jimador saw a 14% increase [14] - The Ready-to-Drink (RTD) category grew by 6% year over year, with New Mix experiencing a notable 26% increase [15] - The rest of the portfolio saw a significant decline of 27% year over year, largely due to the absence of Sonoma-Cutrer and Finlandia TSAs [16] Financial Health - As of the end of the first quarter, the company had cash and cash equivalents of $471 million and long-term debt of $2.1 billion, with total shareholders' equity at $3.99 billion [17] Outlook - For fiscal 2026, the company anticipates continued challenges due to macroeconomic and geopolitical volatility, projecting a low-single digit decline in organic net sales and operating income [18][20]

Core Insights - Anheuser-Busch InBev SA/NV (AB InBev) reported second-quarter 2025 results with earnings per share (EPS) exceeding estimates and showing year-over-year improvement, while revenues declined and missed consensus estimates [1][2][3] Financial Performance - Underlying EPS was 98 cents, an increase of 8.7% year over year, driven by 10.2% EBIT growth and optimized net finance costs, surpassing the Zacks Consensus Estimate of 94 cents [2][6] - Revenues totaled $15 billion, missing the Zacks Consensus Estimate of $15.33 billion and reflecting a 2.1% year-over-year decline, although organic revenue grew by 3% across 70% of markets [3][4] - Revenue per hectoliter improved by 4.9% year over year, supported by revenue-management initiatives [4][6] Volume and Market Performance - Total organic volume decreased by 1.9%, with a 2.2% decline in own-beer volume, partially offset by a 0.3% increase in non-beer volume, primarily affected by soft market conditions in China and Brazil [4][6] - Excluding China and Brazil, volume increased by 0.7%, indicating strong momentum in other markets [7] Brand Performance - Megabrands, particularly Corona, contributed to a 5.6% revenue increase, with Corona seeing a 7.7% revenue rise outside of Mexico [6][7] - The Beyond Beer portfolio recorded a 6.4% revenue rise, driven by significant growth in brands like Cutwater and Nütrl in the U.S. [9] Cost Management - Cost of sales decreased by 3.1% to $6.6 billion, while SG&A expenses fell by 3.9% year over year to $4.6 billion [9][11] - Normalized EBITDA was $5.3 billion, nearly flat year over year, with an organic growth of 6.5% and an expanded EBITDA margin of 35.3% [11] Future Outlook - For 2025, AB InBev anticipates EBITDA growth of 4-8%, with projected net capital expenditure between $3.5 billion and $4 billion [13]

Core Insights - FEMSA reported a second-quarter 2025 net majority earnings per ADS of $0.42, down from $1.87 in the same quarter last year, missing the Zacks Consensus Estimate of $0.91 [1][7] - Total revenues for the quarter were $10.84 billion, reflecting a 6.3% year-over-year increase in local currency, but fell short of the Zacks Consensus Estimate of $11.2 billion [2][7] - The company's net consolidated income was Ps. 5,593 million (approximately $297 million), showing a growth of 64.3% from the previous year [1] Revenue and Earnings Performance - Revenue growth was driven by gains in business units outside Mexico and favorable currency rates due to the depreciation of the Mexican Peso [2] - Including currency effects and M&A, revenues grew by 2.2% year over year [2] - The gross profit increased by 4.2% year over year to Ps. 85,922 million (approximately $4.56 billion), but the consolidated gross margin contracted by 80 basis points to 40.7% [4][8] Segment Performance - Proximity Americas: Revenues rose 6.9% year over year to Ps. 83,958 million (approximately $4.5 billion), but same-store sales dropped by 0.4% due to a decline in store traffic [9] - Proximity Europe: Revenues grew 31.4% year over year to Ps. 15,065 million (approximately $800 million), benefiting from currency appreciation [11] - Health Division: Revenues increased by 15.6% year over year to Ps. 21,850 million (approximately $1.16 billion), with same-store sales rising by 13.1% in Mexican pesos [12] - Fuel Division: Revenues rose 0.6% year over year to Ps. 17,100 million (approximately $908.2 million), with operating income improving by 13.6% [13] - Coca-Cola FEMSA: Revenues advanced 5% year over year to Ps. 72,917 million (approximately $3.9 billion), but the operating margin contracted by 60 basis points to 13.4% [14] Financial Position - As of June 30, 2025, FEMSA had cash and cash equivalents of Ps. 129,825 million (approximately $6.9 billion) and long-term debt of Ps. 136,215 million (approximately $7.2 billion) [15] - Capital expenditure in the second quarter totaled Ps. 9,203 million (approximately $488.8 million), a decline from the previous year due to reduced spending in Proximity Americas and the Health division [15]