Core Insights - Zacks Premium provides various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - Stocks are rated based on value, growth, and momentum characteristics, with scores ranging from A to F, where A indicates the highest potential for outperformance [3] - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [4] - The Growth Score emphasizes a company's financial health and future growth potential, analyzing projected and historical earnings [5] - The Momentum Score identifies stocks with favorable price trends, utilizing recent price changes and earnings estimate revisions [6] - The VGM Score combines the three Style Scores to highlight stocks with attractive value, growth forecasts, and momentum [6] Zacks Rank and Performance - The Zacks Rank is a proprietary model that uses earnings estimate revisions to simplify portfolio building [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [10] Company Spotlight: Monster Beverage Corporation - Monster Beverage Corporation, based in Corona, CA, is a prominent marketer and distributor of energy drinks [12] - Currently rated 3 (Hold) on the Zacks Rank, Monster Beverage has a VGM Score of B [12] - The company is appealing to growth investors, with a Growth Style Score of A and a projected year-over-year earnings growth of 17.3% for the current fiscal year [13] - Recent upward revisions in earnings estimates by analysts indicate a positive outlook, with the Zacks Consensus Estimate rising to $1.90 per share [13]

Core Insights - NRSInsights reported a 5.8% year-over-year increase in same-store sales for July 2025, marking the highest growth rate in over a year [6][10] - The NRS retail network includes approximately 37,200 active terminals across 32,100 independent retailers, primarily serving urban consumers [2][14] - The data reflects a total of $2.1 billion in sales processed through NRS POS terminals in July 2025, an 18% increase year-over-year [14] Sales Performance - Same-store sales increased 5.8% year-over-year and 0.3% month-over-month compared to June 2025 [6] - For the three months ending July 31, 2025, same-store sales rose 4.2% compared to the same period last year [6] - Units sold increased by 3.2% year-over-year but decreased by 1.5% compared to June 2025 [6] Transaction Metrics - The number of baskets (transactions) per store increased by 1.5% year-over-year but decreased by 0.4% compared to June 2025 [6] - The average price of the top 500 items purchased rose by 2.9% year-over-year, slightly higher than the 2.7% increase recorded in June 2025 [6] Comparative Analysis - Over the past twelve months, the U.S. Commerce Department's Advance Monthly Retail Trade data, excluding food services, outpaced the NRS network's three-month moving average same-store sales by 0.2% on average [8] - In June, the NRS network's three-month rolling average increase exceeded the U.S. Commerce Department's by 0.9% [8] Consumer Behavior Insights - Beverage categories, including energy drinks and soft drinks, contributed significantly to sales growth, while certain snack categories faced challenges [11] - Shifts in consumer behavior have led to increased demand for prepared cocktails and nutrition shakes [11] Transaction Volume - Same-store data comparisons for July 2025 were based on approximately 226 million transactions processed through about 23,000 stores [12] - For the three months ending July 31, 2025, comparisons were derived from approximately 649 million scanned transactions [13]

Financial Data and Key Metrics Changes - Revenue for Q2 was $416 million, representing a 28% increase or $91 million over the same quarter last year [30] - Adjusted EBITDA for the quarter was $89 million, an increase of 37% or $24 million year-over-year [33] - Adjusted EPS was $0.26, up from $0.19, reflecting a 37% increase from Q2 of the previous year [38] Business Line Data and Key Metrics Changes - Company-operated same shop sales growth was 7.8%, with 5.9% attributed to transaction growth [33] - System same shop sales growth was 6.1%, driven by a 3.7% increase in transactions [31] - The company opened 31 new shops in Q2, bringing the total system shop count to 1,043 [32] Market Data and Key Metrics Changes - System-wide average unit volumes (AUVs) were $2,050,000, consistent with record levels [11] - Approximately 72% of system transactions were attributed to the loyalty program, a five-point increase from the same period last year [21] Company Strategy and Development Direction - The company is focused on a growth strategy, aiming to open at least 160 new shops in 2025, with a long-term goal of 2,029 shops by 2029 [15][14] - A three-part plan for transaction growth includes innovation, increased paid advertising, and emphasis on the Dutch rewards program [16][17] - The company is expanding its competitive advantages through strategic investments in market planning and operational efficiency [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong performance and momentum in Q2 [7][28] - The company is well-positioned to capture additional market share, driven by rising demand for cold beverages and energy drinks [29] - Management raised full-year guidance for total revenues, same shop sales growth, and adjusted EBITDA based on strong Q2 results [40] Other Important Information - The company has a robust operator pipeline with over 450 candidates, ensuring a consistent high bar across markets [13] - The company is transitioning the majority of its headquarters staff to Arizona, expecting to incur up to $8.5 million in non-recurring costs [38] Q&A Session Summary Question: CPG strategy for next year - Management plans to roll out CPG in markets where shops exist, with early rollout expected in 2026 [43][44] Question: Update on speed and throughput initiatives - Management is focused on labor deployment and has implemented speed dashboards to improve throughput [49][50] Question: New shop productivity and market specifics - New shop productivity remains elevated, with strong results across different markets [53] Question: Prioritization of investments in beverage and food platforms - Innovation is guided by market trends and customer testing, with a focus on various beverage categories [56][57] Question: Mobile order mix expectations - Mobile order mix is currently at 11.5%, with some newer markets exceeding this average [63] Question: Decision to roll out food program gradually - The gradual rollout of the food program allows for proper training and equipment installation in shops [67][68] Question: Clarification on Q3 guidance and marketing strategy - Management expects Q3 comps of 3.5% to 4%, with strong underlying traffic trends [71][72] Question: Marketing spend efficiency - Marketing spend is currently on the lower end compared to competitors, with a focus on efficiency [91][93]

Company Overview - Dutch Bros Inc. operates approximately 1,000 coffee shops across 18 states in the U.S. market [1] - The company is recognized as a high-growth coffee chain [1] Target Market - Dutch Bros has successfully attracted younger generations by focusing on cold beverages and energy drinks [1]

Core Insights - PepsiCo, Inc. reported strong second-quarter 2025 results with revenues and earnings per share (EPS) exceeding the Zacks Consensus Estimate, although EPS declined year over year [1][3] - The company experienced accelerated net revenue growth compared to the previous quarter, demonstrating its ability to navigate a challenging environment [1] - International momentum remained robust, while North America showed improved execution and competitiveness across key subcategories and channels [2] Financial Performance - Core EPS for Q2 was $2.12, beating the Zacks Consensus Estimate of $2.03, but reflecting a 7% decline year over year; reported EPS was 92 cents, down 59.1% year over year [3][6] - Net revenues reached $22.73 billion, a 1% increase year over year, surpassing the Zacks Consensus Estimate of $22.39 billion; unit volume declined 1.5% in convenient food and was flat in beverages [4][6] - Organic revenue growth was 2.1% in Q2, driven by a 4% increase in effective net pricing, offset by a 1.5% decline in organic volume [7] Profitability Metrics - Reported gross profit decreased 1.3% year over year to $12.4 billion, with core gross profit down 0.4% to $12.5 million; gross margins contracted [8] - Operating income fell 55.8% year over year to $1.8 billion, while core operating income declined 5.1% to $3.9 billion; operating margins contracted significantly [9] Segment Performance - Revenue growth was observed across most operating segments, with reported revenues rising 1% in PFNA, 8% in EMEA, and 3% in IB Franchise, but flat in PBNA and down 7% in LatAm Foods [11] - Organic revenues improved in most segments, with PBNA up 1%, IB Franchise up 5%, EMEA up 7%, and LatAm Foods up 6%, while PFNA saw a 2% decline [12] Financial Stability - As of Q2 2025, PepsiCo had cash and cash equivalents of $7.6 billion, long-term debt of $39.3 billion, and shareholders' equity of $18.4 billion [13] - Net cash provided by operating activities was $996 million, down from $1.3 billion year over year [13] Future Outlook - PepsiCo reaffirmed its 2025 revenue guidance, expecting low-single-digit organic revenue growth, while core constant-currency EPS outlook improved due to moderating foreign exchange headwinds [14][15] - The company anticipates core EPS to decline 1.5% year over year in 2025, with currency headwinds expected to impact revenues and core EPS by 1.5 percentage points [16] - PepsiCo plans to return $8.6 billion to shareholders in 2025, including $7.6 billion in dividends and $1 billion in share repurchases [17]

Core Insights - McDonald's Corporation (MCD) is focusing on the high-margin beverage category to boost traffic and average check size globally [1] - The company plans to test an expanded beverage lineup in U.S. restaurants later this year, leveraging insights from its CosMc's pilot concept [1][4] - Management identified beverages, beef, and chicken as core growth pillars, supported by a new organizational structure with dedicated category leaders [2][10] Beverage Market Strategy - Insights from CosMc's indicate that 80% of customers prefer preset beverage recipes with minor customization, reducing operational complexity concerns [3][10] - McDonald's sees significant potential in the beverage segment, particularly in cold beverages, energy drinks, and customizable options, currently capturing about 10% of the U.S. coffee market [4] - The company is optimistic about integrating learnings from CosMc's into its core restaurants to drive growth [4] Competitive Landscape - McDonald's faces increasing competition in the premium beverage category from established players like Starbucks and Dutch Bros [5] - Starbucks dominates the U.S. specialty beverage market, with cold beverages making up over 75% of total drink sales, leveraging personalization and mobile ordering [6] - Dutch Bros reported a 10% year-over-year increase in same-shop sales and a 29% rise in total revenues, focusing on speed and customer connection [7] Financial Performance - McDonald's shares have decreased by 4% over the past three months, while the industry has grown by 4.5% [8] - The company trades at a forward price-to-sales ratio of 7.86, significantly higher than the industry's 4.02 [11] - The Zacks Consensus Estimate for McDonald's earnings per share indicates a year-over-year increase of 4.5% for 2025 and 7.8% for 2026, with recent upward revisions [13]

Core Insights - Keurig Dr Pepper (KDP) is expanding its presence in the energy drinks market through a diverse portfolio that includes acquisitions and partnerships, such as GHOST Energy and C4, while also supporting emerging brands like Bloom Sparkling Energy and Black Rifle Energy [1][2]. Group 1: Energy Drinks Portfolio - KDP's energy drinks portfolio achieved a 6.4% constant currency net sales growth in Q1 2025, with GHOST Energy contributing 4.8 points to volume mix growth and experiencing double-digit retail growth [3][9]. - The multi-brand strategy allows KDP to target different consumer niches, enhancing credibility and diversifying risk, with brands like C4 appealing to performance-focused consumers and Bloom targeting female consumers [2]. Group 2: Growth Outlook - KDP anticipates continued high growth in energy and sports hydration categories, supported by favorable consumption trends and planned innovations across its brands, despite macroeconomic uncertainties [4]. - The energy drink segment's growth is expected to mitigate challenges in other areas, such as coffee, reinforcing KDP's leadership in the broader beverage market [4]. Group 3: Financial Performance - KDP's shares have appreciated by 3.1% over the past year, outperforming the Zacks Beverages - Soft Drinks industry's decline of 2.0% and the broader Consumer Staples industry's return of 1.1% [5]. - The stock is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 15.93X, which is below the industry's average of 17.99X, indicating it is undervalued compared to peers [10].

Core Viewpoint - Rocky Mountain High Brands, Inc. (RMHB) is undergoing significant personnel changes and has reached a settlement in a lawsuit with a former landlord, which will allow the company to focus on its restructuring and growth initiatives [1][4]. Personnel Changes - The company has announced various personnel changes, including the resignation of key executives such as David Seeberger (Director & CEO), Imran Kaiser (Director & VP), and Winn Morrison (Director) as of June 2025 [10]. - A turnaround team is currently managing operations to minimize general and administrative costs while working with potential new directors who are existing investors [2][3]. Legal Settlement - RMHB prioritized settling a disputed lawsuit with its former landlord, resulting in a settlement that releases the company from all claims. This settlement was funded by existing investors who exchanged stock for payment, avoiding an increase in the company's debt [4]. Financial Restructuring - The company is in the process of restructuring, with over $400,000 in new capital raised in the first and second quarters of 2025, specifically for its wholly owned subsidiary, Rocky Mountain NexBev [5]. - A member of the turnaround team has loaned RMHB over $300,000, which will be converted to Paid In Capital in the second quarter of 2025 [5]. Operational Focus - Rocky Mountain NexBev will serve as the copacker and distribution center for the company's products, with plans to begin production of brands and private label customer products in the third quarter of 2025 [6]. - The delay in product launch due to the lawsuit settlement has opened new manufacturing opportunities, including non-food grade products, to complement existing beverage lines [6]. Business Strategy - RMHB aims to enhance the quality and expectations in the beverage sector, focusing on innovation and niche opportunities [7]. - The subsidiary, Rocky Mountain NexBev, specializes in non-alcoholic beverages and is expected to generate significant short-term revenue by exploring new customer opportunities, including a recently added customer, Smart Bio-Hemp™ Wood Protectant [8].

Core Insights - Monster Beverage reported quarterly earnings of $0.47 per share, exceeding the Zacks Consensus Estimate of $0.46 per share, and up from $0.42 per share a year ago, representing an earnings surprise of 2.17% [1] - The company posted revenues of $1.85 billion for the quarter, missing the Zacks Consensus Estimate by 6.40%, and down from $1.9 billion year-over-year [2] - The stock has increased approximately 15.2% since the beginning of the year, contrasting with a -4.3% decline in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.47 on revenues of $2.05 billion, and for the current fiscal year, it is $1.84 on revenues of $7.99 billion [7] - The estimate revisions trend for Monster Beverage is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Beverages - Soft drinks industry is currently in the top 20% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Core Viewpoint - JPMorgan analyst Andrea Teixeira maintains an Overweight rating on Celsius Holdings, Inc. with a price target of $44 despite the company missing earnings and sales expectations for the first quarter [1][3]. Group 1: Financial Performance - Celsius reported first-quarter adjusted earnings per share of 18 cents, missing the analyst consensus estimate of 19 cents [1]. - Quarterly sales were $329.28 million, down 7% year over year, and also fell short of the expected $344.03 million [1]. Group 2: Analyst Insights - Teixeira highlighted improving retailer scanner data for Celsius, indicating underlying strength beyond recent data trends, and noted accelerating momentum for Alani Nu [2]. - The management's cautious tone during the earnings call was attributed to better-than-expected gross margins [2]. - The post-earnings stock rebound may be influenced by short covering, as investor positioning was likely skewed toward short interest prior to the report [3]. Group 3: Market Trends and Competitive Position - Energy drinks are regaining momentum, contrasting with the general weakening of consumption trends in most consumer packaged goods sectors, making Celsius more attractive [4]. - Celsius benefits from consumer "megatrends," such as the demand for clean energy alternatives from health-conscious consumers, which are expected to support sustained growth and enhance competitive edge [4][5]. - These trends are anticipated to allow Celsius to capture additional market share in both U.S. and international markets [5].