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Molson Coors falls short again
Molson Coors is forecasting lower full-year sales after it fell short of Wall Street’s estimates for sales in its latest quarter, reports Ron Emler.
Net sales in the three months to October fell by 7.8% to US$3.04 billion compared with Molson Coors’ results during the same period last year. The market’s consensus predictions was for sales of US$3.13 billion.
The US brewer reported a 5.4% fall in Americas brand volumes during the third quarter, primarily driven by a drop in sales of its higher-priced beers.
The United States was “challenged with the macroeconomic environment along with anticipated unfavourable shipment timing and the wind down of a contract brewing agreement,” the company said.
Like rival Constellation Brands with its Modelo and Corona lines, Molson Coors has relied on higher pricing to offset an increase in costs faced by the industry against the backdrop of inflation.
It now expects net sales for this full year to be about 1% lower than in 2023. Previously it had forecast of a low single-digit percentage increase.
Weighing on consumers
While customers stretched their budgets to purchase the company’s products up until recently, the downbeat sales forecast indicates inflation is still weighing on consumers.
The disappointing figures come only a week after shares in AB-InBev, the world’s biggest brewer, posted a sharper-than-expected 3.1% drop in beer volumes, dragged down mainly by a 14.2% slide in volumes in China.
Molson Coors recently came under fire for axing its diversity, equity, and inclusion (DEI) policies in order to refocus on its “business objectives”. The company said that its future charitable endeavours will now solely support “hometown communities” aligned to its “core business goals”, meaning that Molson Coors may no longer participate in the Human Rights Campaign’s Corporate Equality Index, which tracks LGBTQ+ corporate policies and initiatives.
In August, Molson Coors reported a 4% drop in revenue during the first quarter of 2024. Later that same month, it sold four craft beer businesses – Hop Valley Brewing Company (Oregon), Terrapin Beer Co (Georgia), Revolver Brewing (Texas) and Atwater Brewery (Illinois) – to Canadian cannabis group Tilray for an undisclosed sum.
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