USA & Canada: Molson Coors’ worldwide beer volumes drop 2.4% in Q2 2018
Beer brewer Molson Coors has promised to “aggressively” address falling volumes in the North American market, where customers’ thirst for brands like Coors Light, Miller Lite and Molson Canadian failed to perk up in the second quarter.
The Denver-based company said on August 1 that worldwide brand volumes fell 2.4 per cent in the three months ending June 30, with growth in Europe and international markets failing to overcome the declines in the US and Canada.
Net sales dipped 0.2 per cent year-over-year to $3.085 bln. Adjusted for currency, the decline was 1.9 per cent — an improvement on the 4.8 per cent drop seen in the first quarter of 2018, when it cited a “ softer than anticipated” start to the year.
Net income grew, however, thanks to a boost from US tax reform, lower marketing expenses and other factors, coming in more than 28 per cent higher year-over-year at $424.1 mln, or $1.96 a diluted share. Adjusted for special items, net income was 10.6 per cent improved from last year at $406.1 mln, or $1.88 a share.
Analysts had expected revenue of $4.096 bln, net income of $420 mln and earnings per share of $1.81, according to Thomson Reuters.
Mark Hunter, the company’s chief executive and president, said he was pleased with the “sequential improvement” in the second quarter. He added:
“Our full year underlying cost savings and free cash flow guidance has not changed, despite ongoing industry demand challenges in the US and Canada and inflationary pressures. While we are aggressively addressing our volume performance in North America, performance in our Europe and International businesses was strong in the quarter.”
Mass-market beer makers like Molson Coors have grappled with shifting tastes, as more consumers opt to reach for wine, liquor or a craft beer made by smaller companies over mainstream brews. Like some of its rivals, those shifts have left Molson Coors exploring other potential growth avenues — including marijuana, which was recently legalised for recreational use in Canada.
Molson Coors Canada earlier on August 1 announced that it was forming a joint venture with The Hydropothecary Corp to “pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market”.
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