Molson Coors Beverage Co. today (5 November) lowered its forecasts for annual sales and earnings.
The Coors Banquet and Madri brewer pointed to soft demand and rising input costs.
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The new guidance came alongside a set of third-quarter financial results that included a fall in net sales and underlying net income.
Molson Coors expects its net sales to fall 1-2% on a constant-currency basis.
The Carling brewer’s previous guidance for net sales was “flat, plus or minus 1%”.
Molson Coors’ forecasts also cover the metrics of “underlying income before income taxes” and “underlying earnings per share”.
The new guidance projects the company’s underlying income before income taxes will fall 21-24% in 2026, excluding the impact of exchange rates. Molson Coors had previously forecast a 15-18% decline.
The company expects its underlying earnings per share to drop 16-19% this year, compared to its previous forecast of 11-15%.
Third-quarter net sales fell 1.6% to $2.93bn amid a decline in volumes.
Molson Coors’ underlying net income slid 17.7% to $272.2m.
The company said its cost-of-goods-sold per hectolitre increased 8.6% amid higher input and logistics costs.
The jump in costs included around $30m from Midwest Premium pricing, which tracks aluminium costs.
In February, CEO Rahul Goyal, promoted in October from chief strategy officer, unveiled Horizon 2030, which he described as “a blueprint of how we get our business back to growth”.
He said today: “Since launching Horizon 2030 earlier this year, we’ve been laying important groundwork for long-term success by building the portfolio, capabilities, routines, and operating discipline needed to perform more consistently across the business.
“We’ve taken decisive actions intended to strengthen our share trend performance, accelerate our portfolio transformation, simplify our cost structure, and return cash to shareholders. We believe our strategy is on the right track, but these outcomes are not yet scaled enough to offset the headwinds that we experienced in the third quarter.”
Bernstein analyst Nadine Sarwat said the 2.9% fall Molson Coors reported in its volumes in the Americas was less steep than the market had expected.
“However, the big negative surprise was gross margin, missing consensus by circa 200 basis points and us by around 280 basis points, largely due to cost inflation and a $30m impact from Midwest Premium. This was partially offset with fixed cost management, leading to underlying EPS of $1.45, in-line with consensus,” she added.
