The steeper-than-expected decline in US beer sales will abate in the months ahead, Molson Coors Beverage Co.’s CEO has suggested.
Yesterday (8 May), the Coors Light brewer cut its sales and profit forecasts for 2025, pointing to “the impacts of the global macroeconomic environment on the beer industry and consumer trends”.
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The new forecasts came as the company reported an 11.3% fall in first-quarter net sales to $2.3bn. Volumes in the US declined, with Molson Coors saying macroeconomic conditions had led to “industry softness”.
Molson Coors first-quarter results – which also included lower profits – surprised some on Wall Street and, speaking to analysts after the numbers were announced, the company’s management faced a series of questions about its thoughts on how the US beer industry might fare during the rest of 2025.
CEO Gavin Hattersley said Molson Coors estimated the US beer industry was “down around 5%” in the first quarter.
“Within the guidance that we are now revising, we have assumed that the industry will be better than what we’ve seen at the start of the year, which was down around that 5% in Q1,” Hattersley said. “We do expect over the balance of the year that we’ll see the similar trend lines that we’ve seen over the last few years.”
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By GlobalDataHe added: “Obviously, one quarter doesn’t a year make. We talked about the consumer confidence challenges in the macroeconomic environment and, obviously, we can’t predict when that will end but they are certainly cyclical and they will end. The timing of that is obviously uncertain.”
Molson Coors reports its financial results across two divisions – Americas and EMEA & APAC.
In the Americas, the company said its “financial volumes” decreased 15.6% in the first quarter amid a 7.4% decline in “brand volumes”.
It also pointed to the cycling of the impact of a strike in Texas last year when distributors built inventories, as well as the end of contract-brewing deals in the US and Canada.
Molson Coors said the fall in brand volumes was driven by the “softness” in the industry, as well as the brewer lapping “double-digit growth in our core power brands” a year earlier.
Hattersley added: “It’s certainly clear to us that the incremental softness that we’ve seen in the industry is macro driven. We’re taking actions and steps to protect our profitability in the near term but continuing to support our brands through that.
“The timing of these macro-driven trends are obviously not something that we can forecast. What we do know though is that it’s cyclical and our expectation is over the balance of the year that we’ll see a move back to industry trends we’ve experienced over the last few years. Whilst we don’t have a public forecast in industry, obviously our guidance is built on our own forecasts internally as to where we see the industry landing for the full year.”
UK industry had “soft start”, Molson Coors says
The net sales from Molson Coors’ EMEA & APAC division dropped 6% in the first quarter. The company’s financial and brand volumes both feel more than 9%.
Molson Coors pointed to “competitive pressures” across the regions and, speaking to analysts, Hattersley said the industry in the UK “did have a soft start to the year”.
He added: “It did continue the trend that we’ve seen in consumer demand in the UK last year with the market being down on a volume basis. I think as we’ve said consistently now for a few quarters – and this hasn’t changed – is the market has been increasingly competitive.”
However, Hattersley, who plans to step down as Molson Coors CEO by the end the year, said competition was picking up in the UK. “There has been a higher promotional intensity across both channels, the on and the off premise,” he said.
“If you go across into central and eastern Europe, the beer industry remains sluggish. Again, it’s driven by a decline in consumer confidence, partly because of the macroeconomic environment which exists there as well but the added negative of global political and economic tensions, which have escalated since last year. We are seeing higher promotional pressures across most of the markets we’re operating in central and eastern Europe but we remain optimistic about the growth potential of our business and we’re executing against our plans.”
Molson Coors has recently launched its Madri beer in Bulgaria and Romania. It plans to take the Coors brand into Hungary.
Robert Moskow, an analyst at TD Cowen, said the US investment bank had lowered its target for Molson Coors’ shares off the back of the results and the new forecasts.
“The 2025 outlook is now for sales down low-single-digit and earnings per share up low-single-digit but we wonder if this is conservative enough,” he said.
“We think the company systemically overestimates long-term U.S. beer category at -1 to -2%. Our data indicates annual category growth of -2.7% for the past three years on a consumption basis.”
