Molson Coors Earnings: Lower Guidance Amid Industry Softness, Still Bullish on Premiumization
- Hardik Shah
- Aug 5
- 3 min read
TL;DR
• Revenue Strength:Q2 net sales declined 2.6% in constant currency, driven by volume declines despite favorable pricing and mix.
• Margin Trends:Margins were pressured by volume deleverage and a spike in aluminum costs (Midwest Premium), though MG&A savings helped.
• Forward Outlook:Management cut full-year guidance for revenue and EPS but reaffirmed free cash flow at $1.3B.
Business Overview
Molson Coors Beverage Company (NYSE: TAP) is a leading global brewer with a diverse beverage portfolio across beer, flavored alcohol beverages, spirits, and non-alcoholic drinks. Its core power brands include Coors Light, Miller Lite, and Coors Banquet. Above-premium offerings include Madri Excepcional, Blue Moon, Peroni, and Fever-Tree. The company operates through two segments—Americas and EMEA & APAC—serving markets across North America and Europe with a mix of in-store retail, on-premise, and convenience channels.
Molson Coors Earnings Q2'25
Net Sales: $3.2B, down 2.6% in constant currency
Financial Volume: Down 7.0%; Brand Volume down 5.1%
GAAP Net Income: $428.7M (EPS: $2.13, +4.9% YoY)
Underlying EPS (Non-GAAP): $2.05, up 6.8%
COGS per hl: Up 7.3% (reported), driven by premium mix and inflation
Underlying Income Before Taxes: $531.5M, down 0.8% in constant currency
“We continue to view the incremental softness in the industry performance this year as cyclical,” said CEO Gavin Hattersley, pointing to macroeconomic pressures, aluminum cost inflation, and reduced buyer participation, especially among lower-income and Hispanic consumers.
Forward Guidance
Net Sales: Now expected to decline 3–4% vs. prior low-single-digit decline
EPS (Non-GAAP): Now expected to decline 7–10% vs. prior low-single-digit growth
Pre-Tax Income: Decline of 12–15% (vs. previous low-single-digit drop)
Free Cash Flow: Reaffirmed at $1.3B ±10%
Risks & Opportunities:
Macro softness in U.S. and Europe
Unhedged exposure to Midwest aluminum premium (+180% YoY)
Contract brewing volume declines (e.g., Pabst, Labatt)
Premiumization gains in Canada, EMEA, and niche U.S. brands like Peroni and Blue Moon Extra
Operational Performance
Coors Banquet gained 15% in distribution and achieved its 16th consecutive quarter of share growth
Core power brands (Coors Light, Miller Lite, Banquet) retained most of their 2024 shelf space gains
Shipment trends: Company shipped ahead of STRs (Sales to Retail), reversing a Q1 lag
Segment Performance Snapshot:
Americas: Net sales down 2.8%, but underlying income up 5.4% on pricing/mix gains
EMEA & APAC: Net sales up 3% (favorable FX), but underlying income down 17.9% due to lower volumes and U.K. regulatory costs
Market Insights
U.S. beer industry down ~5% in Q2, contrary to prior expectations for improvement
Consumers continue shifting to larger packs and singles vs. mid-size SKUs
Promotions intensified in summer months but are expected to normalize
No significant trade-down to lower-tier brands despite value-seeking behavior
Consumer Behavior & Sentiment
Persistent pressure among lower-income and Hispanic consumers
Overall alcohol basket share steady, but occasions are fewer
On-premise (bars/restaurants) showed improvement, especially for Blue Moon Belgian White, which saw a 6-point improvement in STR trends from Q1 to Q2
Strategic Initiatives
Premiumization: Madri now #2 world lager in the UK; Peroni growing double digits in the U.S.; Blue Moon Extra and Topo Chico MAX gaining shelf space
Innovation: Continued rollout of Blue Moon Non-Alc, Simply Bold, and other high-ABV products
Non-Alcoholic Expansion: Integration of Fever-Tree nearly complete; now a top contributor to Americas mix
Brand Stability: Blue Moon SKUs converted to 12-packs (from 15) to improve margins despite short-term volume hit
“Fever-Tree is now our highest NSR per hectoliter brand aside from full-strength spirits… and has already contributed meaningfully,” said Hattersley.
Capital Allocation
Dividends: $0.47/share declared; dividend raised annually since 2021
Buybacks: 9.4% of Class B shares repurchased under $2B plan—55% of capacity used in under 2 years
Debt: Net debt to EBITDA at 2.41x; up from 2.13x YoY
Capex: On track for $650M in FY25 investments
“It has allowed us to return $500 million to shareholders for the first half of the year,” said CFO Tracey Joubert, citing disciplined allocation despite macro turbulence.
The Bottom Line
Despite cutting full-year guidance due to persistent macro softness, Molson Coors remains committed to long-term growth through premiumization, innovation, and strategic investments. Strength in core brands, strong cash generation, and active capital returns position the company to rebound when consumer sentiment improves.
Investor Watchlist:
U.S. beer volume recovery in Q3/Q4
Midwest Premium volatility
Continued traction of Peroni, Madri, and Fever-Tree
On-premise momentum and seasonal trends
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