Latest news with #GavinHattersley
Yahoo
a day ago
- Business
- Yahoo
TAP Q1 Earnings Call: Molson Coors Addresses Macroeconomic Pressures and Strategic Adjustments
Beer company Molson Coors (NYSE:TAP) fell short of the market's revenue expectations in Q1 CY2025, with sales falling 11.3% year on year to $2.3 billion. Its non-GAAP EPS of $0.50 per share was 37.2% below analysts' consensus estimates. Is now the time to buy TAP? Find out in our full research report (it's free). Revenue: $2.3 billion (11.3% year-on-year decline) Adjusted EPS: $0.50 vs analyst expectations of $0.80 (37.2% miss) Operating Margin: 8.1%, down from 12.1% in the same quarter last year Sales Volumes fell 15.6% year on year (5.7% in the same quarter last year) Market Capitalization: $10.68 billion Molson Coors' latest quarter was defined by pronounced declines in sales volumes and operating margins amid a challenging macroeconomic environment. Management attributed the year-on-year drop in financial results to softer consumer demand, ongoing macro volatility, and expected headwinds such as the end of contract brewing agreements and one-time integration costs related to the Fever-Tree partnership. CEO Gavin Hattersley highlighted that the U.S. beer market, in particular, faced larger-than-anticipated declines in consumer confidence, which weighed heavily on consumption trends. While operational disruptions like last year's Fort Worth brewery strike and changes in shipment timing also played a role, Hattersley emphasized, "The magnitude of the impacts of the macroeconomic environment and industry has been much greater so far this year than we had expected." Looking ahead, Molson Coors is adjusting its strategy to navigate ongoing uncertainty in consumer demand and external pressures. Management now expects a low single-digit decline in revenue for the year and is taking steps to reduce capital expenditures and discretionary costs. CFO Tracey Joubert explained that the company's updated outlook is shaped by industry softness and continued macro challenges but is supported by ongoing premiumization initiatives, new product launches, and incremental contributions from partnerships like Fever-Tree and ZOA. Hattersley noted, "These are uncertain times, but we believe we have the right strategy and a healthy balance sheet and strong cash generation to continue to execute it, while continuing to return cash to shareholders." Management cited macroeconomic headwinds, planned operational changes, and a focus on premiumization as primary factors influencing the quarter's results and near-term outlook. Macroeconomic pressures dominate: Management repeatedly referenced the impact of volatile consumer confidence and global economic uncertainty, which led to weaker-than-expected demand across key markets. Hattersley noted that the U.S. beer market experienced a larger decline than anticipated, with the University of Michigan Consumer Sentiment Index dropping sharply during the period. Contract brewing exits weigh on volume: The conclusion of contract brewing agreements with Pabst in the U.S. and Labatt in Canada resulted in a temporary volume headwind that pressured reported sales, though management expects mix and margin benefits in subsequent quarters as the portfolio shifts away from lower-margin contract production. Premiumization and brand investment: Molson Coors continued investing in its core "power brands" (Coors Light, Miller Lite, Coors Banquet) and highlighted growth in above-premium offerings, including the expansion of Peroni and the Blue Moon non-alcoholic line. The company stressed ongoing efforts to capture value from premiumization, aiming for more favorable brand and product mix. Fever-Tree integration and non-alcoholic expansion: The company's recent acquisition of U.S. rights to Fever-Tree and increased stake in ZOA energy drinks were described as strategic moves to expand the non-alcoholic business. Fever-Tree's addition was called 'immediately incremental' to Molson Coors' U.S. business, with management citing significant distribution upside. Disciplined cost management: Facing lower volumes and profitability, management prioritized cost savings by curtailing non-critical discretionary spending and reducing planned capital expenditures by $100 million, postponing projects not directly tied to cost savings or critical growth initiatives. Molson Coors' outlook for the coming quarters centers on cautious revenue expectations, a continued push for premiumization, and disciplined capital allocation in a volatile environment. Consumer demand uncertainty: Management expects near-term demand to remain pressured by macroeconomic factors but is not forecasting the steep declines seen in Q1 to persist throughout the year. Hattersley indicated that improvement is anticipated in the back half of the year, provided economic conditions stabilize. Premiumization and innovation focus: The company is prioritizing further premiumization of its portfolio in North America, EMEA, and APAC, with special attention on the rollout of Peroni, Blue Moon innovations, and the continued momentum of non-alcoholic offerings. Management views these initiatives as vital for margin recovery and long-term growth. Cost control and capital discipline: Molson Coors is tightening control over discretionary expenses and reducing capital expenditures, focusing investment on projects linked to productivity, cost savings, and critical brand support. The company reiterated its commitment to maintaining healthy free cash flow and returning capital to shareholders. In the coming quarters, our analysts will monitor (1) volume trends and consumer demand stabilization in North America and Europe; (2) the pace and effectiveness of premiumization strategies, especially for brands like Peroni, Blue Moon, and Fever-Tree; and (3) the execution of cost control measures and capital allocation discipline. Leadership transition progress and the impact of new product launches will also be key areas to watch. Molson Coors currently trades at a forward P/E ratio of 8.2×. In the wake of earnings, is it a buy or sell? Find out in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
11-05-2025
- Business
- Yahoo
US beer slowdown 'cyclical' and will ease, Molson Coors CEO says
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'. 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.' He 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.' 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.' "US beer slowdown 'cyclical' and will ease, Molson Coors CEO says" was originally created and published by Just Drinks, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
09-05-2025
- Business
- Yahoo
Molson Coors had its biggest earnings miss in 4 years because consumers are too worried by tariffs to drink
Molson Coors posted its worst earnings miss in four years as tariffs, inflation, and economic uncertainty hammered beer sales, prompting a sharp guidance cut, reduced spending, and a 7.8% drop in share price. Molson Coors posted its worst earnings miss in four years, sending shares tumbling as Americans say 'no thanks' to another round, spooked by President Trump's tariffs and a shaky economy. The Coors Light and Blue Moon brewer reported a brutal first quarter for 2025, with net sales plunging 11.3% to $2.3 billion, missing analyst estimates by nearly $100 million. The company's adjusted earnings per share crashed to $0.50, far below the $0.83 Wall Street expected, and net income dropped 41.8% to $121 million. The results fell 36% short of Wall Street estimates, marking its most significant miss since the 46% shortfall recorded in February 2021. Shares fell nearly 8% to $52.35 at Thursday's market open from $56.79 at the close on Wednesday, but recovered some of the losses to end the day at $54.26. With tariffs and inflation squeezing wallets, fewer Americans are reaching for a brew. CEO Gavin Hattersley, who plans to retire at the end of 2025, pointed directly to the mood on Main Street: 'Uncertainty around the effects of geopolitical events and global trade policy, including the impacts on economic growth, consumer confidence and expectations around inflation, and currencies has pressured the beer industry and consumption trends'. The company now expects annual sales to decrease by low single digits, a sharp reversal from its earlier forecast for modest growth. Hattersley elaborated: 'The macroeconomic environment and its broad effects on the beer industry and consumer, as well as competitive pressures in EMEA & APAC, impacted our financial results in the first quarter. The global macroeconomic environment is volatile. Uncertainty around the effects of geopolitical events and global trade policy, including the impacts on economic growth, consumer confidence and expectations around inflation, and currencies has pressured the beer industry and consumption trends.' The company says it is now postponing certain projects and reducing capital expenditure by $100 million, focusing only on 'significant cost savings or critical growth initiatives". Market watchers aren't impressed. "Amid leadership transition and lowered growth projections, the company seems adrift at a moment when strategic clarity is essential," said Zak Stambor, senior analyst at Emarketer, adding that Molson Coors "appears to have lost its footing." But Molson Coors' struggles are seemingly part of a broader slowdown hitting the beverage industry as tariffs and inflation make happy hour a luxury. Rival Constellation Brands also forecast downbeat sales and profit for fiscal 2026. To turn things around, Molson Coors is betting on premium brews and non-alcoholic drinks. 'We believe we have the right strategy and a healthy balance sheet and strong cash generation to continue to execute it, while continuing to return cash,' Hattersley told investors. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
08-05-2025
- Business
- Yahoo
Molson Coors Lowers Outlook, Will Cut Expenses on Fears About Consumer Spending
Molson Coors cut its 2025 outlook and will reduce expenses on concerns economic conditions will lead to less consumer spending. CEO Gavin Hattersley said the global macroeconomic environment is "volatile." The beermaker missed first-quarter profit and sales estimates as volumes Coors Beverage Company (TAP) shares sank Thursday after the beermaker slashed its outlook and planned to reduce spending on concerns economic conditions will lead consumers to spend less. The company behind its namesake beers, as well as Miller Lite and others, now sees full-year underlying earnings per share (EPS) increasing by a low-single-digit percentage, down from its previous estimate of a high-single-digit percentage. It expects sales to decline by a low-single-digit percentage versus the earlier guidance of a low-single-digit percent increase. CEO Gavin Hattersley called the global macroeconomic environment "volatile," and the change in expectations was driven by "uncertainty around the effects of geopolitical events and global trade policy, including the impacts on economic growth, consumer confidence and expectations around inflation, and currencies has pressured the beer industry and consumption trends." Hattersley added that in response, Molson Coors would be "reducing non-business critical discretionary spend and capital projects while continuing to support the medium and long-term health and growth objectives of the company." Hattersley also attributed the company's weaker-than-expected first quarter results to the macroeconomic environment along with "competitive pressures" in two markets: Europe, Middle East, and Africa, and Asia-Pacific. Molson Coors reported underlying EPS of $0.50, with sales tumbling 11% year-over-year to $2.30 billion. Both missed Visible Alpha consensus forecasts. Sales were dragged down by a 16% slump in financial volumes, which it explained was primarily because of "lower brand volumes, the cycling of a higher distributor inventory build in the prior year to mitigate the impact of the Fort Worth brewery strike that commenced in mid-February 2024 and an approximate 4% impact from lower contract brewing volume resulting from the exit of contract brewing arrangements in both the U.S. and Canada." Shares of Molson Coors Beverage Company fell 5% to their lowest level in three months. Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
08-05-2025
- Business
- Reuters
Molson Coors cuts forecasts as beer demand hurt by tariff-led recession worries
May 8 (Reuters) - Molson Coors (TAP.N), opens new tab cut its annual forecasts for sales and profit on Thursday, in anticipation of a hit to demand for its Coors and Miller beer brands as consumers cut back discretionary spending due to tariff-led recession worries. The company, which is in search of a new CEO, also missed market expectations for its first-quarter results, sending its shares down about 8% in early trading. U.S. consumers have been paring back on discretionary spending such as alcohol amid elevated prices, with flip-flops in U.S. trade policy stoking recession worries. Peer Constellation Brands (STZ.N), opens new tab had last month forecast downbeat sales and profit for fiscal 2026. "Uncertainty around the effects of geopolitical events and global trade policy, including the impacts on economic growth, consumer confidence and expectations around inflation and currencies, has pressured the beer industry and consumption trends," outgoing CEO Gavin Hattersley said. The beer maker said it was reducing non-essential spending and capital projects to help mitigate any challenges. "Amid leadership transition and lowered growth projections, the company seems adrift at a moment when strategic clarity is essential," said Zak Stambor, senior analyst at Emarketer, adding that Molson Coors "appears to have lost its footing." However, the company said it could face only minimal direct hit to costs from tariffs as the majority of its beer for the U.S. market is produced locally in its Colorado breweries. Molson Coors expects a low single-digit decline in annual net sales, compared with previous expectations of a low single-digit growth. It also sees a low single-digit increase in annual adjusted profit per share, compared with the prior view of a high single-digit increase. The company's net sales for the three months ended March 31 fell 11% to $2.30 billion, mainly due to the declines in its Americas segment. Analysts expected net sales of $2.41 billion, according to data compiled by LSEG. Molson Coors' adjusted first-quarter earnings per share of 50 cents also missed estimates of 83 cents.
