Molson Coors Beverage Co. (NYSE:TAP) recently unveiled its third-quarter financial outcomes, presenting a complex picture to investors. Both the adjusted earnings per share and overall sales figures fell short of market expectations. This performance prompted the company to revise its financial projections for the entire year, signaling a more conservative outlook for the period ahead.
During the third quarter, Molson Coors' adjusted earnings per share reached $1.67, which was below the analyst consensus of $1.71. Concurrently, the company's quarterly sales amounted to $2.973 billion, missing the anticipated $3.029 billion. This downturn was primarily attributed to a 2.3% decrease in net sales, driven by reduced financial volumes. However, this decline was partially mitigated by favorable pricing strategies, an improved sales mix, and positive currency exchange rates. On a constant-currency basis, net sales experienced a more significant 3.3% drop.
Delving deeper into the metrics, the interplay of pricing adjustments and product sales mix positively influenced net sales by 2.7%. This was largely due to a more favorable mix of products sold and an increase in net pricing. Furthermore, net sales per hectoliter saw a 4.0% increase on a reported basis, and a 2.9% rise when accounting for constant currency. Conversely, financial volume for the quarter decreased by 6.0%, a result of lower shipments across both the Americas and the EMEA & APAC regions. Brand volume also saw a decline, falling by 4.5% overall, with the Americas segment experiencing a 4.4% drop and the EMEA & APAC segment a 5.0% reduction.
The company's gross profit for the quarter stood at $1.173 billion, a decrease from $1.202 billion in the previous year. Molson Coors ended the quarter with $950.2 million in cash and equivalents, and inventories, net, totaled $820.6 million. Long-term debt was reported at $3.884 billion, a notable reduction from $6.113 billion. The underlying (Non-GAAP) EBITDA for the quarter was $665.4 million, also lower than the $692.3 million recorded previously.
Rahul Goyal, who assumed the role of president and CEO on October 1, acknowledged the existing challenges and opportunities. He highlighted the swift actions taken to restructure the leadership team and the Americas operations, aiming for a more streamlined and responsive organization. Goyal expressed confidence in the company's brand portfolio and strategic plans, noting that while immediate results might not be visible, these changes are geared towards improving reinvestment and shareholder returns. Tracey Joubert, the chief financial officer, echoed these sentiments, explaining that the quarterly financial results aligned largely with expectations, citing industry competition and commodity pricing pressures as key factors, though offset by lower incentive compensation costs.
Looking ahead, Molson Coors adjusted its 2025 guidance. The company narrowed its adjusted EPS forecast to $5.36, a slight reduction from the previous range of $5.36–$5.54, falling below the analyst estimate of $5.41. Similarly, the 2025 sales outlook was trimmed to $11.162 billion, down from the prior range of $11.162–$11.278 billion, also missing the $11.244 billion estimate. Following these announcements, TAP shares experienced a slight decline of 0.79%, trading at $42.90 in premarket activity.