Molson Coors (TAP) Q4 2021 earnings miss estimates, sales beat
Fairfax liquor store displays Coors beer bottles.
Justin Sullivan | Getty Images
The U.S.’s declining beer consumption has placed pressure on Molson Coors brewers. Miller Lite is the largest brand and Coors Light is its second. Gavin Hattersley CEO credited beers’ strong performance to their marketing campaigns.
Hattersley explained in an interview, “On a quantity basis, we were narrowly below.” Volume is a metric that removes the effects of price and currency changes. “We were very close to growing the brands in 2021. [hurt] — in my view — because of the surge of omicron in the last six weeks of the year.”
Following the reporting of its results, fourth-quarter resultsPremarket trading saw shares of Molson Coors rise as high as 4%. But, most of its gains have since been lost. as the broader marketReacts to tensions between Russia and Ukraine. Stock traded up by less than 1 percent in recent trading.
Miller Lite’s owner, for the first time since more than a decade now reported an increase in annual revenue rather than decreasing sales. In 2021, Molson Coors net sales rose 6.5% and reached $10.28 trillion. The increase comes after a tough 2020 in which the net sales of Molson Coors fell 8.7% because of pandemic restrictions.
Hattersley gave credit to the company for its turnaround plan which includes expanding its beer portfolio, focusing more on high quality beverages, and eliminating brands that aren’t in demand. As part of its strategy shift, Hattersley said that the company had changed its name from “Brewing”, to “Beverage”, more than one year ago.
Molson Coors net sales increased 14.2% to $2.62 Billion in the fourth quarter. This beats Refinitiv’s estimates of $2.55 Billion. The company’s quarterly profit was under threat as commodities and freight prices rose. Molson Coors’ adjusted earnings per share were 81cs. This was less than Wall Street expected at 86c per share.
Hattersley stated that “we’re not immune to them” and added that they do hedge against rising input costs.
Inflation is expected to continue rising through 2022, he says. Molson Coors hiked prices in January, February to offset rising costs. It did this earlier than usual during springtime. Hattersley stated that the prices were slightly higher than usual.
Hattersley indicated that the demand for omicron-based alcohol in bars and restaurants throughout the United Kingdom and U.S. was high through January. Dry January caused a decrease in demand for this month. Dry January is an alcohol-free challenge.
Molson Coors expects net sales to grow in the middle-single figures by 2022. This excludes currency fluctuations. The company is also predicting non GAAP income growth in high-single figures, even before income taxes and currency fluctuations. It also increased its quarterly dividend from 12% to 38cs per share.
According to the company, it has already achieved its $1 billion goal for emerging growth, which also includes craft beer and non-alcoholic drinks. The company’s non-alcoholic products include Zoa, an energy beverage created by Dwayne Johnson (an actor who used to wrestle), La Colombe ready–drink coffee and CBD-infused beverages sold in Canada.