Molson Coors Beverage Q3 Earnings Call Highlights

Key Points

• Molson Coors cut its 2026 outlook, now expecting constant-currency sales to decline 1%–2%, pretax income to fall 21%–24%, EPS to drop 16%–19%, and free cash flow of about $1 billion.
• Third-quarter sales fell 1.2% to $2.9 billion and EPS declined 12.6% to $1.46, as a weaker beer market and higher costs weighed on results. Cost of goods sold per hectoliter rose 8.1%, with the Midwest Premium alone adding about $30 million in quarterly costs.
• U.S. share trends improved from the prior quarter, supported by Coors Light and Miller Lite, while Banquet and Beyond Beer brands including Monaco showed strength. The company is advancing a $450 million cost-savings program and investing in its brands and supply chain.

Molson Coors Beverage NYSE: TAP lowered its full-year 2026 sales, profit and cash flow outlook after a weaker beer market and rising freight, fuel and aluminum-related costs weighed on its third-quarter results.

Third-quarter net sales revenue fell 1.2% to $2.9 billion from a year earlier, while underlying pretax income declined 17.4% to $349 million. Underlying earnings per share fell 12.6% to $1.46, Chief Financial Officer Tracey Joubert said on the earnings call.

President and CEO Rahul Goyal said the company had seen improvements in U.S. beer share trends and growth in parts of its portfolio, but external pressures intensified during the quarter. Those included U.S. category softness, increased promotions in the U.K. and higher U.S. freight and fuel costs.

“We do expect some of these headwinds to persist into 2027, but our team has been taking actions to reduce their impact,” Goyal said.

Revised 2026 outlook

Molson Coors now expects full-year net sales revenue to decline 1% to 2% in constant currency, compared with its previous forecast of approximately flat sales, plus or minus 1%. The company assumes soft volume trends in the U.S. and its EMEA and Asia-Pacific business, along with U.K. promotional pressure, will continue through the end of the year.

The company also lowered its other forecasts:

• Underlying pretax income is expected to decline 21% to 24%, compared with a prior forecast for a 15% to 18% decline.
• Underlying earnings per share are expected to fall 16% to 19%, versus the previous range of an 11% to 15% decline.
• Underlying free cash flow is projected at $1 billion, plus or minus 10%, down from $1.1 billion, plus or minus 10%.

Joubert said the reduced free cash flow outlook was mainly driven by the lower pretax income forecast. The company continues to expect an annual net price increase of 1% to 2% in North America and nine months of revenue contribution from Monaco.

Management plans to provide formal 2027 guidance on its fourth-quarter call. Goyal said the company would consider pricing by market and brand while seeking to remain competitive.

Costs pressure profitability

Underlying cost of goods sold per hectoliter increased 8.1% in the third quarter, mainly because of higher Midwest Premium and aluminum costs, tighter freight markets and fuel prices, Joubert said. The Midwest Premium alone added approximately $30 million in year-over-year costs during the quarter, accounting for roughly 40% of the decline in profit.

For the full year, the company continues to expect the Midwest Premium to cost approximately $130 million more than in 2025. Joubert said the increase represents roughly 10 percentage points of impact on underlying pretax income, or more than 50 cents per share at the midpoint of the 2026 earnings forecast.

Molson Coors has some hedge coverage for the Midwest Premium in 2027, but Joubert said the exposure is difficult and expensive to hedge and is never fully covered. She added that the company had to purchase some logistics services at higher spot-market rates despite having long-term contracts.

Goyal said the company is progressing on its $450 million cost savings program and investing in supply-chain capabilities, including greater control over its aluminum can supply. Those projects have multiyear timelines, he said.

Share trends and portfolio priorities

The U.S. beer industry declined more than 4% in the third quarter, according to company estimates. Joubert said Molson Coors’ U.S. volume share trend improved by nearly 20 basis points from the second quarter, although Goyal said the company still aims to stabilize its core brands and return them to share growth.

Coors Light and Miller Lite were the biggest drivers of the improvement in core beer share trends, Goyal said. Banquet recorded its 21st consecutive quarter of volume share growth. The company plans further investment behind Banquet, new creative work for Coors Light and a national launch of Coors 0.0.

Management also highlighted strength in its Beyond Beer portfolio. Goyal said Monaco posted its highest quarterly net sales revenue in the third quarter and continues to perform ahead of initial expectations. Fever-Tree has benefited from increased commercial support and distribution, he said.

In the U.K., the company has introduced Carling Black Label and refreshed the Carling brand as it responds to consumer weakness and a competitive promotional environment. Goyal said the company had taken commercial actions to compete, while noting that November and December are important months for the business.

Capital returns and distributor dispute

Molson Coors returned $273 million to shareholders through dividends and $250 million through repurchases year to date, Joubert said. Its net debt-to-underlying EBITDA ratio was 2.53 times at quarter-end, modestly above its target of below 2.5 times.

Joubert also said some brand owners have sought to terminate distribution agreements with Coors Distributing Company, Molson Coors’ wholly owned Colorado distributor. The distributor is pursuing legal action to enforce its rights. The company does not expect a material impact on 2026 results; any 2027 effect will depend on the outcome of the litigation.

About Molson Coors Beverage (NYSE:TAP)

Molson Coors Beverage Company is a global beverage company best known for brewing and marketing beer. Its portfolio includes widely recognized brands such as Coors, Coors Light, Miller Lite, Miller High Life, Molson Canadian, Carling, Blue Moon, Staropramen and Peroni Nastro Azzurro, along with hard seltzers, flavored alcoholic beverages and other adjacent products.

The company serves consumers through a broad network of breweries, distributors and retailers across North America, Europe and other international markets.

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