Bottles of Coors beer are displayed on a shelf at a liquor retailer in Fairfax, California.
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Molson Coors Beverage’s Miller Lite and Coors Mild posted gross sales development in 2021 as the corporate’s turnaround plan begins to bear fruit.
Declining beer consumption within the US has put breweries like Molson Coors underneath strain. Miller Lite and Coors Mild are the corporate’s two largest manufacturers. CEO Gavin Hattersley credited the beers’ advertising campaigns for his or her robust efficiency.
“On a quantity foundation, we have been slightly below,” Hattersley mentioned in an interview. The metric, quantity, removes the consequences of foreign money and worth adjustments. “We acquired very near the precise development of those manufacturers in 2021, principally [hurt] – for my part – due to the omicron surge within the final six weeks of the yr.”
After the corporate launched its fourth-quarter outcomes, shares of Molson Coors rose as a lot as 4% in premarket buying and selling. Nevertheless, it has since misplaced most of these beneficial properties because the broader market reacts to tensions between Russia and Ukraine. The inventory was final buying and selling down lower than 1%.
For the primary time in additional than a decade, the proprietor of Miller Lite reported annual gross sales development reasonably than contraction. Molson Coors internet gross sales rose 6.5% in 2021 to $10.28 billion. It follows a troublesome 2020, when the corporate’s internet gross sales fell 8.7% as pandemic restrictions weighed on demand.
Hattersley credited the corporate’s turnaround plan, which incorporates increasing its portfolio past beer, specializing in greater high quality drinks and phasing out manufacturers that weren’t promoting. Greater than a yr in the past, the corporate even swapped “brewing” for “beverage” in its title as a part of its technique change.
Within the fourth quarter, Molson Coors internet gross sales rose 14.2% to $2.62 billion, beating Refinitiv’s estimate of $2.55 billion. However quarterly earnings got here underneath strain as freight and uncooked materials prices rose. Molson Coors reported adjusted earnings per share of 81 cents, falling wanting Wall Avenue’s estimate of 86 cents per share.
“We’re not resistant to them, identical to everybody else,” Hattersley mentioned, including that the corporate is hedging in opposition to greater enter prices.
He expects inflation to proceed to rise in 2022. To fight greater prices, Molson Coors hiked costs in January and February forward of its traditional spring price hikes. Hattersley mentioned the value will increase have been additionally barely greater than regular.
Hattersley mentioned the Omicron variant had met drink demand in bars and eating places within the UK, Canada and the US by January. The month additionally noticed weaker demand as a consequence of Dry January, a problem that includes abstaining from alcohol for the entire month.
For 2022, Molson Coors is forecasting internet gross sales development within the mid-single digits, excluding foreign money fluctuations. And earlier than earnings and taxes and excluding foreign money adjustments, the corporate is forecasting non-GAAP earnings development within the excessive single digits. The corporate additionally elevated its quarterly dividend by 12% to 38 cents per share.
The corporate additionally mentioned it’s concentrating on $1 billion in gross sales by 2023 for its rising development enterprise, which incorporates delicate drinks, craft beers and Latin America. The non-alcoholic portfolio consists of Zoa, an power drink created by actor and former wrestler Dwayne Johnson; La Colombe ready-to-drink espresso; and CBD-infused drinks offered in Canada.