Molson Coors Beverage Company Reports Mixed Q1 2025 Results

Molson Coors Beverage Company, one of the world’s leading beer and beverage companies, has reported its financial results for the first quarter of 2025. The company’s performance was mixed, with declines in net sales and profitability offset by some positive trends.

Financial Overview

For the three months ended March 31, 2025, Molson Coors reported net sales of $2,304.1 million, down 11.3% from the same period in 2024. This decline was driven by a 14.3% decrease in financial volume, partially offset by a 3.9% improvement in price and sales mix.

Cost of goods sold decreased 11.0% to $1,453.2 million, but cost of goods sold per hectoliter increased 3.8% due to volume deleverage, unfavorable mix, and cost inflation. Marketing, general, and administrative (MG&A) expenses decreased slightly by 0.2% to $653.2 million.

As a result, operating income declined 40.7% to $186.3 million, and net income attributable to Molson Coors fell 41.8% to $121.0 million. Earnings per diluted share decreased 39.2% to $0.59.

The company’s effective tax rate for the quarter was 21%, flat compared to the prior year period.

Segment Performance

The company operates in two main segments: Americas and EMEA&APAC.

Americas Segment The Americas segment, which includes the U.S., Canada, and Latin America, saw net sales decrease 12.3% to $1,881.8 million. This was driven by a 15.6% decline in financial volume, partially offset by a 4.1% improvement in price and sales mix.

Income before income taxes for the Americas segment declined 34.7% to $209.3 million, primarily due to the lower volumes, cost inflation, and higher MG&A expenses, including $30 million in integration and transition costs related to the Fevertree USA, Inc. acquisition.

EMEA&APAC Segment The EMEA&APAC segment, which covers Europe, the Middle East, Africa, and Asia-Pacific, reported a 6.0% decrease in net sales to $427.3 million. Financial volume declined 9.7%, but this was partially offset by a 4.8% improvement in price and sales mix.

The EMEA&APAC segment recorded a loss before income taxes of $19.2 million, compared to a loss of $11.0 million in the prior year period. The higher loss was mainly due to the lower volumes, partially offset by reduced MG&A expenses and favorable foreign currency impacts.

Unallocated Segment The Unallocated segment, which includes certain financing and other corporate activities, reported an operating loss of $33.8 million, an improvement from a $44.2 million loss in the prior year. This was primarily due to favorable changes in the fair value of commodity derivatives, partially offset by higher net interest expense and lower pension and OPEB non-service benefit.

Liquidity and Capital Resources

As of March 31, 2025, Molson Coors had total cash and cash equivalents of $412.7 million, down from $969.3 million at the end of 2024. The decrease was mainly due to capital expenditures, dividends, share repurchases, the Fevertree Drinks plc investment, and the Fevertree USA, Inc. acquisition, partially offset by other financing activities.

The company has a $2.0 billion multi-currency revolving credit facility, of which the full $2.0 billion was available as of March 31, 2025. Molson Coors also has access to commercial paper programs and overdraft facilities for additional liquidity as needed.

Net cash used in operating activities was $90.7 million for the quarter, compared to $25.4 million provided in the prior year period. This change was primarily due to lower net income and the $60.6 million payment to resolve the Keystone litigation case, partially offset by favorable changes in working capital.

Capital expenditures for the quarter were $130.6 million, down from $143.9 million in the prior year period, as the company continues to prioritize optimizing returns on invested capital.

Outlook and Risks

Molson Coors faces several challenges and risks that could impact its future performance. These include macroeconomic conditions, industry softness, cost inflation, and the competitive landscape, particularly in the EMEA&APAC segment.

The company’s planned closure of certain U.S. craft breweries and related restructuring costs could also weigh on profitability in the near term. Additionally, the integration and transition costs associated with the Fevertree USA, Inc. acquisition may continue to impact MG&A expenses.

On the positive side, the company’s focus on premiumization, increased net pricing, and cost savings initiatives could help offset some of the headwinds. The favorable fair value adjustment of the Fevertree Drinks plc investment also provided a boost to the company’s non-operating income.

Overall, Molson Coors’ first-quarter 2025 results reflect the challenges facing the beer and beverage industry, but the company remains committed to executing its strategic priorities and driving long-term shareholder value.