Molson Coors Beverage Co.’s stock fell 4% Tuesday, after the beer company’s second-quarter sales fell slightly short of consensus, even as it picked up market share from the boycott of Bud Light.
That shortfall weighed against better-than-expected profit and raised guidance for the full year. Molson
TAP,
is expected to continue to gain market share from rival Anheuser-Busch InBev SA
BUD,
whose Bud Light has been the subject of a conservative-led boycott following the use of transgender influencer in its marketing, sending beer drinkers to Molson Coors for light-beer alternatives.
On a call with analysts, Chief Executive Gavin Hattersley said the company’s revitalization plan and changed approach to marketing over the past three years have made it more nimble, and thus better-placed to take advantage of Bud’s market-share losses.
“So while we didn’t plan (for) our largest competitor’s largest brand (to) decline (in) volume by nearly 30% during the quarter, if this had happened in 2019, we would surely not have seen the sales benefit that we did in 2023 or even been able to meet the demand,” he said, according to a FactSet transcript.
Coors Light and Miller Lite combined were 50% bigger than Bud Light in the quarter measured by total industry dollars and 30% bigger than Modelo Especial, one of Constellation Brands Inc.’s
STZ,
beers.
Modelo Especial has become the bestselling beer in the U.S. amid the Bud Light fallout.
See also: Constellation Brands can get beer margins back to 40% without raising prices, analyst says
“And to put that further in perspective, in the second quarter of last year, Bud Light was bigger than Coors Light and Miller Lite. combined,” he said.
The company posted net income of $342.4 million, or $1.57 a share, for the quarter, up from $47.3 million, or 22 cents a share, in the year-earlier period. Adjusted per-share earnings came to $1.78 to beat the $1.64 FactSet consensus.
Sales rose 11.8% to $3.266 billion, below the $3.288 billion FactSet consensus.
Sales were boosted by higher pricing and favorable sales mix as well as higher financial volumes. That’s after Molson raised prices twice last year by an average of 5%, which is more than typical in a single year.
Read also: Boston Beer stock rallies, as Twisted Tea makes up for flat seltzer demand in Q2
The company is now raising its full-year guidance to reflect the strength of its core brands in the U.S., while also being mindful of softness for beer overall in the current inflationary environment.
It expects sales to rise by a high single-digit percent, versus prior guidance of a rise in the low single-digits.
The momentum in its brands has continued in the third quarter, said Hattersley, and the company is planning to invest $100 million in extra marketing to retain market share gains.
Already, its top 20 retailers are making more shelf space for Molson products in their Fall reset and some have already started to do so, said the executive.
The stock has gained 35% in the year to date, while the S&P 500
SPX,
has gained 19.5%.
See also: Bud Light boycott has been good for Molson Coors, but gains aren’t set in stone, analysts say
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