Molson Coors on Thursday forecast lower full-year sales, suggesting that higher prices are denting demand for the company’s drinks, especially in the US.
The company’s shares were down 2% before the bell as demand fell for its brands such as Blue Moon and Coors Light.
Molson Coors has been consistently raising prices to offset higher production costs – similar to peers such as Constellation Brands – even as some expenses have started to ease.
The company’s volumes in the US were also hit due to the winding down of a contract brewing agreement.
It now expects 2024 net sales to be down about 1% – compared with its prior forecast of a low single-digit percentage increase.
While customers stretched their budgets to purchase the company’s products up until recently despite the price hikes, the downbeat forecast indicates sticky inflation has forced them to rethink their spending.
Molson Coors posted a 5.4% fall in American brand volumes during the third quarter, primarily driven by a drop in sales of its premium brands as they became more expensive following attempts to pass on rising costs to customers.
The company’s quarterly net sales fell 7.8% to $3.04 billion, compared with the average analyst estimate of $3.13 billion, according to data from the London Stock Exchange Group.
On an adjusted basis, Molson Coors earned $1.80 per share, beating estimates of $1.67.
Separately, the company said it was buying a majority stake in ZOA Energy – a drinks company co-founded by Hollywood actor Dwayne Johnson – as Molson Coors looks to expand its portfolio beyond alcoholic beverages.
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