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MOLSON COORS BEVERAGE CO (TAP)·Q1 2025 Earnings Summary

Executive Summary

  • TAP’s Q1 2025 came in below Street: net sales $2.304B (-11.3% Y/Y) and underlying diluted EPS $0.50, driven by steep volume declines and deleverage; management cut 2025 top-line and profit guidance to a low single-digit decline on a constant-currency basis while trimming CapEx by $100M to $650M .
  • Volume was the pressure point: Americas financial volume -15.6% (U.S. brand volume -8.8%) with expected headwinds from cycling 2024 inventory build, exit of contract brewing (~4 pts to Americas financial volume), and one less trading day; price/mix remained positive (+3.9% consolidated; Americas NSR/hl +4.8%) .
  • Management reaffirmed underlying FCF at ~$1.3B ±10% and emphasized cost controls and prioritization of growth/productivity projects; net leverage at 2.47x, in line with the sub-2.5x target .
  • Narrative/catalysts: guidance reset (net sales/underlying PBT/EPS) and CapEx cut, retention of core-brand share gains, Fever-Tree U.S. commercialization ramp, and CEO retirement process (by YE25) .

What Went Well and What Went Wrong

What Went Well

  • Positive price/mix and NSR/hl: consolidated price/mix +3.9% and Americas NSR/hl +4.8% despite volume pressure; EMEA&APAC price/mix +4.8% with continued premiumization .
  • Core brands resilient; share retained: “Coors Light, Miller Lite and Coors Banquet have combined 15.4 volume share… up 1.9 share points since Q1’23… we have retained the collective unprecedented U.S. shelf space gains” .
  • Strategic premiumization/non-alc momentum: Fever-Tree U.S. partnership “adds real scale” (~500K hl in 2024) and is “incremental to our business”; distributors committed per RFP transition .

What Went Wrong

  • Volumes and deleverage: consolidated financial volume -14.3% and brand volume -8.0%; Americas financial volume -15.6% (U.S. brand volume -8.8%) with shipment timing, contract brewing exit (~4 pts), and one less trading day .
  • Cost per hl and opex headwinds: underlying COGS/hl +6.1% on deleverage/mix; MG&A included ~$30M Fever-Tree one-time transition/integration fees (to be recovered over time) .
  • EMEA&APAC softness/competition: financial volume -9.7% and underlying loss widened; region cited “heightened competitive landscape” .

Financial Results

Consolidated results vs prior quarters

MetricQ3 2024Q4 2024Q1 2025
Net Sales ($USD Billions)$3.043 $2.736 $2.304
Gross Profit ($USD Billions)$1.203 $1.038 $0.851
Operating Income ($USD Millions)$451.2 $388.1 $186.3
GAAP Diluted EPS ($)$0.96 $1.39 $0.59
Underlying Diluted EPS ($)$1.80 $1.30 $0.50
Underlying PBT ($USD Millions)$479.5 $341.0 $131.1
Underlying EBITDA ($USD Millions)$692.3 $558.5 $353.3
Financial Volume (m hl)20.629 18.585 15.409

Q1 2025 actual vs prior year and vs estimates

MetricQ1 2024Q1 2025 ActualQ1 2025 Consensus
Net Sales ($USD Billions)$2.596 $2.304 $2.394*
Underlying Diluted EPS ($)$0.95 $0.50 $0.796*
GAAP Diluted EPS ($)$0.97 $0.59 —
  • Consensus source: S&P Global; EPS estimates n=16; Revenue estimates n=11. Values retrieved from S&P Global.
  • Underlying EPS and revenue missed consensus; management cited macro-driven consumption softness, expected shipment headwinds, and contract brewing exit .

Segment performance (Q1 2025 vs Q1 2024)

SegmentNet Sales ($USD MM)Y/Y %Underlying PBT ($USD MM)Y/Y %Financial Volume (m hl)Y/Y %
Americas$1,881.8 (12.3%) $202.8 (36.8%) 11.742 (15.6%)
EMEA&APAC$427.3 (6.0%) $(19.2)$ (22.5%) 3.669 (9.7%)
Consolidated$2,304.1 (11.3%) $131.1 (49.5%) 15.409 (14.3%)

KPIs and other items

KPIQ1 2025Q1 2024 / Ref
Price & Sales Mix (Consol.)+3.9% —
Underlying COGS per hl (cc)+6.1% —
Americas NSR per hl+4.8% —
Underlying FCF ($MM)$(264.6)$ $(188.6)$
Net Debt ($MM)$5,825.1 $5,759.3 (3/31/24)
Net Debt / Underlying EBITDA (TTM)2.47x 2.29x (3/31/24)
Dividend per share$0.47 declared May 2025 $0.44 in Q1 2024
Share repurchases (Q1)$59.6MM $113.6MM

Guidance Changes

MetricPeriodPrevious Guidance (Feb 13, 2025)Current Guidance (May 8, 2025)Change
Net Sales (cc)FY 2025Low single-digit increase Low single-digit decrease Lowered
Underlying PBT (cc)FY 2025Mid single-digit increase Low single-digit decrease Lowered
Underlying Diluted EPSFY 2025High single-digit increase Low single-digit increase Lowered
Capital ExpendituresFY 2025$750MM ±5% $650MM ±5% Lowered
Underlying FCFFY 2025~$1.3B ±10% ~$1.3B ±10% Maintained
Underlying D&AFY 2025$675MM ±5% $675MM ±5% Maintained
Underlying Net InterestFY 2025$215MM ±5% $215MM ±5% Maintained
Underlying ETRFY 202522%–24% 22%–24% Maintained

Earnings Call Themes & Trends

TopicQ3 2024 (Q-2)Q4 2024 (Q-1)Q1 2025 (Current)Trend
Macro/consumerU.S. softness in peak season; cut 2024 top-line to ~-1% cc Reiterated macro challenge; guided 2025 LSD top-line growth then Volatile macro; U.S. industry down ~5% in Q1; reset FY25 down LSD Macro worsened; reset FY25
Pricing/promotionsFavorable price/mix +4.5% Pricing supportive, LSD for 2025 North America pricing +1–2% for 2025 Steady, disciplined
Contract brewing exitAmericas drag: -260 bps Q3 Wind-down continuing ~590K hl cycled in Q1; similar in Q2; +mix/margin long term Near-term headwind; mix tailwind
Supply chain/inventoryReversal of 1H inventory build in Q3 —Q1 impacted by prior-year inventory build; STW vs STR timing Normalizing by 2H
PremiumizationMadrí strong; EMEA&APAC premiumization U.S. premiumization plans for 2025 Peroni onshoring, Blue Moon pack reset; premiumization focus Continued emphasis
Non-alc / Fever-Tree—Announced exclusivity starting Feb 1, 2025 FT adds scale; ~$30M one-time MG&A; credit to NSR over 3 years Ramp in 2025
Tariffs/inputs/hedgingFX/COGS volatility —Limited direct tariff exposure; hedging helps; Midwest premium hard to hedge Manageable
Costs/COGSUnderlying COGS/hl up; deleverage Cost savings visible Underlying COGS/hl +6.1% on deleverage/mix Deleverage peak in H1
CapEx/FCF/capital returnCash returns ongoing 2.09x net leverage; $2B buyback plan progressing CapEx cut to $650MM; FCF ~$1.3B maintained; buybacks/dividend continued Prioritize FCF

Management Commentary

  • CEO framing: “The global macroeconomic environment is volatile… pressured the beer industry and consumption trends… we have adjusted our 2025 full year guidance” .
  • Cost/FCF focus: “We remain focused on… margin expansion… protecting and growing our Underlying Free Cash Flow while making prudent capital allocation decisions… return cash to shareholders through a growing dividend and continued share repurchases” .
  • U.S. share/shelf: “We have retained the collective unprecedented U.S. shelf space gains… Coors Banquet… fastest-growing top 15 brand in the U.S.” .
  • Fever-Tree: “Every single case we sell of Fever-Tree is incremental… we intend to leverage the scale and strength of our distribution network… to accelerate growth” .
  • Tariffs: “We don’t expect a material direct impact from the known tariffs on our input costs… extensive hedging program can help mitigate some of that exposure” .

Q&A Highlights

  • Category/macro: Management does not assume continued ~5% industry decline; expects improvement vs Q1 trend; April showed early signs of better industry reads (cautioned as one 4-week read) .
  • Tariffs/input costs: Minimal direct tariff exposure; Peroni onshored; Fever-Tree can be onshored; Midwest aluminum premium remains less hedgeable .
  • COGS/hl outlook: Inflation largely offset by cost savings; 2025 underlying COGS/hl up due to deleverage; hedging program mitigates volatility .
  • Pricing/promo: Expect 1–2% NA pricing; no unusual promotion beyond typical summer seasonality .
  • CapEx: Postponing projects without significant cost savings/growth impact; focus on health & safety and high-return initiatives .
  • Brand/pack: Blue Moon pack change (15s to 12s) caused temporary disruption; expected benefits in margins and supply chain; non-alc Blue Moon gaining distribution .

Estimates Context

  • Q1 2025 results vs S&P Global consensus: Revenue $2.304B vs $2.394B estimate (miss); Underlying diluted EPS $0.50 vs $0.796 estimate (miss). Coverage: 11 revenue est., 16 EPS est. Values retrieved from S&P Global.
  • Implications: Street likely to reduce FY25 revenue and underlying PBT/EPS forecasts to align with new low single-digit decline (cc) outlook and deleverage in H1; CapEx cut and maintained FCF may cushion valuation via cash returns .

Key Takeaways for Investors

  • Guidance reset is the near-term stock driver: 2025 net sales and underlying PBT cut to low single-digit declines (cc); CapEx trimmed $100M; FCF maintained at ~$1.3B ±10% .
  • Volume drag should abate into 2H: management expects shipment/STR alignment primarily in Q3; contract-brewing headwinds mainly H1; watch quarterly STR/STW cadence .
  • Mix tailwinds intact: NSR/hl +4.8% in Americas and consolidated price/mix +3.9% support margin resilience once deleverage fades; premiumization and Fever-Tree scale-up add mix support .
  • Cost/hedging cushion: underlying COGS/hl pressure from deleverage/mix should moderate; hedging program offsets most input inflation; Midwest premium remains a swing factor .
  • Capital allocation supports downside: leverage 2.47x, dividend raised to $0.47, ongoing buybacks; FCF guidance intact, providing valuation backstop .
  • Watchlist into summer: U.S. category trajectory (macro), Blue Moon recovery post pack change, Peroni and non-alc execution, Fever-Tree distributor transition benefits hitting net sales credit over next 3 years .
  • Leadership transition: CEO intends to retire by YE25; board evaluating internal/external candidates; strategy continuity emphasized .

Notes on non-GAAP adjustments and disclosures:

  • Q1 underlying metrics reflect adjustments for restructuring, mark-to-market commodity hedges, and other items (e.g., Fever-Tree fair value gain), with detailed reconciliations provided in the release .
  • One-time MG&A fees of ~$30M tied to Fever-Tree U.S. transition are expected to be recovered via credits to net sales over ~3 years .

Estimate footnote: Entries marked with an asterisk (*) are S&P Global consensus figures; Values retrieved from S&P Global.