Molson Coors Q1 Earnings Miss, Lower Sales Across Segments Hurt

Core Viewpoint - Molson Coors Beverage Company reported disappointing first-quarter 2025 results, with both revenue and earnings falling short of expectations and declining year over year [1][2]. Financial Performance - Adjusted earnings per share were 50 cents, down 47.4% year over year, missing the consensus estimate of 80 cents [1]. - Net sales decreased 11.3% year over year to $2.30 billion, below the Zacks Consensus Estimate of $2.44 billion [2]. - Gross profit fell 11.7% year over year to $850.9 million, with a gross margin of 36.9%, down 20 basis points [5]. - Underlying earnings before taxes (EBT) plummeted 41.1% year over year to $156.3 million, with a constant-currency decline of 49.5% [7]. Segment Analysis - In the Americas segment, net sales dropped 12.3% year over year to $1.88 billion, missing the consensus estimate of $1.96 billion [8]. - EMEA&APAC segment net sales fell 6% year over year to $427.3 million, also below the consensus estimate of $452 million [11]. Volume and Pricing Dynamics - Financial volumes decreased 14.3% year over year, primarily due to lower shipments across the Americas and EMEA&APAC segments [4]. - Brand volumes in the Americas fell 7.4%, with a notable 8.8% decline in the U.S. [9]. - Price and sales mix positively impacted net sales by 4.1%, driven by favorable sales mix and higher net pricing [10]. Cost and Expenses - Marketing, general and administrative (MG&A) expenses slightly decreased by 0.2% year over year to $653.2 million, influenced by reduced marketing investment [6]. - The underlying EBT decline was attributed to cost inflation in materials and manufacturing expenses, despite some offset from favorable pricing and cost savings [10]. Cash Flow and Debt - As of March 31, 2025, the company had cash and cash equivalents of $412.7 million and total debt of $6.24 billion, resulting in a net debt of $5.83 billion [13]. - The company reported a negative underlying free cash flow of $264.6 million, primarily due to lower operating cash flows and higher capital expenditures [13]. Future Outlook - Management has revised its 2025 financial outlook, now projecting a low-single-digit decline in sales year over year, compared to previous expectations of low-single-digit growth [15]. - Underlying EPS growth is now expected in the low single-digit range, down from a high single-digit increase previously anticipated [16]. - Capital expenditure guidance for 2025 has been reduced to $650 million from $750 million [17].