We prefer: 1) stocks that benefit from policies stimulating domestic consumption, such as restaurants (Yum China, DPC Dash) and their suppliers such as condiments companies (Yihai), beverage companies (Guming, China Foods, Bairun), and brewers (BUD APAC, Tsingtao, CR Beer); 2) value plays offering decent shareholder returns (WH Group); 3) structural growth opportunities (Pop Mart, China Pet Food, Weilong, Sun Art, Anta, RLX, Arashi Vision); 4) home appliance makers with overseas earnings upside and global e ...

The Boston Beer Company (SAM) FY 2025 Conference September 04, 2025 03:15 PM ET Company ParticipantsSaree Boroditsky - SVP - Multi-IndustrialsC. James Koch - Chairman, Founder, Brewer & CEOSaree BoroditskyWe're going to get started. It's wonderful to have Chairman, Founder, Brewer and CEO, Jim Cook, joining us in Boston once again. Jim, as you know, and I say it every year, enjoying a beer with you on stage is the highlight of my September a wonderful So, way to end the thank you so much for being here agai ...

Financial Data and Key Metrics Changes - The company has raised its 2025 margin guidance, indicating improvements in gross margins despite challenges from tariffs and inflationary pressures [47][59] - The company is generating significant cash flow, with a healthy cash balance allowing for stock repurchases totaling $110 million in the first half of the year and an additional $50 million buyback announced [59] Business Line Data and Key Metrics Changes - The fourth category of products, which includes hard cider and other innovative beverages, is expected to outgrow traditional beer, wine, and liquor, indicating a strategic shift towards more innovative offerings [23][24] - Twisted Tea has experienced a decline in growth rates, prompting the company to reassess pricing strategies and marketing efforts to regain market share [38][41] Market Data and Key Metrics Changes - The beer industry is projected to face a mid-single-digit decline, with the company acknowledging the need for improved execution at retail to counteract this trend [25][30] - The Hispanic consumer base is under economic pressure, which may impact overall consumption trends in the alcohol industry [10][33] Company Strategy and Development Direction - The company is focusing on innovation within the fourth category of beverages, leveraging its brewing capabilities to create products that align with consumer tastes [23][24] - There is a strategic emphasis on strengthening retail execution and marketing efforts, particularly in the on-premise segment, to build brand equity and consumer connections [30][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing challenges in the operating environment, including economic uncertainty affecting the majority of consumers, and recognizes the need for targeted promotions to drive volume [33][34] - The company is committed to maintaining share in core brands while pursuing growth through innovation, indicating a balanced approach to market challenges [52][58] Other Important Information - The company is working on developing multiple internal CEO candidates to ensure a strong succession plan, reflecting a long-term strategic focus on leadership continuity [4] - Management has noted the importance of balanced research on the health effects of alcohol, suggesting a need for the industry to invest in neutral research to counteract negative perceptions [27] Q&A Session Summary Question: How does the company view the current state of U.S. alcohol consumption? - Management expressed concerns about the structural headwinds affecting consumption, particularly related to health discussions and economic pressures on the Hispanic population [9][10] Question: What lessons have been learned from the Truly experience that are being applied to SunCruiser? - The company is focusing on a market-by-market rollout for SunCruiser, emphasizing a bottom-up approach and cautious SKU proliferation to ensure sustainable growth [35][36] Question: What actions are being taken to optimize Twisted Tea's pricing and retail presence? - Management is addressing pricing strategies that may have been set too high, particularly for 12 packs, and is working to restore brand equity through targeted marketing efforts [40][41] Question: How does the company plan to sustain gross margin improvements amid ongoing challenges? - The company is focused on procurement efficiencies, production improvements, and network optimizations to drive further cost savings and sustain margin growth [47][51]

Molson Coors Beverage Company (TAP) FY 2025 Conference September 03, 2025 10:30 AM ET Company ParticipantsLauren Lieberman - Managing DirectorTracey Joubert - CFOTraci Mangini - VP - IRLauren LiebermanOkay. We're going get started. We have Molson Core's beverage company next. Very happy to have the company's CFO, Tracey Joubert, with us today in Boston. And also, Tracey Mangini at IR, thank you, is joining us on the stage.A little female power up here. Okay. So still lots of debate on whether soft alcohol c ...

Core Viewpoint - Constellation Brands has significantly reduced its full-year guidance, leading to a notable decline in its stock price, reflecting challenges in the beer market and broader economic conditions [1][3]. Financial Performance - The company has revised its adjusted earnings-per-share (EPS) forecast from a range of $12.60 to $12.90 down to a range of $11.30 to $11.60 [3]. - Organic net sales are now expected to decline between 4% to 6%, compared to the previous forecast of a 2% decline to a 1% gain [3]. Market Conditions - CEO Bill Newlands highlighted a challenging macroeconomic environment that has dampened consumer demand and led to more volatile purchasing behavior [4]. - There has been a deceleration in high-end beer buy rates, particularly among Hispanic consumers, attributed to the immigration crackdown [4]. Industry Challenges - The alcohol sector is facing multiple headwinds, including a decrease in consumption among young people, tariffs affecting global sales, and competition from craft brewers [5]. - Despite these challenges, the company claims to be gaining market share, indicating it is outperforming its peers [4]. Historical Context - Constellation Brands experienced significant stock growth over a decade ago after acquiring rights to sell Corona and Modelo but has faced struggles since then [6]. - The recent guidance cut and ongoing challenges in the beer industry suggest that a quick turnaround is unlikely, despite interest from notable investors like Warren Buffett [6].

Core Viewpoint - Constellation Brands has reduced its fiscal year outlook due to a challenging economic environment impacting alcohol sales, particularly in the beer segment [1][2][3] Financial Outlook - The company has lowered its comparable earnings per share forecast for fiscal 2026 to a range of $11.30 to $11.60, down from $12.60 to $12.90, resulting in an approximate 8% decline in stock price [2] - Organic net sales are expected to decrease by 4% to 6%, a significant revision from the previous expectation of 1% growth to a 2% decline [3] - Net beer sales are projected to fall by 2% to 4%, compared to earlier expectations of flat to 3% growth [4] - Free cash flow estimates have been reduced from $1.5 to $1.6 billion to a new range of $1.3 to $1.4 billion [4] Consumer Behavior - The CEO noted a decline in high-end beer purchase rates, with both trip frequency and spending per trip decreasing [3] - There has been a notable drop in demand from Hispanic consumers, who represent about half of the company's beer sales, attributed to concerns over immigration policies and job security [5] Strategic Initiatives - The company is focusing on strategic objectives such as distribution gains, disciplined innovation, and brand investment [4] - Constellation has initiated a portfolio repositioning by divesting "mainstream" wines and has authorized a share repurchase program, resulting in $604 million in buybacks in the first half of the fiscal year [6]

Group 1: Industry Overview - More than 10 listed liquor companies reported their semi-annual results, showing a general decline in performance among second-tier liquor brands, with many experiencing significant setbacks [1] - First-tier liquor brands continue to launch new products and upgrade existing ones to capture market share [1] Group 2: New Product Launches - Moutai's new product, Moutai 1935, is positioned as a high-end offering with a price of 998 yuan for 500ml, set to launch on August 28 [2] - Wuliangye is set to launch a new 29-degree product called "Wuliangye·Yijianqingxin" this week, with three different flavor samples previously tested [3] - Shede Liquor will introduce its first low-alcohol, high-flavor aged liquor, "Shede Zizai," also at 29 degrees, on August 30 [3] - Gujing Gongjiu has launched a new low-alcohol product, "Gujing Gongjiu·Nianfen Yuanjiang Qingdu 20," with an alcohol content of 26 degrees, priced at 375 yuan for 375ml [3] Group 3: Company Performance - China Resources Beer reported a 0.8% increase in revenue to 23.942 billion yuan, with a 23% rise in net profit to 5.789 billion yuan, while beer sales grew by 2.2% [6] - Jinhui Liquor achieved a revenue of 1.759 billion yuan, a slight increase of 0.31%, and a net profit of 298 million yuan, up 1.12% [7] - Shede Liquor's revenue fell by 17.41% to 2.701 billion yuan, with a net profit decrease of 24.98% [9] - Jiu Gui Jiu reported a 43.54% drop in revenue to 561 million yuan and a 92.6% decline in net profit [10] - Tian You De Jiu's revenue decreased by 11.24% to 674 million yuan, with a net profit drop of 35.37% [10] - Huazhi Liquor's revenue fell by 33.55% to 3.949 billion yuan, with a net profit decline of 63.75% [11] - Kouzi Jiao's revenue decreased by 20.07% to 2.531 billion yuan, with a net profit drop of 24.63% [12] - Kuaijishan reported an 11.03% increase in revenue to 817 million yuan, with a net profit increase of 3.41% [13] - Zhenjiu Lidu's revenue fell by 39.6% to 2.497 billion yuan, but the gross margin increased to 59% [14]

Market Trends - German breweries are adapting to changing consumer preferences [1] - More young people are choosing non-alcoholic (Alkoholfrei) beer or abstaining from alcohol altogether [1]

Financial Data and Key Metrics Changes - The company is reducing its top and bottom line guidance for 2025, now expecting net sales revenue to decline by 3% to 4% on a constant currency basis, compared to a previous low single-digit decline expectation [10][12] - Underlying pretax income is now expected to decline by 12% to 15% on a constant currency basis, a significant change from the previous low single-digit decline forecast [12] - Underlying earnings per share are anticipated to decline by 7% to 10%, contrasting with earlier expectations of low single-digit growth [12] Business Line Data and Key Metrics Changes - The U.S. beer industry is experiencing a decline of approximately 5% in the second quarter, which is worse than previously expected [8][10] - Core power brands, including Coors Light, Miller Lite, and Coors Banquet, have retained a 15.2% volume share of the industry for the first half of the year, up from 13.4% three years ago [15] - Banquet has shown strong performance, gaining over 15% distribution in the first half of the year and being a top five volume share growth brand [16] Market Data and Key Metrics Changes - Consumer sentiment in the U.S. remains low, particularly affecting lower-income and Hispanic consumers, leading to reduced consumption trends [5][6] - In Canada, the Molson family of brands has posted volume share gains despite a challenging industry backdrop [17] - The UK market remains highly competitive, with brands like Carling and Ajusco maintaining segment leadership despite regional softness [17] Company Strategy and Development Direction - The company is focusing on premiumization across its portfolio, with plans to develop both beer and beyond beer products [18][20] - The strategy includes leveraging capabilities and partnerships to support profitable growth, particularly in the U.S. market [14] - The company aims to maintain the health of its core power brands while navigating macroeconomic pressures [25] Management's Comments on Operating Environment and Future Outlook - Management views the current softness in industry performance as cyclical, driven by macroeconomic factors, and expects consumer confidence to eventually improve [13][44] - The company is committed to protecting and growing its underlying free cash flow while making prudent capital allocation decisions [37] - Management acknowledges the challenges posed by the Midwest premium pricing, which has increased significantly, impacting cost structures [9][12] Other Important Information - The company has executed a share repurchase program, repurchasing 9.4% of its outstanding shares since its announcement in October 2023 [27] - The company has raised its quarterly dividend each year since 2021, reflecting confidence in its financial health [27] Q&A Session Summary Question: Can you unpack the updated guidance and profit headwinds? - Management indicated that the industry did not improve as expected, with a significant increase in the Midwest premium impacting guidance negatively [40][41] Question: What is the impact of Midwest Premium increases? - The company expects an incremental impact of $20 million to $35 million from the Midwest premium for the balance of the year, with a full-year impact of $40 million to $55 million [55] Question: Are there signs of improvement in consumer confidence? - Management noted that overall consumer confidence has not improved, with value-conscious behaviors continuing among consumers [61][62] Question: How is the company addressing competitive pressures? - The company is focusing on marketing strategies for key brands and leveraging partnerships to enhance market presence [91] Question: What are the drivers of margin contraction? - Management highlighted that volume deleverage, higher COGS due to premiumization, and Midwest premium costs are significant factors affecting margins [75]

Financial Data and Key Metrics Changes - EBITDA increased by 6.5% with continued margin expansion [7] - Revenue per hectoliter growth accelerated by 4.9% compared to last year [7] - Overall revenue increased by 3% this quarter versus last year [10] - Underlying EPS grew by 8.7% in U.S. Dollar terms and 17.4% in constant currency [10][25] - Free cash flow increased by $5 billion compared to last year [26] - Net debt to EBITDA ratio improved to 3.27 times from 3.42 times year over year [27] Business Line Data and Key Metrics Changes - Non-alcohol beer portfolio revenues increased by 33% [8] - In the U.S., Michelob Ultra and Busch Light were the top two volume share gainers in the industry [12] - In Brazil, revenue declined by 1.9% due to volume performance [13] - In Colombia, record high volumes drove high single-digit top and bottom line growth [13] - In Europe, volumes were flat, but revenue grew due to premiumization [14] Market Data and Key Metrics Changes - Volumes declined by 1.9% globally, impacted by soft industry performance in China and Brazil [9] - In China, revenue declined by 6.2% with underperformance in volumes [16] - Revenue increased in 70% of markets, with top and bottom line growth across four of five operating regions [11] Company Strategy and Development Direction - The company continues to invest in mega brands and platforms, with $3.6 billion invested in sales and marketing in the first half of the year [17] - Focus on premiumization and innovation to drive growth in the beer category [20] - The company aims to optimize its business and improve margins through disciplined revenue management and operational efficiency [25] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the long-term growth of the industry despite short-term volume challenges [36] - The company expects to deliver on its 2025 outlook of 4% to 8% EBITDA growth [29] - Management highlighted the importance of consumer confidence and economic recovery in driving future growth [56] Other Important Information - The company is focusing on digital platforms to enhance consumer engagement and drive new consumption occasions [22] - The company is committed to increasing investments in mega brands and expanding its non-alcohol beer portfolio [21] Q&A Session Summary Question: Concerns about volume growth and long-term outlook - Management acknowledged the volume decline but emphasized the strength of their global footprint and consistent performance in other KPIs [36][37] Question: Margin improvement sustainability - Management indicated that margin improvements are expected to be sustainable, driven by operational efficiencies and disciplined cost management [39][40] Question: Key learnings from U.S. market performance - Management highlighted the importance of consistent long-term planning and strategic investments in brands to drive growth [46][47] Question: Consumer slowdown in Mexico and Brazil - Management noted that while there are challenges, underlying demand remains strong, and they are monitoring consumer confidence closely [54][56] Question: On-premise channel performance in China - Management reported that the on-premise channel remains weak, but there is growth in the off-premise channel, presenting opportunities for improvement [62] Question: Future marketing opportunities with FIFA 2026 - Management expressed optimism about leveraging major events like FIFA 2026 to drive category growth and brand momentum [88][90]