MOLSON COORS - SELL vs. NEUTRAL | USD51 vs. USD71 (-6%) If you thought it could not get worse…
MOLSON COORS - SELL vs. NEUTRAL | USD51 vs. USD71 (-6%)If you thought it could not get worse…
Volumes down 7% as TAP bleeds share in declining markets
After the company lost 3.4% in beer volumes in the first quarter of the year, the trend got even worse to a 7% loss in volumes in the second quarter. Volumes were down 7% in the US with a declining market, market share loss as it continues to underweight in the premium category and timing of wholesaler inventories. In Canada, the company’s volumes were down 5.3% in Canada. (AB InBev reported a volume decline in North America, i.e. US + Canada, of 2.4%.). European volumes were down 6.9% due to bad weather, cycling the benefit of higher consumption from the World Cup in the prior year and also here we suspect loss of market share (At AB InBev Europe was organic up mid-single digit and Heinekens volumes fell organic 3.3%.) An things got even worse international where volumes tumbled by 21.5% with the company highlighting price increases in Mexico although Heineken that distributes Molson Coors in Mexico reported for its portfolio volumes up low single digit (AB InBev volumes up double digit) and India the company blames supply chain constraints related to the general election in India. (For India market leader UBL’s quarterly figures are not yet out but there are expectations for 7% volume growth!).
Operating leverage in its full glory: EBIT down 28%
Molson Coors Brewing is a holding company. Through its subsidiaries, the company is a brewer and has a portfolio of brands, including Blue Moon, Coors Banquet, Coors Light, Miller Lite, Staropramen, Carling, Molson Canadian and other brands, as well as craft and specialty beers such as Creemore Springs, Cobra, Doom Bar, Henry's Hard and Leinenkugel's. The company's segments include: MillerCoors LLC operating in the U.S.; Molson Coors Canada operating in Canada; Molson Coors Europe operating in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, the Republic of Ireland, Romania, Serbia, the U.K. and various other European countries; and Molson Coors International operating in various other countries.
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