Molson Coors Beverage Company (TAP) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales declined 7.8% year-over-year to $3.04 billion, with net income attributable to shareholders down 53.6% to $199.8 million, driven by lower U.S. volumes, macroeconomic headwinds, and the wind-down of a major contract brewing agreement, while EMEA, APAC, and Canada delivered strong results supported by premiumization and innovation.

• U.S. shipment volume dropped 17.9% and brand volume fell 6.2%, impacted by the exit of Pabst's contract brewing and inventory unwind, but these are not seen as indicative of long-term growth potential.

• Core power brands in the U.S. retained most of last year's share gains, with Coors Banquet leading growth among top 15 beer brands; Canada and EMEA/APAC also saw share gains and above-premium brand growth.

• Significant one-time items included a $41.1 million loss from the wind down/sale of U.S. craft businesses, a $34 million pension settlement loss, and a $45.8 million adjustment related to the Cobra Beer Partnership buyout.

• Strong cash flow generation enabled continued investment in the business and increased returns to shareholders, including a larger stake in ZOA Energy and full ownership of Cobra.

Financial highlights

• Q3 2024 net sales revenue declined 7.8% year-over-year to $3,043M; nine-month net sales were flat at $8,891M.

• Underlying income before income taxes fell 8.7% to $480M in Q3, but rose 7.5% YTD to $1,270M; Q3 net income attributable to shareholders was $199.8M, down 53.6%.

• Diluted EPS for Q3 2024 was $0.96, down from $1.98 in Q3 2023; underlying diluted EPS was $1.80, down 6.2%.

• Underlying free cash flow for nine months was $856M, down 23.7% from prior year.

• Net debt as of September 30, 2024, was $5.22B, with a net debt to underlying EBITDA ratio of 2.1x.

Outlook and guidance

• 2024 net sales revenue guidance revised to down approximately 1% from previous low single-digit growth, mainly due to U.S. industry softness in summer.

• Underlying income before income taxes and EPS both projected to grow mid-single digits year-over-year, with guidance narrowed to the higher end of the range.

• Underlying free cash flow guidance maintained at $1.2B ±10%; capital expenditures expected at $750M ±5%.

• Underlying effective tax rate forecasted at 23–25% for 2024.

• Management expects continued restructuring charges of $95–$115 million in Q4 2024 and Q1 2025 related to the U.S. craft business exit.