Molson Coors B 2025 Q1 Earnings Misses Targets as Net Income Declines 41.4%

Molson Coors B (TAP) reported its fiscal 2025 Q1 earnings on May 07th, 2025. Molson Coors faced significant challenges in its first quarter of 2025, missing market expectations on several fronts. The company's revenue fell short of projections by $90 million, while its Non-GAAP EPS of $0.50 was $0.30 below market expectations. Adjustments to its 2025 financial guidance reflect anticipated low single-digit declines in net sales and income before taxes on a constant currency basis, moving from previous growth forecasts.

Revenue
The total revenue for Molson Coors B saw a notable reduction, registering at $2.30 billion in Q1 2025, a decrease from $2.60 billion in Q1 2024. This decline encompasses various segments, including overall sales amounting to $2.69 billion. Excise taxes detracted $386.10 million from the revenue, leading to net sales settling at $2.30 billion, as the key metric of net sales remains unchanged at this figure.

Earnings/Net Income
Molson Coors B experienced a marked downturn in its earnings, with EPS dropping 38.8% to $0.60 in Q1 2025 from $0.98 in Q1 2024. Concurrently, net income saw a sharp decline, reaching $123.10 million in Q1 2025, down 41.4% from the $209.90 million reported in Q1 2024. Overall, the earnings were significantly below expectations.

Post-Earnings Price Action Review
The strategy of buying Molson Coors B (TAP) shares after a revenue decline quarter-over-quarter and holding for 30 days yielded moderate returns but presented substantial volatility and risk. The strategy's compounded annual growth rate (CAGR) was 12.13%, trailing the benchmark by 10.59 percentage points. The maximum drawdown was -30.73%, and the Sharpe ratio stood at 0.24, showcasing a challenging risk-return profile. These results highlight the critical need for robust risk management to navigate such volatile scenarios effectively.

CEO Commentary
Gavin Hattersley, President and CEO, acknowledged the adverse impact of the macroeconomic environment on the beer industry, resulting in a 41.1% decrease in income before taxes. Despite facing inventory adjustments and competitive pressures, particularly in EMEA & APAC, Hattersley emphasized ongoing progress with the Acceleration Plan and the health of core power brands. He expressed confidence in premiumization initiatives and the Fever-Tree partnership, while underscoring the importance of controlling discretionary spending during uncertain times.

Guidance
The company has revised its 2025 full-year guidance, now forecasting a low single-digit decline in net sales and underlying income before taxes, contrary to earlier growth projections. Underlying diluted earnings per share are anticipated to see a low single-digit increase rather than a high single-digit rise. Capital expenditures are expected to be approximately $650 million, down from the prior estimate of $750 million. Underlying free cash flow guidance remains unchanged at $1.3 billion.

Additional News
Molson Coors is undergoing significant changes, with CEO Gavin Hattersley set to retire by December 31, 2025, after over five years in the role. The company is actively seeking a successor to lead its operations moving forward. Additionally, Molson Coors has maintained its commitment to shareholder returns, paying cash dividends of $99.2 million for the first quarter of 2025. The company also engaged in a share repurchase program, spending $59.6 million during the same period, reflecting its strategic focus on capital allocation and shareholder value.