Molson Coors Brewing Co. reports net income of $151.4 million, or 70 cents a share, in the first quarter, down 45.3% from $278.1 million, or $1.28 a share, a year earlier. Sales eased 1.2% to $2.3 billion.
To be sure, the company explained the sales decline as “driven by volume declines and unfavorable foreign currency movements.” It added net sales rose 0.6% in constant currency driven by higher net pricing.
Worldwide brand volume of 18.2 million hectoliters decreased 4.7% and financial volume of 20.1 million hectoliters decreased 3.4% due to lower volume in all segments, partially as a result of industry and share declines particularly in the U.S. and Canada compared to prior year.
Sales in the U.S. were down 0.7% to $1.66 billion. U.S. brand volume decreased 3.8% on a trading-day-adjusted basis for the quarter, driven by lower volume, partially reflective of industry declines, the company said. Higher pricing pushed net sales per hectoliter in the U.S. up3.7%. But cost of goods sold per hectoliter rose 5.9% driven by higher commodity and transportation costs.
“Our first quarter was solid, delivering on our commitment to improving top-line performance while also protecting the bottom line, said Mark Hunter, president/ceo. “Even with industry volume pressure in North America and the shift of Easter from Q1 to Q2, revenue was up on a constant currency basis, driven by strong and disciplined net sales revenue per hectoliter growth across our business, ongoing portfolio premiumization, and improving share trends in our largest market.
“While only the first and smallest of our quarters, I am encouraged by the meaningful growth of net sales revenue in the U.S., led by the increasingly strong performance of Miller Lite which held total beer industry share and an improved performance of Coors Light in our largest and most profitable market, as well as strong U.S. retailer placements for our upweighted innovation program. We also saw continuing strong net sales revenue growth in Europe, our second largest business unit. Across Molson Coors I am pleased with the continuing acceleration of our portfolio premiumization efforts alongside our intensified innovation program, and the growth in our underlying EBITDA, which, despite higher inflation, grew on a constant currency basis.”
Sales-to-wholesalers (STWs) volume, excluding contract brewing, decreased 2.7% driven by lower brand volume, partially offset by quarterly timing of wholesaler inventories as we expect brand volume and STW trends to largely converge on a full year basis.”