Coors beer is displayed on a store shelf on February 13, 2024 in San Rafael, California.
Justin Sullivan | Getty Images
Brewer Molson Coors said on Tuesday that it expects to take care of its market share gains within the 12 months ahead.
The corporate, which makes Coors Light and Miller Lite, reported strong fourth-quarter earnings Tuesday as net sales for 2023 grew 9.3%. Those revenue gains were largely tied to consumers migrating away from AB InBev‘s Bud Light products after boycotts began last April.
“Molson Coors was well positioned to profit from the numerous shifts in consumer purchasing habits,” the corporate said in its earnings release, though it didn’t directly seek advice from the boycotts.
It was a return to profit for Molson Coors from a loss a 12 months ago. The corporate reported net income of $103.3 million, or 48 cents a share, for the quarter, compared with a lack of $590.5 million, or $2.73 a share, in the course of the same period last 12 months.
Molson said its underlying earnings were $1.19 per share, which outpaced the $1.12 per share analysts were expecting, in line with LSEG, formerly generally known as Refinitiv.
CEO Gavin Hattersley shared his confidence in the corporate’s plan to take care of its leadership within the beer category on the corporate’s fourth-quarter earnings call.
“The gains we have seen in our core brands have been consistent for over nine months,” Hattersley said. “We’re growing in every region, every channel, with every major customer in the USA, and at this point, we consider that the shifts within the U.S. beer industry are everlasting.”
Molson also invested a major amount of capital within the fourth quarter, spending nearly 19% more on marketing and administrative costs to realize those gains.
The corporate was among the many advertisers that spent big on Sunday’s Super Bowl game, with a industrial featuring LL Cool J and the icy Coors Light train. For the second consecutive 12 months, the typical cost of a 30-second ad spot was $7 million.
“We invested strongly behind our brands, increasing marketing spend over $50 million within the quarter,” said Greg Tierney, vice chairman of monetary planning and evaluation and investor relations, on the corporate’s earnings call. “Our focus was on retaining our existing drinkers and attracting latest ones.”
Some analysts on the earnings call remained skeptical that Molson’s gains from the Bud Light boycott can be sustainable. The stock fell nearly 3% Tuesday despite the rosy outlook. But others think Hattersley’s strategy can pay off for investors.
TD Cowen analyst Robert Moskow said in a note to investors that the corporate “will hold on to the vast majority of the share they picked up from the Bud Light boycotts.”
Ariel Investments, which has invested in Molson Coors since 2018, also stays confident within the stock’s performance.
“The core brands were growing dollar share even before the Bud Light controversy,” said Tim Fidler, Ariel Investments’ portfolio manager.
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