Molson Coors’ profits slump amid Q2 spending increase

The beverage maker saw a volume decline and struggled with a Quebec labour dispute.

Molson Coors is taking its lumps with a big Q2 profit dip, which it is meeting by increasing its MG&A spend compared with a year prior.

The brewer is reporting that marketing, general and administrative expenses for the three months ending June 2022 was $707.6 million, up from $681.7 million. This was thanks to higher marketing investment to support its core brands, new innovations and increased local sponsorship and events.

The company earned $47.3 million USD over the three months ended June 30, a big difference compared with $388.6 million a year prior, because of cost inflation mainly on materials, transportation and energy costs. Revenues were roughly flat at $2.92 billion USD, compared to $2.94 billion USD a year earlier.

Net sales in the Americas was down 2.3% and brand volumes declined 2.2% in part thanks to a softer industry performance and the impacts of a Québec labour strike, which saw about 400 workers at its Longueuil plant engaging in an 11-week dispute, returning to their jobs in early June.

However, the company is reporting that it generated net sales growth for the fifth consecutive quarter for the first time in over a decade on a constant currency basis.

It also says that in Canada, Molson Canadian grew share of the total beer industry for the first time in eight years. In the U.K., meanwhile, Carling, the largest beer brand in the U.K., managed to further solidify its number one position in the total market.

Molson Coors reports it is “changing the shape of its product portfolio, increasing its concentration in growth areas” while continuing to offer strong core brands in all segments of the market.

The beverage company also says net sales of the Company’s U.S. above premium portfolio (which includes Peroni and Blue Moon) is now higher than that of its U.S. economy portfolio. That trend has been “driven by the rapid growth of its hard seltzers.”

Molson Coors CEO Gavin Hattersley says the company has the right mix of brands to “compete and win across all segments” and navigate challenging economic times.

Featured image by Eternalsleeper.