Healthier US Beer Category & Favorable Pricing Help Molson Coors Beverage: Read How

Molson Coors Beverage Company TAP reported third-quarter FY23 sales growth of 12.4% year-on-year to $3.30 billion, beating the analyst consensus estimate of $3.24 billion.

The revenue increase was driven by favorable price and sales mix, higher financial volumes, and favorable foreign currency impacts.

Net sales from the Americas segment increased 10.8% reported, and 11.2% in constant currency.

Net sales from EMEA & APAC segment jumped 19.2%, driven by favorable price and sales mix and favorable foreign currency impacts, partially offset by a decline in financial volumes.

Underlying cost of goods sold (COGS) per hectoliter increased 2.6% in constant currency.

Gross profit climbed 36.8% Y/Y to $1.346 billion. Operating income for the quarter was $592.2 million, with a margin of 15.2%.

Molson Coors Beverage held $801.7 million in cash and equivalents as of September 30, 2023. Operating cash flow for the nine months totaled $1.6 billion.

Adjusted EPS of $1.92 beat the analyst consensus estimate of $1.58.

Outlook: Molson Coors reaffirmed FY23 net sales guidance of high single-digit increase versus 2022 on a constant currency basis but narrowing to the high end of the range.

The adjustment is due to the U.S. beer category being healthier than projected as well as stronger than expected brand volume growth, which it expects to accelerate in the fourth quarter.

TAP continues to expect underlying free cash flow of $1.2 billion, plus or minus 10% and capital expenditures of $700 million, plus or minus 5%.

Price Action: TAP shares traded lower by 2.61% at $56.68 on the last check Thursday.