Miller and Coors products are displayed on October 9, 2007 in Chicago, Illinois.
Scott Olson | fake images
Brewer Molson Coors said Tuesday that it expects to maintain its market share gains in the coming year.
The company, which makes Coors Light and Miller Lite, reported strong fourth-quarter earnings on Tuesday as 2023 net sales grew 9.3%. These income increases were largely tied to consumers migrating out of AB-InBev's Bud Light after boycotts began last April.
“Molson Coors was well positioned to benefit from significant changes in consumer purchasing habits,” the company said in its earnings report, although it did not directly address the boycotts.
It was a return to profits for Molson Coors after a loss a year ago. The company reported net income of $103.3 million, or 48 cents per share, for the quarter, compared with a loss of $590.5 million, or $2.73 per share, in the same period of the year. past.
Molson said its underlying earnings were $1.19 per share, which beat the $1.12 per share analysts were expecting, according to LSEG, formerly Refinitiv.
CEO Gavin Hattersley shared his confidence in the company's plan to maintain its leadership in the beer category on the company's fourth-quarter earnings call.
“The gains we've seen across our core brands have been consistent for more than nine months,” Hattersley said. “We are growing in every region, every channel, with every major US customer, and at this point we believe the change in the US beer industry is permanent.”
Molson also invested a significant amount of capital in the fourth quarter, spending nearly 19% more on marketing and administrative costs to achieve those gains.
The company was among the advertisers who spent big on Sunday's Super Bowl game, with a commercial featuring LL Cool J and the Coors Light ice cream train. For the second year in a row, the average cost of a 30-second ad was $7 million.
“We've invested heavily in our brands, increasing marketing spending by more than $50 million in the quarter,” Greg Tierney, vice president of financial planning and analysis and investor relations, said on the company's earnings conference call. “Our goal was to retain our existing drinkers and attract new ones.”
Some analysts on the earnings conference call were skeptical that Molson's gains from the Bud Light boycott were sustainable. The stock fell nearly 3% on Tuesday despite the optimistic outlook. But others think Hattersley's strategy will pay off for investors.
TD Cowen analyst Robert Moskow said in a note to investors that the company “will retain the majority of the shares they gained from the Bud Light boycotts.”
Ariel Investments, which has invested in Molson Coors since 2018, also remains confident in the stock's performance.
“Major brands were increasing their dollar share even before the Bud Light controversy,” said Tim Fidler, portfolio manager at Ariel.
