Molson Coors has recorded an 8.7% drop in net sales as its Q1 results were disproportionately affected by the coronavirus and a shooting at its Milwaukee brewery.
While its off-premise sales continued to perform well, these were offset the loss in volume caused by the closure of bars and restaurants in nearly all markets. The brewer estimated that approximately 23% of its 2019 net sales were from on-premise consumption.
As a result of on-premise closures, Molson Coors reported financial volume declines of 8.3% in the three months to 31 March 2020.
The company’s first quarter results follow a series of changes by the brewery including a new corporate logo, a restructure of its its management to two units – North America and Europe – and several product launches and partnerships as it aims to enter new beverage categories.
Despite making early progress in its revitalisation plan, Molson Coors posted net sales of $2.1 billion, a decrease of 8.7% to last year, driven by financial volume declines and keg sale returns due to the coronavirus pandemic.
The owner of Coors Light and Carling said in order to support the challenges facing its on-premise customers and retailers, it provided customers with reimbursements for untapped kegs resulting in a $31.5 million reduction in net sales.
In its North America segment, the brewer saw its net sales decrease 7.4% to $1.79 billion driven by unfavourable shipment timing in the US, including brewery downtime associated with the Milwaukee tragedy – which caused the facility to close for a week – and keg sale returns.
Meanwhile, its European business witnessed its net sales drop 15.5% to $318 million predominantly due to lower volumes and keg sale returns.
Due to uncertainty around the impact of the coronavirus, Molson Coors has withdrawn its financial outlook for 2020, however expects the negative on-premise trends in the US to continue.
“The first quarter of 2020 was unlike any other in our company’s long history. In the early part of the quarter, we saw mounting confidence and enthusiasm for our plans and for our brands – internally and externally,” said Molson Coors president and CEO Gavin Hattersle.
He continued: “Despite the early progress, our first quarter results were disproportionately affected by the coronavirus, a pandemic that has changed the world – not just for our business, and our industry, but for the entire global economy.
“Like everyone else, the full impact and what our new normal looks like going forward is still uncertain, but coronavirus has had, and will have, a material impact on our business.”
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