Molson Coors Beverage Company — 2026 Third Quarter Earnings Summary

Financial Performance

• Consolidated net sales decreased 1.6% reported and 1.2% in constant currency to $2,926.5 million for the three months ended September 30, 2026, compared to $2,973.5 million in the prior year; year-to-date sales were $8,374.1 million, a 1.2% reported decrease.
• U.S. GAAP income before income taxes was $342.2 million for the quarter, an increase of $3,837.7 million from a loss of $3,495.5 million in the prior year, driven by the cycling of a $3,645.7 million goodwill impairment charge in the prior year.
• Underlying (Non-GAAP) income before income taxes decreased 17.4% in constant currency to $349.0 million for the quarter, down from $426.0 million in the prior year; year-to-date underlying income was $880.1 million, a 19.2% reported decrease.
• U.S. GAAP net income attributable to MCBC was $271.5 million ($1.45 per diluted share) for the quarter, compared to a net loss of $2,927.6 million ($14.79 per diluted share) in the prior year; year-to-date net income was $654.5 million ($3.48 per diluted share).
• Underlying (Non-GAAP) diluted earnings per share decreased 12.6% to $1.46 for the quarter, down from $1.67 in the prior year; year-to-date underlying EPS was $3.65, a 13.1% decrease.
• Cost of goods sold (COGS) increased 5.3% reported, with COGS per hectoliter rising 8.6% reported and 8.1% in constant currency, primarily due to cost inflation in materials, logistics, and manufacturing, including a $30 million unfavorable impact from Midwest Premium pricing.
• Marketing, general & administrative (MG&A) expenses decreased 7.7% reported to $633.5 million, driven by lower marketing expenses and restructuring-related employee cost reductions.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $1,280.4 million, an increase of $36.7 million from the prior year.
• Underlying (Non-GAAP) free cash flow for the nine months ended September 30, 2026, was $852.0 million, an increase of $69.9 million from the prior year.
• Total debt as of September 30, 2026, was $5,995.8 million; cash and cash equivalents were $602.2 million, resulting in net debt of $5,393.6 million and a net debt to underlying EBITDA ratio of 2.53x.

Guidance and Future Outlook

• Net sales guidance for 2026 was adjusted to a decline of 1% to 2% on a constant currency basis, revised from a previous expectation of flat, plus or minus 1%.
• Underlying income before income taxes guidance for 2026 was adjusted to a decline of 21% to 24% versus 2025 on a constant currency basis, revised from a previous range of 15% to 18%.
• Underlying earnings per share guidance for 2026 was adjusted to a decline of 16% to 19% versus 2025, revised from a previous range of 11% to 15%.
• Capital expenditures guidance for 2026 is $650 million, plus or minus 5%.
• Underlying free cash flow guidance for 2026 is $1.0 billion, plus or minus 10%, revised from $1.1 billion.
• Underlying depreciation and amortization guidance for 2026 is $720 million, plus or minus 5%.
• Consolidated net interest expense guidance for 2026 is $260 million, plus or minus 5%.
• Underlying effective tax rate guidance for 2026 is in the range of 22% to 24%.
• Management expects softer global beer industry volume trends observed in the second and third quarters of 2026 to persist into the fourth quarter.
• U.S. financial volumes are expected to converge toward brand volumes in the balance of the year.
• Commodity and logistics costs are expected to remain elevated, with the impact of Midwest Premium expected to exceed the prior year by approximately $130 million for the full year.

Business Segments and Product Lines

• Americas Segment: Net sales decreased 1.2% reported and 1.0% in constant currency to $2,232.8 million for the quarter; underlying income before income taxes decreased 18.8% in constant currency to $313.7 million. Financial volume decreased 2.9% and brand volume decreased 5.3%, driven by lower volume in the U.S. core and value brands and industry softness in Canada. Price and sales mix favorably impacted sales by 1.9%.
• EMEA&APAC Segment: Net sales decreased 2.7% reported and 2.0% in constant currency to $701.4 million for the quarter; underlying income before income taxes increased 5.5% in constant currency to $91.8 million. Financial volume decreased 3.0% and brand volume decreased 3.8%, primarily due to lower volume in the U.K. driven by soft market demand and a heightened competitive landscape. Price and sales mix favorably impacted sales by 1.0%, driven by premiumization.
• Volume Metrics: Consolidated financial volume decreased 3.0% to 18.809 million hectoliters; consolidated brand volume decreased 4.9% to 19.376 million hectoliters for the quarter. Year-to-date, financial volume decreased 3.9% and brand volume decreased 4.3%.
• Portfolio: The company maintains a portfolio including core power brands (Coors Light, Miller Lite, Molson Canadian), premium brands (Blue Moon, Staropramen), and value brands (Miller High Life), alongside partner brands such as Fever-Tree and Vizzy Hard Seltzer.

Market and Competitive Landscape

• Persistent promotional activity in the U.K. and a heightened competitive landscape are impacting volume trends.
• Global macroeconomic environment impacts on the beer industry and consumer behavior are cited as key factors influencing performance.
• Industry softness was noted in the Americas segment, particularly in the U.S. core and value brands and in Canada.
• In the EMEA&APAC segment, soft market demand and competition in the U.K. contributed to volume declines.

Risks and Challenges

• Cost inflation related to materials, logistics, and manufacturing expenses, including unfavorable impacts from Midwest Premium pricing and commodity derivative positions.
• Foreign currency headwinds, specifically the strengthening of the U.S. dollar against the Euro and British pound, negatively impacted net sales.
• Unfavorable changes in unrealized mark-to-market commodity derivative positions ($14.7 million unfavorable impact in the quarter).
• Volume deleverage contributing to higher COGS per hectoliter.
• Uncertainties regarding the global macroeconomic environment, consumer disposable income, and the persistence of promotional activity.

Management Commentary and Tone

• CEO Rahul Goyal stated that the company is laying groundwork for long-term success under the "Horizon 2030" strategy, focusing on portfolio transformation, cost structure simplification, and returning cash to shareholders, though current outcomes are not yet scaled enough to offset third-quarter headwinds.
• CFO Tracey Joubert noted that financial results reflect both the benefits of deliberate actions under Horizon 2030 and the impact of intensifying external headwinds, expressing confidence in the long-term strategy and the balance sheet capacity to manage cost pressures while investing in priorities.
• Management emphasized that the road ahead may not be linear but the objective is to preserve flexibility and build a stronger company.

Other Key Points

• Restructuring: The company recorded restructuring charges in both the Americas and EMEA&APAC segments, including employee-related charges and accelerated depreciation, with additional charges anticipated in the remainder of 2026 and 2027.
• Share Repurchases: The company paid $254.9 million for share repurchases for the nine months ended September 30, 2026, compared to $332.8 million in the prior year.
• Dividends: Cash dividends paid were $273.1 million for the nine months ended September 30, 2026, compared to $285.7 million in the prior year.
• Goodwill Impairment: A $3,645.7 million partial goodwill impairment charge was recorded in the Americas reporting unit in the third quarter of 2025, which cycled out of the current year's results.
• Intangible Impairments: Prior year included a $273.9 million impairment charge related to definite-lived intangible assets (Blue Run Spirits and Staropramen brands).
• Investment in Fevertree: The company recorded a $17.7 million favorable change in the fair value of its investment in Fevertree Drinks plc for the quarter.
• Litigation: A $60.6 million payment related to the final resolution of the Keystone litigation case was cycled out of the prior year's cash flow.
• ERP Implementation: Costs were incurred related to the global modernization ERP system implementation project, partially offsetting MG&A reductions.