Molson Coors Beverage Company — Second Quarter 2026 Earnings Summary

Financial Performance

• Net sales decreased 3.3% reported and 3.6% in constant currency to $3,096.5 million for the three months ended June 30, 2026, compared to $3,200.8 million in the prior year.
• U.S. GAAP income before income taxes decreased 49.0% to $283.1 million, down from $554.9 million.
• Underlying (Non-GAAP) income before income taxes decreased 27.8% in constant currency to $383.2 million, down from $531.5 million.
• U.S. GAAP net income attributable to MCBC was $231.7 million, or $1.23 per diluted share, compared to $428.7 million or $2.13 per share in the prior year.
• Underlying (Non-GAAP) diluted earnings per share decreased 22.9% to $1.58, compared to $2.05 in the prior year.
• Financial volume decreased 5.4% to 19.734 million hectoliters, and brand volume decreased 4.8% to 19.628 million hectoliters.
• Cost of goods sold (COGS) increased 6.0% on a reported basis; COGS per hectoliter increased 12.1% reported, primarily driven by $98.0 million in unfavorable unrealized mark-to-market commodity derivative positions and $40 million in unfavorable Midwest Premium pricing impacts.
• Marketing, general & administrative (MG&A) expenses increased 3.7% on a reported basis, driven by higher general and administrative expenses related to ERP implementation and lower prior-year incentive compensation.
• Net cash provided by operating activities for the six months ended June 30, 2026, was $820.4 million, an increase of $192.8 million from the prior year.
• Underlying (Non-GAAP) free cash flow for the six months ended June 30, 2026, was $513.8 million, an increase of $220.3 million from the prior year.
• Total debt as of June 30, 2026, was $7,709.6 million; cash and cash equivalents totaled $2,128.1 million, resulting in net debt of $5,581.5 million.
• Net debt to underlying EBITDA ratio was 2.53x as of June 30, 2026, compared to 2.41x in the prior year.
• U.S. GAAP effective tax rate was 22% for the quarter, down from 24% in the prior year; underlying effective tax rate was 22%, down from 23%.

Guidance and Future Outlook

• The company reaffirmed full-year 2026 guidance despite macroeconomic headwinds.
• Net sales are expected to be flat, plus or minus 1%, versus 2025 on a constant currency basis.
• Underlying income before income taxes is expected to decline 15% to 18% versus 2025 on a constant currency basis.
• Underlying earnings per share are expected to decline 11% to 15% versus 2025.
• Capital expenditures are expected to be $650 million, plus or minus 5%.
• Underlying free cash flow is expected to be $1.1 billion, plus or minus 10%.
• Underlying depreciation and amortization is expected to be $720 million, plus or minus 5%.
• Consolidated net interest expense is expected to be $260 million, plus or minus 5%.
• Underlying effective tax rate is expected to be in the range of 22% to 24%.
• U.S. financial volumes are expected to slightly outpace brand volumes in the second half of the year.
• Commodity and logistics costs are expected to remain elevated, with the Midwest Premium impact expected to exceed approximately $130 million for the full year.
• MG&A expenses are expected to decrease in the second half of the year compared to the prior year.

Business Segments and Product Lines

• Americas Segment: Net sales decreased 4.1% to $2,402.4 million; underlying income before income taxes decreased 22.6% in constant currency to $396.1 million. Financial volume decreased 6.4% and brand volume decreased 5.3%, driven by lower shipments in core and value brands and unfavorable shipment timing. Price and sales mix favorably impacted sales by 2.3%.
• EMEA&APAC Segment: Net sales decreased 0.4% to $700.8 million; underlying income before income taxes decreased 44.3% in constant currency to $41.0 million. Financial volume decreased 2.8% and brand volume decreased 3.4%, primarily due to soft market demand and a heightened competitive landscape in the U.K. Price and sales mix favorably impacted sales by 0.8%.
• Brand Performance: Coors Banquet and Peroni continue to perform well. Fever-Tree shows continued momentum after more than a year of partnership. Monaco Cocktails delivered strong performance in its first quarter as part of Molson Coors.
• Restructuring: The Americas Restructuring Plan resulted in $0.7 million of employee-related charges and $3.5 million in accelerated depreciation in the quarter. EMEA&APAC restructuring actions included $0.3 million in employee-related charges and $2.5 million in accelerated depreciation.

Market and Competitive Landscape

• The company navigated heightened global macroeconomic headwinds affecting consumer behavior and input costs.
• The Americas segment faced a competitive environment requiring disciplined execution to improve share performance.
• The EMEA&APAC segment faced a heightened competitive landscape in the U.K.
• Premiumization trends contributed to favorable sales mix in both the Americas and EMEA&APAC segments.

Risks and Challenges

• Persistent macroeconomic volatility and inflationary pressures on commodity and logistics costs.
• Unfavorable changes in unrealized mark-to-market commodity derivative positions ($98.0 million impact in the quarter).
• Lower financial volumes in both Americas and EMEA&APAC segments.
• Unfavorable mix driven by premiumization and volume deleverage.
• Costs associated with global modernization ERP system implementation.
• Restructuring charges related to the Americas Restructuring Plan and EMEA&APAC operational changes.
• Decision to exit a brand in the Americas segment, resulting in $8.1 million of accelerated amortization.

Management Commentary and Tone

• CEO Rahul Goyal stated the company made progress on the Horizon 2030 strategy while navigating macroeconomic headwinds.
• CFO Tracey Joubert noted that second-quarter results largely matched expectations and highlighted progress on cost savings initiatives.
• Management emphasized a disciplined approach to balancing capital allocation priorities, including M&A, debt refinancing, dividends, and share buybacks.
• The tone reflects confidence in the Horizon 2030 strategy and the ability to mitigate macroeconomic impacts through cost savings and scale investments.

Analyst Questions and Answers

• No specific analyst questions and answers are included in the provided press release text.

Other Key Points

• Capital was deployed toward value-added M&A in support of the Horizon 2030 strategy during the second quarter.
• The company enhanced financial flexibility through a series of debt refinancing transactions.
• Subsequent to June 30, 2026, the company repaid $2.0 billion of 3.0% senior notes using proceeds from new $500 million and $1.0 billion senior notes due in 2031 and 2036, respectively, plus cash on hand.
• Cash dividends paid for the six months ended June 30, 2026, totaled $183.7 million.
• Share repurchases totaled $211.0 million for the six months ended June 30, 2026.
• On July 16, 2026, the Board declared a dividend of $0.48 per share, payable September 18, 2026.
• The company recorded a $60.6 million payment in the prior year for the final resolution of the Keystone litigation case, which impacted prior-year working capital comparisons.