Molson Coors Beverage Company — Third Quarter 2026 Earnings Summary

Financial Performance:

• 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.
• U.S. GAAP income before income taxes was $342.2 million, a $3,837.7 million increase from a loss of $3,495.5 million in the prior year.
• Underlying (Non-GAAP) income before income taxes decreased 17.4% in constant currency to $349.0 million.
• U.S. GAAP net income attributable to MCBC was $271.5 million ($1.45 per diluted share), compared to a net loss of $2,927.6 million ($14.79 per share) in the prior year.
• Underlying (Non-GAAP) diluted earnings per share decreased 12.6% to $1.46.
• Financial volume decreased 3.0% to 18.809 million hectoliters; brand volume decreased 4.9% to 19.376 million hectoliters.
• Cost of goods sold increased 5.3% reported, driven by higher costs per hectoliter (up 8.6% reported) due to material, logistics, and manufacturing inflation, including a $30 million unfavorable impact from Midwest Premium pricing and $14.7 million in unfavorable mark-to-market commodity derivative positions.
• Marketing, general & administrative expenses decreased 7.7% reported, 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.
• Underlying (Non-GAAP) free cash flow for the nine months ended September 30, 2026, was $852.0 million.
• 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.
• Net debt to underlying EBITDA ratio was 2.53x as of September 30, 2026, compared to 2.28x in the prior year.
• Effective tax rate increased to 23% for the quarter (from 16% in the prior year); underlying effective tax rate was 23% (from 22%).

Guidance and Future Outlook:

• Adjusted 2026 net sales guidance to a decline of 1% to 2% on a constant currency basis (previously flat, plus or minus 1%).
• Adjusted 2026 underlying income before income taxes guidance to a decline of 21% to 24% versus 2025 on a constant currency basis (previously 15% to 18%).
• Adjusted 2026 underlying earnings per share guidance to a decline of 16% to 19% versus 2025 (previously 11% to 15%).
• Capital expenditures guidance remains $650 million, plus or minus 5%.
• Underlying free cash flow guidance adjusted to $1.0 billion, plus or minus 10% (previously $1.1 billion).
• Underlying depreciation and amortization guidance is $720 million, plus or minus 5%.
• Consolidated net interest expense guidance is $260 million, plus or minus 5%.
• Underlying effective tax rate guidance is in the range of 22% to 24%.
• Outlook assumes softer global beer industry volume trends observed in Q2 and Q3 will persist in Q4 2026.
• 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 Midwest Premium impact 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% to $2,232.8 million; 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 core and value brands in the U.S. and industry softness in Canada. Price and sales mix increased 1.9%.
• EMEA&APAC Segment: Net sales decreased 2.7% to $701.4 million; 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 increased 1.0%.
• Horizon 2030 Strategy: Management is executing on portfolio transformation, cost structure simplification, and cash return to shareholders. Restructuring actions in the Americas and EMEA&APAC segments include brewery closures and supply chain optimization.
• Product Mix: Premiumization contributed to favorable sales mix in the EMEA&APAC segment.

Market and Competitive Landscape:

• The U.K. market faces a heightened competitive landscape and soft market demand.
• The global beer industry is experiencing softer volume trends in the second and third quarters of 2026.
• Persistent promotional activity in the U.K. is impacting performance.
• The company cites industry softness in Canada as a volume driver.

Risks and Challenges:

• Persistent cost inflation related to materials, logistics, and manufacturing expenses.
• Unfavorable foreign currency impacts, particularly the strengthening of the U.S. dollar against the Euro and British pound.
• Unfavorable mark-to-market commodity derivative positions.
• Midwest Premium pricing impact.
• Global macroeconomic environment impacts on consumer behavior.
• Lower financial volume trends.

Management Commentary and Tone:

• CEO Rahul Goyal stated the company is laying groundwork for long-term success through the Horizon 2030 strategy but acknowledged outcomes are not yet scaled enough to offset third-quarter headwinds.
• CFO Tracey Joubert noted that financial results reflect both deliberate actions under Horizon 2030 and intensified external headwinds, expressing confidence in the long-term strategy and balance sheet capacity to manage cost pressures.
• Management emphasized a focus on preserving flexibility, continuing investment, and building a stronger company.

Other Key Points:

• Goodwill Impairment: A $3,645.7 million partial goodwill impairment charge was recorded in the Americas reporting unit in the third quarter of 2025; no such charge occurred in the current quarter.
• Intangible Impairments: A $273.9 million impairment related to intangible assets (Blue Run Spirits and Staropramen) was recorded in the prior year; no such charge occurred in the current quarter.
• Share Repurchases: The company paid $254.9 million for share repurchases for the nine months ended September 30, 2026.
• Dividends: Cash dividends paid were $273.1 million for the nine months ended September 30, 2026.
• Fevertree Investment: The company recorded a $17.7 million favorable change in the fair value of its investment in Fevertree Drinks plc in the third quarter of 2026.
• ERP Implementation: Costs were incurred related to the global modernization ERP system implementation project, partially offsetting MG&A savings.
• Keystone Litigation: A $60.6 million payment for the final resolution of the Keystone litigation case was made in the prior year.
• Restructuring: Additional charges related to committed restructuring actions in the Americas and EMEA&APAC segments are anticipated, with the majority expected in the remainder of 2026 and 2027.