Molson Coors faces $30m Midwest Premium hit as Q3 results disappoint

Molson Coors Beverage Company reported a USD 30 million unfavourable impact from Midwest Premium pricing in the third quarter, adding to inflationary pressures across materials, logistics and manufacturing expenses. The brewing company also reported lower-than-expected revenue and reduced its full-year financial outlook, sending its shares down 3.36 per cent in pre-market trading on Thursday.

The company reported net sales of USD 2.93 billion for the third quarter, falling short of analysts' expectations of USD 2.94 billion. Revenue declined 1.6 per cent compared with the corresponding period last year, while sales decreased 1.2 per cent on a constant currency basis. The decline was primarily driven by a 3.0 per cent fall in financial volume, partly offset by favourable pricing and sales mix.

Adjusted earnings per share stood at USD 1.46, slightly above the analyst consensus of USD 1.45.

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Midwest Premium adds to cost pressures

Molson Coors identified inflation in materials, logistics and manufacturing expenses as key challenges during the quarter. These pressures included approximately USD 30 million in unfavourable impact from Midwest Premium pricing, adding to the company's operating cost burden.

The development highlights the impact of aluminium market pricing on beverage manufacturers, particularly those exposed to metal packaging costs. The Midwest Premium is an important component of the delivered price of aluminium in the US market, and changes in the premium can affect costs for downstream users.

Commenting on the quarterly performance, Tracey Joubert, Chief Financial Officer of Molson Coors Beverage Company, said: "Our third quarter financial results reflect both the benefits of the deliberate actions we’ve taken under Horizon 2030 and the impact of external headwinds that intensified as the year progressed."

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Molson Coors lowers full-year financial guidance

The company now expects net sales to decline by 1 per cent to 2 per cent on a constant currency basis, compared with its previous guidance of flat growth to a decline of 1 per cent. The midpoint of the revised range indicates an anticipated decline of 1.5 per cent, compared with the previous midpoint of no change.

Its outlook for underlying earnings per share has also weakened. Molson Coors now expects underlying EPS to decrease by 16 per cent to 19 per cent compared with 2025, against its earlier forecast of an 11 per cent to 15 per cent decline. The midpoint of the new range represents a 17.5 per cent fall, compared with 13 per cent under the previous guidance.

The company also reduced its underlying free cash flow forecast to USD 1 billion, plus or minus 10 per cent, from its earlier projection of USD 1.1 billion.

Global brand volumes decline

Molson Coors reported a 4.9 per cent decline in global brand volume during the third quarter, reflecting weaker performance across its operating segments. Volume in the Americas decreased by 5.3 per cent, while the EMEA&APAC segment recorded a 3.8 per cent decline.

Underlying income before income taxes fell 17.4 per cent on a constant currency basis to USD 349 million.

However, underlying free cash flow for the first nine months of the year reached USD 852 million, increasing by USD 69.9 million compared with the corresponding period last year.

The combination of weaker volumes, cost inflation and the impact of Midwest Premium pricing has added pressure to Molson Coors' financial performance, prompting the company to adopt a more cautious outlook for the remainder of the year.

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