Molson Coors says third-quarter profit tumbled 23 percent despite revenue growth because it was burdened by higher costs, the poor U.S. economy and surprisingly weak sales in the U.K.
Molson Coors Brewing Co. and other major beer makers have struggled with weak sales as their core consumers — young men — face particularly high levels of unemployment in the down economy. Like many other U.S. firms, the Denver-based maker of Coors Light, Molson Canadian and Carling also is struggling with higher costs for fuel, packaging and ingredients.
Molson said Wednesday that its net income fell to $197.4, or $1.06 per share, for the July-September period from $256.1 million, or $1.38 per share, a year ago. Excluding one-time items related to writing down its Sparks brand and other costs, earnings came to $1.14 per share. Analysts expected $1.25 per share, according to FactSet.
Revenue rose 9 percent to $954.4 million on higher prices in the U.S. and other markets despite that total worldwide beer volume fell 0.8 percent during the quarter. Revenue was above the $942.4 million analysts had been expecting.
In the U.S., Molson Coors said it had higher costs related to information systems spending, higher marketing costs and a depreciation charge.
In the U.K., the company faced lower volume, lower prices and higher marketing costs and sales to retailers declined 3 percent due to the weak economy and lower off-premise, or take-home, volume.
“We did not expect the degree of softness in the U.K. market,” said CEO Peter Swinburn.
Molson shares fell $1.26, or 3.1 percent, to $39.07 in trading.