Molson Coors's (NYSE:TAP) Q4 Earnings Results: Revenue In Line With Expectations

Kayode Omotosho /
2024/02/13 7:04 am EST

Beer company Molson Coors (NYSE:TAP) reported results in line with analysts' expectations in Q4 FY2023, with revenue up 6.1% year on year to $2.79 billion. It made a non-GAAP profit of $1.19 per share, down from its profit of $1.30 per share in the same quarter last year.

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Molson Coors (TAP) Q4 FY2023 Highlights:

  • Revenue: $2.79 billion vs analyst estimates of $2.78 billion (small beat)
  • EPS (non-GAAP): $1.19 vs analyst estimates of $1.12 (6.4% beat)
  • Free Cash Flow of $297.1 million, down 46.3% from the previous quarter (beat)
  • Gross Margin (GAAP): 37%, up from 35.1% in the same quarter last year (beat vs. expectations of 36.6%)
  • Sales Volumes were up 0.8% year on year (roughly in line)
  • Market Capitalization: $13.39 billion

Sporting an impressive roster of iconic beer brands, Molson Coors (NYSE:TAP) is a global brewing giant with a rich history dating back more than two centuries.

Beverages and Alcohol

The beverages and alcohol category encompasses companies engaged in the production, distribution, and sale of refreshments like beer, wine, and spirits, along with soft drinks, juices, and bottled water. These companies' performance is influenced by brand strength, marketing strategies, and shifts in consumer preferences. Changing consumption patterns are particularly relevant and can be seen in the explosion of alcoholic craft beer drinks or the steady decline of non-alcoholic sugary sodas. The industry is highly competitive, with a diverse range of products from large multinational corporations, niche brands, and startups vying for market share. It's also subject to varying degrees of government regulation and taxation, especially for alcoholic beverages.

Sales Growth

Molson Coors is one of the larger consumer staples companies and benefits from a well-known brand, giving it customer mindshare and influence over purchasing decisions.

As you can see below, the company's annualized revenue growth rate of 6.5% over the last three years was mediocre for a consumer staples business.

Molson Coors Total Revenue

This quarter, Molson Coors grew its revenue by 6.1% year on year, and its $2.79 billion in revenue was in line with Wall Street's estimates. Looking ahead, Wall Street expects revenue to remain flat over the next 12 months, a deceleration from this quarter.

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Volume Growth

Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there’s a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive.

Molson Coors's quarterly sales volumes have, on average, stayed about the same over the last two years. This stability is normal because the quantity demanded for consumer staples products typically doesn't see much volatility. Molson Coors Year-On-Year Volume Growth

In Molson Coors's Q4 2023, year on year sales volumes were flat. This result was a well-appreciated turnaround from the 2% year-on-year decline it posted 12 months ago, showing the company is heading in the right direction.

Key Takeaways from Molson Coors's Q4 Results

It was encouraging to see Molson Coors slightly top analysts' EPS expectations this quarter on roughly in line volumes and small beat on revenue. We were also happy its gross margin narrowly outperformed Wall Street's estimates. On the other hand, its operating margin missed analysts' expectations. It wasn't a perfect quarter for Molson Coors, but it was a solid one with no major surprises. The stock is flat after reporting and currently trades at $62.11 per share.

So should you invest in Molson Coors right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.