Molson Coors shares have fallen 14 per cent since the start of 2025.Nathan Denette/The Canadian Press
Molson Coors Beverage Co. TAP-N has cut its financial forecasts for the second straight quarter, blaming softer demand from consumers in the United States and other markets, and higher costs for cans because of tariffs on aluminum.
The maker of Molson Canadian and Coors Light said Tuesday it now expects underlying earnings per share to fall as much as 10 per cent this year, reversing its previous forecast of low single-digit growth. It also trimmed its guidance for sales while maintaining its outlook on free cash flow.
Molson Coors chief executive Gavin Hattersley said sentiment among American consumers in particular is being bruised by a variety of factors, including geopolitical events and immigration policies, and hasn’t recovered in recent months. That, as well as the company’s lower-than-expected U.S. market-share performance and “higher-than-expected indirect tariff impacts” on aluminum pricing, has convinced management to lower the financial outlook for the year.
Consumer confidence is cyclical and will return but “we’re not seeing any signs of that changing in the balance of the year,” Mr. Hattersley told analysts on a conference call. Aluminum prices as measured in Midwest Premium, the reference point for prices in the U.S. and Canada, should also eventually “revert to the mean” from the 180-per-cent jump since January, he said.
Molson Coors shares inched up 1.30 per cent Tuesday on the New York Stock Exchange, closing at US$49.24, as the second-quarter profit of US$2.05 a share beat analyst estimates. The shares have fallen 14 per cent since the start of the year.
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Many U.S. and Canadian businesses have frozen investment and hiring in response to the uncertainty brought on by economic policy changes introduced by U.S. President Donald Trump and heightened inflation. Meanwhile, consumers are cutting back on items they consider non-essential, including beer and other alcohol.
The macroeconomic environment has had a disproportionate effect on lower-income Hispanic consumers in the U.S., Mr. Hattersley said. Those consumers are making fewer beer runs and buying singles instead of packs or cases, he said.
Convenience-store giant Alimentation Couche-Tard Inc. echoed those views on U.S. retail demand in June, saying that while it isn’t getting worse, it isn’t improving either. “We see our consumers, lower end, lower middle-end consumers, continuing to be very selective with their dollars,” chief executive Alex Miller told analysts at the time.
Tariffs implemented by Mr. Trump, which have doubled to 50 per cent since June, are also biting hard. Molson Coors said it expects incremental costs of between US$20-million and US$35-million in the second half of the year as levies boost the price of the U.S. Midwest Premium.
While Molson Coors is a global business, it produces the vast majority of its beers and beverages in the market in which they are sold. In Canada, the corporation operates plants in Toronto; Longueuil, Que.; and British Columbia’s Fraser Valley, among other places. According to the company, it has similar exposure to the Midwest Premium in Canada as it does in the U.S.
Molson Coors has for years been trying to broaden its product lineup and reinvent itself as a beverage company to respond to a general trend away from beer.
In February, it announced a deal with Fever-Tree, a supplier of tonics and cocktail mixers, to co-manufacture and market its products in the U.S. Last year, it sold four craft-beer breweries to Tilray Brands Inc., reducing its footprint in a sector of the market that was once booming but has fallen on tougher times in recent years.
The company, which now has its administrative headquarters in Chicago, is the result of a merger between Montreal-based Molson and Colorado-based Coors in 2005. The Molson and Coors families no longer hold a majority stake in the brewer but still wield significant influence through their board seats and strong historical ties.