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Molson Coors Sales Hurt by Continued Beer Slump

By Demitri Kalogeropoulos – Updated Feb 12, 2020 at 6:24PM

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The beer giant forecast another tough fiscal year ahead in 2020.

Molson Coors (NYSE: TAP) on Wednesday announced fiscal fourth-quarter earnings results that showed continued pressure on the business from changes in consumer tastes for alcoholic beverages.

Sales decreased 1% for the full 2019 year as sales volumes fell 3.5%. The owner of blockbuster global beer franchises including Coors Light and Miller Light posted a 3% decline in adjusted earnings for the year .

Friends drink beer at a bar.

Image source: Getty Images.

What happened?

Molson Coors is struggling to transform its portfolio as consumers shift their spending away from light beer and toward niches like ciders and hard seltzer waters. While brands like Miller Light are seeing reduced volumes, Truly hard seltzer, made by Boston Beer, is enjoying triple-digit volume increases right now.

Looking ahead

Molson Coors is working on a range of products aimed at extending its reach beyond the beer aisle, including through recent launches in niches like kombucha, hard coffee, and cider. Management is also slashing costs in a bid to raise resources that the company can direct toward supporting its new and existing franchises.

Molson Coors revealed progress on both of those initiatives in the fourth quarter, and that success helped push average selling prices higher while protecting earnings. Yet the consumer staples giant's initial outlook for fiscal 2020 predicts another year of sluggish sales growth ahead for the business even as profitability improves.

Demitrios Kalogeropoulos owns shares of Boston Beer. The Motley Fool owns shares of and recommends Boston Beer. The Motley Fool has a disclosure policy.

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