Please ensure Javascript is enabled for purposes of website accessibility

Why Molson Coors Stock Fell 21% in March

By Demitri Kalogeropoulos - Apr 2, 2020 at 7:45AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The cancellation of all forms of public entertainment promises to hurt the beer business.

What happened

Molson Coors (TAP 0.02%) stock underperformed a weak market last month, falling 21% compared to a 12.5% drop in the S&P 500, according to data provided by S&P Global Market Intelligence.

The decline put the beer giant in bear market territory along with most of its peers, having fallen 30% so far in 2020 compared to a 24% drop in broader indexes.

Two women toast with beers.

Image source: Getty Images.

So what

Molson Coors continues to produce its alcoholic beverages despite the COVID-19 pandemic, and in fact its consumer staples status means it is officially an essential part of the economy that must remain operational. However, the company saw an abrupt pause in several important revenue lines last month.

These include the widespread closing of restaurants and bars, plus the cancellation of sporting events, concerts, and nearly every other form of public entertainment across key markets like the U.S. and Canada. On-premise beer sales, as a result, plunged in recent weeks even as demand spiked at supermarket chains and other retailers.

Now what

Molson Coors will announce its latest earnings results on April 30, and investors will soon learn the scope of COVID-19's impact on sales and earnings. The company will likely discuss its liquidity position, too, since its loss of revenue might require significant cost cuts and additional debt to see the business safely through this historic operating disruption.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Molson Coors Beverage Company Stock Quote
Molson Coors Beverage Company
$56.71 (0.02%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.