Shares of Molson Coors Beverage (NYSE:TAP) fell by 10.6% on Thursday in the wake of the company's release of first-quarter financial results that showed the business is being hit hard by the COVID-19 pandemic.
For the quarter, Molson Coors recorded net sales of $2.1 billion, an 8.7% year over year decrease. It also reported a GAAP net loss of $117 million, after reporting GAAP net income of $151.4 million during Q1 2019. These subpar financial results were, without a doubt, caused by the COVID-19 outbreak, as social-distancing measures and the closures of bars and restaurants led to lower sales volumes for Molson Coors and its peers in the alcoholic beverage industry. President and CEO Gavin Hattersley said:
The first quarter of 2020 was unlike any other in our company's long history. In the early part of the quarter, we saw mounting confidence and enthusiasm for our plans and for our brands-internally and externally. Despite the early progress, our first quarter results were disproportionately affected by the coronavirus, a pandemic that has changed the world -- not just for our business, and our industry, but for the entire global economy.
Molson Coors is taking steps both to protect the health of its employees and to mitigate the impact of the pandemic on its business. For instance, in an effort to cut expenses, the company opted to reduce capital expenditures for 2020, decrease marketing spending, and furlough some employees in its hospitality business. Only time will tell whether these measures will help the company's stock -- which is down by about 24% year to date -- recover from the coronavirus market downturn, but Thursday's sell-off wasn't surprising given the poor first-quarter results.