Molson Coors’ second-quarter results are winning praise from shareholders.
The beer company is the best performer in the S&P 500 index Wednesday, lately rallying 6 percent on the heels of good earnings that were driven by successful new products in the U.S. and higher beer prices.
Though Molson Coors’ worldwide beer volume slid 0.9%, investors appeared pleased that sales and profit results exceeded Wall Street’s expectations. The company reported net sales grew 0.9% to $1.19 billion, lifting underlying after-tax income 7.9% to $1.57 a share. Analysts surveyed by Bloomberg had expected $1.18 billion in sales on $1.47 in profit.
The results are the first Molson Coors has reported since disclosing CEO Peter Swinburn will retire at the end of the year after a 40-year career in the beer business. He will be succeeded by the company’s top European executive.
Volume jumped 22% for the international segment due to strong Coors Light growth in Mexico and Latin America, as well as growth in India. Volume fell 1.3% in Europe, and also softened in Canada.
Separately, a Molson Coors-SABMiller joint venture known as MillerCoors reported second-quarter underlying net income climbed 8% to $445.7 million in the second quarter, boosted by a 2.2% jump in sales. MillerCoors, which sells beers in the U.S. and Puerto Rico, reported strong volume growth for the Redd’s and Leinenkugel’s franchises, while Miller Fortune boosted market share in the latest quarter. Sales to retailers declined for Coors Light and Miller Lite.
MillerCoors this week began to stock shelves with the latest apple-flavored line extension of Redd’s, while Miller Fortune has a higher-than-average alcohol content and is maltier than the company’s other products, angling to court Millennial drinkers. Both are fairly new franchises for MillerCoors.
The strong early performance for some of the brewer’s newer offerings comes as big brewers look to take on rising interest in the craft beers segment and also win back market share stolen from spirits brands in the U.S. in recent years. Small and independent craft brewers in the U.S. sold about 10.6 million barrels of beer in the first half of 2014, up 18% from the prior year’s level. That growth signals that smaller players are still performing far better than large brewers like MillerCoors.