With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are beverages, food consumer products, and food production.

Fortune Sector Leaders: Food, Beverages, and Tobacco

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-314-Molson Coors Beverage

Formed in 2005 through the merger of Molson of Canada, and the U.S.-based Coors, the drink and brewing company is one of the largest in the world, selling familiar brands such as Blue Moon, Miller Light, and Topo Chico Hard Seltzer.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-298-Molson-Coors-Beverage

The Chicago brewing company is among the world's largest and is behind beer brands such as Blue Moon, Miller High Life, and Leinenkugel's—not to mention Molson and Coors—as well as the cider brand Crispin.

This year's Fortune 500 marks the 65th running of the list.

Everybody loves an up-and-comer: 2019's top three-year performers in revenues, profits, and stock returns.

100 Fastest-Growing Companies

This year's Fortune 500 marks the 64th running of the list.

Everybody loves an up-and-comer: 2018's top three-year performers in revenues, profits, and stock returns.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Molson Coors Beverage Company manufactures, markets, and sells beer and other malt beverage products across the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company’s portfolio includes a range of flavored malt beverages, hard seltzers, craft beers, spirits, and ready-to-drink beverages. Its products are offered under a variety of brands, including Blue Moon, Coors Light, Miller Lite, Carling, and Staropramen, as well as premium and economy brands. Molson Coors serves a diverse customer base through multiple channels and continues to expand its offerings to meet evolving consumer preferences.

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Q4 2025 & Consumer Analyst Group of New York Conference (CAGNY) 2026

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Molson Coors Beverage (TAP): Company Profile, Stock Price, News, Rankings

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Molson Coors Beverage

molson coors beverage

Good morning, and welcome to the Molson Coors Beverage Company Second Quarter Fiscal Year twenty twenty five Earnings Conference Call. Relations.

Thank you, operator, and hello, everyone. Our discussion today includes forward looking statements within the meaning of U. S. Federal securities laws. For more information, please refer to the forward looking statements disclosure in our earnings release.

In addition, the definitions of or reconciliations for any non U. S. GAAP measures are included in our earnings release. Given our quarterly performance, including financial and operational metrics and drivers is detailed in our earnings release and earnings slides, which were made available earlier today on the IR section of our website. We will focus our prepared remarks on what we believe is top of mind for you, and that is the industry, how we're responding, capital allocation and our financial outlook.

And please note that given the current environment, we are providing a more detailed than typical review of our 2025 guidance drivers. We will then take your questions. And as always, we ask that you limit yourself to one question and then if needed, return to the queue. With that, I'll pass it over to you, Gavin.

Thank you, Tracy. Hello, everybody, and thank you for joining the call. During the second quarter, we continued to execute against our strategic plans to support our long term growth objectives and to return cash to shareholders while navigating a challenging and volatile macro environment. As a result of the uncertainty around the effects of geopolitical events and global trade and immigration policies, consumer sentiment in The U. S.

Has remained at relatively low historical levels. This has continued to pressure consumption trends. These macro impacts in The U. S. Have had a disproportionate effect on the lower income and Hispanic consumer.

And within beer, these consumer segments have driven a reduction in the number of buyers as well as spend with a shift to singles in the second quarter. In addition, while less impactful, certain regions of The U. S. Experienced some severe weather conditions during the quarter, which had a notable impact on the important Memorial Day weekend. These factors have resulted in a much softer U.

S. Beer industry so far this year than we had previously expected. Recall our guidance issued on May 8 that assumed The U. S. Industry would improve for the balance of the year from down approximately 5% in the first quarter to levels closer to that of the last several years, which averaged down around 3%.

But in the second quarter, the industry continued to be down around 5%. Further, the Midwest premium pricing, which is a component of our aluminum cost, has been indirectly impacted by recent U. S. Tariff announcements, causing another substantial and unexpected spike in the second quarter. For perspective, and as you can clearly see on Slide 19 of our earnings deck, in July, the Midwest premium jumped to $0.68 per pound, an increase of over 180% since January.

As a result of these macro drivers and to a lesser degree lower than expected share performance, we are reducing our top and bottom line guidance for 2025. We now expect net sales revenue to decline 3% to 4% on a constant currency basis as compared to a low single digit decline previously. The range assumes U. S. Industry volume will decline between 46% for the second half of the year.

We now expect underlying pretax income to decline 12% to 15% on a constant currency basis as compared to a low single digit decline previously. The range includes for the second half of the year, incremental costs specific to the Midwest premium of $20,000,000 to $35,000,000 which assumes a respective price per pound of 0.6 to $0.75 This is partly offset by lower expected incentive compensation given the change in outlook. As a result, we now expect underlying earnings per share to decline 7% to 10% as compared to low single digit growth. However, we are reaffirming our underlying free cash flow guidance of $1,300,000,000 plus or minus 10% as we expect higher cash tax benefits and favorable working capital to offset the guidance decline for underlying pretax income. Now Tracy will speak to our guidance in more detail in a moment.

But first, I want to stress that we continue to view the incremental softness in the industry performance this year as cyclical, driven by the macroeconomic environment. And this belief, in our view, is clearly demonstrated by the execution of our share repurchase program, well ahead of our original expectations. While U. S. Consumer basket sizes are smaller in the current environment, the percent of alcohol in those baskets has remained the same.

And legal drinking age consumers continue to engage with beer at similar levels across all generations and compared to historical levels, it's the occasions that are less. Recognizing this, our strategy was built to develop a portfolio that appeals to a wide range of preferences and captures more occasions. So as we navigate these macro pressures, we are continuing to execute the strategy and prudently invest behind our business. To build on the strength of our core power brands, to premiumize our business in both beer and beyond beer and to develop and leverage our capabilities and partnerships to support profitable growth. In The U.

S, our core power brands, Coors Light, Miller Lite and Coors Banquet have retained the unprecedented shelf space gains achieved in 2024. Collectively, they commanded a 15.2% volume share of the industry for the first half of the year. Recall that three years ago, these brands collectively commanded 13.4% of The U. S. Industry.

And what's clear in the scanner data and as shown on Slide 20 is that these brands have held most of their share gains from the last two years through the second quarter. Banquet, in particular, has been a strong performer. After sixteen consecutive quarters of share growth, it was a top five volume share growth brand in the quarter. And given it's only about half the buying assets of Coors Light, we believe there is significant distribution runway ahead. In fact, Banquet gained over 15% distribution in the first half of this year, growing across every channel and on top of over 15% growth in the same period last year.

In Canada, despite a challenging industry backdrop, the Molson family of brands with its deep Canadian roots posted another quarter of volume share gains. While Coors Light, which is proudly locally produced, held its number one light beer position in the industry. In EMEA and APAC, the industry in The UK has remained highly competitive. And in the Central And Eastern Europe region, it continues to experience softness related to escalating global, local political and economic tensions. But our brands like Carling in The UK and Ajusco in Croatia remain segment leaders in their respective markets, which we intend to continue to support with targeted commercial trends.

Turning to premiumization. As we have said for several quarters now, in The U. S, there has been a shift to value seeking behaviors, but it has been focused on pack size rather than on brands. And despite the pressure on the consumer, the industry continues to premiumize, albeit currently at a slower pace. So we remain committed to our premiumization plans, which are focused on both beer and Beyond Beer.

Over the last few years, we have talked a lot about our premiumization successes outside The U. S. In EMEA and APAC, it's been fueled by a hugely successful innovation in Madrid, which we believe still has significant runway, both in its initial market of The UK and through recent geographic and brand extensions. In fact, in the latest twelve weeks as of June 14, Madri had overtaken Peroni to become the number two brand in the world's lager segment and number four beer overall in terms of value across total trade in The UK. In Canada, premiumization has been led by the ongoing strength of Miller Lite and our flavor portfolio.

But in The U. S, our largest market, we under index in above premium, which makes it a big opportunity. Our Pironi plans that began in the second quarter are starting to show positive results with the brand growing volume double digits in the last thirteen weeks through July 27, supported by continued growth in chain and on premise placements. And while smaller for now, we are encouraged by our innovations. Blue Non Al continues its rapid growth, and we are seeing growing placements for our new higher ABB brands, Blue Moon Extra, Simply Bold and Topo Chico Max Margarita.

These higher ABB brands not only support our push to expand in C stores, but are particularly timely given current value seeking behaviors. And while these innovations are helpful to their respective brand families, we recognize the challenges of their big flagship brands and are focused on stabilizing them. For example, with Blue Moon, we have completed the pack size conversion to 12 from 15 packs. This was a near term volume headwind, but it's very positive for margin. In the on premise, which is a big channel for Blue Moon, we saw dollar share trend improvement during the second quarter.

And in the third quarter, we have been ramping up a new national advertising campaign with comedian, Colin Jost. And then there is Non Alk. Fever Tree is now our highest NSR for Hetli the brand aside from full strength spirits. While we began to consolidate Fever Tree into our financials in February, we only completed the distribution network transition in June. And the incoming distributors are very excited about the opportunity to significantly expand Fever Tree's presence across both existing and new channels and buying outlets.

It's early days, but the brand has already contributed meaningfully as the key driver of positive brand mix in The Americas. And while Fever Tree is already the world's leading supplier of premium carbonated mixes with the number one tonic and the number one ginger beer value in The U. S, we believe we can accelerate its growth in The U. S. Over time by leveraging the scale and strength of our distribution network combined with our marketing capabilities.

Now before I pass it to Tracy, I'll sum it up to say, it's been a difficult start to the year, but we view beer as resilient. And amid a challenging macro backdrop, we are focusing on what we can control to position our portfolio and our business for long term success. That means keeping our core power brands healthy, continuing to premiumize in EMEA and APAC and Canada and successfully executing our plans in The U. S. Leveraging our deep capabilities across our organization to support premiumization and focused innovation, supply chain efficiencies and commercial effectiveness and utilizing our enhanced financial flexibility to prudently invest in our business and return cash to shareholders. And with that, I will pass it to Tracey.

Thank you, Gavin. We are very pleased with the health of our balance sheet and our strong cash generation. And this is particularly important during a challenging macro environment as it allows us to continue to invest behind our brands to help ensure their long term health, to continue to make capital investments that support our growth initiatives and cost savings plans and to not only pay what we view as a competitive dividend but also execute a meaningful share repurchase program as we continue to believe our stock is a compelling investment. In fact, we have raised the quarterly dividend each year since 2021 and we have actively executed our current share repurchase plan since it was announced in October 2023. We have repurchased 9.4% of our past B shares outstanding.

It's an up to five year $2,000,000,000 plan and we have utilized almost 55% in under two years. For perspective, if we had executed it on a straight line basis, we would have only utilized 35% of the plan so far. With that, let's discuss our financial outlook. First, the impact of the global macro environment are multifaceted and difficult to predict. And while we have included in our guidance our best estimate of some of these factors, external drivers may significantly impact our actual results either up or down.

As it relates to tariffs, as we have previously said, while we are a global business, our products are generally made in the markets in which they are sold and with locally sourced ingredients. So we don't expect material direct impact from the loan tariffs on our input costs. That said tariffs do have indirect impacts like the recent spike in the Midwest premium pricing. While our extensive hedging program can help to mitigate some of the impact due to the guardrails of our program we are never fully hedged. Further given its uptake pricing and at times limited liquidity hedging the Midwest premium can be difficult and expensive and for these reasons the Midwest premium is one of the commodities for which we currently have the least amount of hedge coverage.

With that, let's discuss the drivers of the guidance Gavin outlined. Our top line guidance range now assumes The U. S. Industry is down 4% to 6% for the second half of the year. Our price mix assumptions are unchanged.

We expect an annual net price increase of 1% to 2% in North America in line with the average historical range. We expect mix benefits from cycling contract brewing from 2024 as well as from premiumization. We expect to grow above premium net brand revenue in EMEA and APAC and Canada as well as make progress on our U. S. Above premium initiative.

Cedar Tree and the consolidation of Zoho are incremental to the top line but we are also starting the divestiture of the smaller regional craft breweries in the 2024 and more significantly 2024 PEPPs and Labatt contract brewing volume as these contracts terminated at the end of last year. We expect the related Americas contract brewing headwind to be 1,900,000 hectoliters in 2025. In the first half, we cycled over 1,100,000 hectoliters and we will cycle over 450,000 hectoliters in the third quarter. Also last year we had higher than typical first half inventory builds related to the fourth wave strike which ended in mid May. As a result, STWs outpaced STRs by 1,100,000 hectoliters in the first half of last year.

This year STWs outpaced STR by 800,000 hectoliters in the first half. So year on year we had an approximate 300,000 hectoliter shipment timing headwind in the first half that we expect to reverse in the second half and mainly in the third quarter. Note that we did have some shipment trends catch up to STRs in the second quarter which had an approximate 150 basis points positive impact on U. S. Financial volume in the quarter.

We had previously not expected to build higher than last year given the cycling of the Fort Worth Strike. However, we were able to ship further ahead of STRs than expected due to the softer than anticipated industry demand. For a detailed review of these U. S. Shipment trends please refer to Slide 21.

Moving down the P and L, we expect mix benefits from lower contract brewing and increased premiumization as well as productivity improvements and cost savings to now be more than offset by higher volume deleverage given the industry volume trends as well as higher Midwest premium costs. For the full year, this would result in Midwest premium costs exceeding the prior year by $40,000,000 to $55,000,000 We now expect MG and A to be down slightly for the year as we now anticipate lower incentive compensation due to the adjusted outlook for this year. Also and to a lesser degree, the Fever Tree one time transition and integration fees were less than expected, totaling approximately $30,000,000 in the first half of the year. Again, these fees will be recovered through net sales over the next three years beginning in June. As for marketing, our plans are unchanged.

We intend to continue to put the right commercial pressure behind our key brands and innovations including our core power brands, Pironi, the Blue Moon family, Madri and our non alk portfolio. While marketing investment was down in the second quarter cycling up spend in the prior year period, we expect it to be up in the third quarter due to the timing of our commercial plans and lower spend in the same period last year. As a result, we expect marketing investment in the peak summer months to be consistent with prior year period levels. We are also slightly adjusting our net interest expense outlook. We now expect $225,000,000 plus or minus 5% as compared to $215,000,000 plus or minus 5% previously.

This is driven by lower cash balances including the impact of higher share repurchases as well as foreign currency impacts. And lastly, we are reaffirming our underlying free cash flow guidance of $1,300,000,000 plus or minus 10%. In closing, with a strong global brand portfolio, healthy balance sheet and strong cash generation, we are confident in our ability to navigate these challenging times while supporting the long term health of our business and brands. We are committed to protecting and growing our underlying free cash flow while making prudent capital allocation decisions that support our growth initiatives and allow us to return even more cash to shareholders. With that, we will take your questions. Operator?

Thank you. We will now begin the question and answer session. Our first question today comes from Peter Grom with UBS. Please go ahead, Peter.

Thanks, operator, and good morning, everyone. Wanted to touch just on the updated guidance. Can you maybe just unpack the moving pieces a bit more? Clearly, the top line is a bit pressured here, which we can see in the data. But can you maybe just unpack the profit headwinds and specifically aluminum and kind of the Midwest premium?

And I guess as we look out to the back half the year, how does the kind of updated guidance impact the second half performance? And I guess related, still early, but are there any implications that we should consider today as we look out to fiscal twenty six? Thanks.

Thanks, Peter. Appreciate the question. Look, from an updated guidance point of view, I would put it on three things that we did not anticipate the last time we spoke. One is the industry did not get better as we were expecting it to. We had expected it to navigate back to where it's been for the last few years of around 3%, and it didn't.

And certainly, confidence and the macro environment, whilst we continue to believe very strongly that it is cyclical, we're not seeing any signs of that changing in the balance of the year, and it certainly didn't in the second quarter. So that was probably the biggest driver. Obviously, we did not expect the dramatic increase in the Midwest premium of 180%. And we've talked a lot about that, and Tracy can get into more detail on the difficulty of hedging and forecasting that. So that obviously played a pretty significant negative role in our Q2 and balance of the year assumptions.

And frankly, our share performance did not meet our expectations. So the first two I would characterize are somewhat out of our control and the third one is within our control. And our share performance wasn't what we had expected. It stayed relatively the same as it did in Q1, and we had expected an improvement. And our estimate of share performance was a little better than what you might see in Surcana and so on because our on premise performance is better.

And so we estimate we lost about 50 bps of share in the second quarter, we've made the same assumption for the balance of the year. Now obviously, we're working very hard to change that, but from a guidance point of view, we've assumed a little change in our share performance. From a sort of second half and I don't think that sort of covers the second half. But from a longer term point of view, Peter, we still believe, as we said in our remarks, and I think the environment supports that, is that the current industry decline is cyclical. Consumer confidence will turn.

I don't know when, but it will turn. And the Midwest premium will revert back to the mean from these extreme moves that we've seen, both of which have had a pretty negative impact on our business this year. We've got a very strong balance sheet. We delivered really strong cash flow, as you heard from Tracy, and our updated guidance did not change that. We continue to be very pleased with how we've retained the majority of our market share on our core brands.

Coors Banquet is on fire. Our non alk strategy is coming together with the acquisition of Fever Tree. And all of that is incremental in the second half. And we'll still have incrementality obviously next year as well. It provides a nice halo effect to Zoha.

Peroni, our plants kicked in, in the second quarter and Brent is doing very, very well. Canada is holding its own from a market share point of view. And Molson Canadian is doing well, Molotovac's doing well, Coors Original's doing well as we head into next year. And when you look at EMEA and APAC, our premiumization strategy is doing very nicely led by Madri and frankly others. If you look towards the balance of the year, this year contract brewing headwinds become less and less as we head towards the end of the year.

And in the fourth quarter, I don't think we've got any real headwinds from a PAP's point of view to speak of. We obviously still have the fiscal headwind. And then next year, that all goes away, right? So we will have no headwinds from contract brewing. Tracy spoke about the shipments in the back half of the year.

And whilst we did get some of that into the second quarter, which we weren't anticipating given the performance of retail sales. We do get the rest of it primarily in the third quarter. And in Mariner and APAC, we're expecting to perform better from a top line point of view as we head into the back half of the year given the environment. So Tracy, did I forget anything?

Thank you. Next question comes from Chris Carey with Wells Fargo. Chris, please go ahead.

I wanted to follow-up on a couple of areas there. One is just a clarification. Tracy, the impact from Midwest Premium increases that you're expecting for the year, Have you seen any of those increases in Q2 or is that all in the back half of the year? Just say that in the context of The Americas inflation in the quarter was fairly poultry. So I just wanted to confirm that piece and how we think about the aluminum inflation perhaps more on a twelve to eighteen month time frame.

And then just following up on the overall category, I think there are certainly a number of reasons why we we may view what's going on cyclically. A lot of categories in consumer are dealing with sluggish trends. The question I would have though is volumes in the beer category have been soft going back to 2022. Obviously, the category leader dealt with a pretty substantial headwind. But nevertheless, I wanted to just test that confidence level around this being cyclical versus perhaps changing in consumption and habits and how you reconcile or get comfortable with that concept amidst kind of a category that's been a bit softer over the past few years? So thanks on those. Appreciate it.

Thanks, Chris. Trace, if you wouldn't mind taking the Midwest Premium one, I'll talk a little bit more about the category and our belief in it. Look, I think from a consumer confidence point of view and the impact that had on consumers in a number of different ways, Chris, took place towards the January and early February, right? And I mean it's clear that consumer confidence took a hit at that time and frankly hasn't recovered. So we continue to believe that over time that will change.

I it could be sooner rather than later or it could be in the same time period next year. The items that have been impacting the overall alcohol category like I've often heard GLP-1s talked about. Mean, we don't have a lot of data that suggests that that's having any meaningful impact on either the alcohol category or our category at this point. The other item that gets talked about is D9. And I think the impact of D9 does vary by market.

And in some markets, it's not sold. And others, it carries strong restrictions. And so that's certainly an area that we continue to monitor the impact of that. I think consumer confidence has had a disproportionate impact, as I said, across some consumers differently to others. And again, we believe that that is cyclical.

Tracey, do you want to add anything on Midwest premium?

Yes. Hi, Chris. Look, no one expected the MidWest premium to increase 180% from the beginning of the year. So for us, even though we are somewhat hedged, because it is such a difficult it's not transparent, it's expensive to hedge, it is a commodity that we the least amount hedged. But as equates to the balance of the year, mean, we're expecting an incremental 20,000,000 to $35,000,000 of Midwest impact for the balance of the year.

So, you know, that's around 60 to 75¢ a a pound. Our full year impact is between 40 and $55,000,000. And again, that's just the Midwest premium. From a rate of a commodity point of view, our hedging program is very extensive, and and we expect very little impact from tariffs. But but these indirect impacts, you know, specifically the Midwest premium is is just a problem because it is so difficult to hedge and it just doesn't follow normal market dynamics.

And then just to tie a bow on the industry, Chris, I mean, our acceleration plan strategy is designed to address some of the areas where we believe that there is an opportunity, right? So our beyond beer strategy from both a non alk beer point of view and also from a non alk point of view is obviously a fairly close tie in between Fever Tree from a mixer point of view and alcohol. And so that's an area that we're leaning into and feeling really good about the initial progress that we've made on Fever Tree. So our innovation strategy and our brand portfolio strategy is designed to address consumers' changed consumption habits and differing occasions.

Thank you. Our next question comes from Andrea Teixeira with JPMorgan. Please go ahead.

Thank you, operator, and good morning, everyone. Kevin, I appreciate your comments on the consumer confidence potentially improving. Now I'm curious to see if you're seeing any green shoots because all we hear from your peers and retailers is that obviously with inflation hitting harder in the second half with tariffs, we could see things getting worse before they can get better. So can you comment on the exit rate for consumption in North America and Europe? I know from your slides and I appreciate the details there, you're still running STWs against STRs at a higher level.

So I was hoping to see if you can help us with the cadence as we incorporate your new guide.

Actually, you want to talk about shipments perhaps, and I'll just talk about how we're seeing the consumer health by market. In The U. S, Andreic, candidly, we have not seen an improvement in overall consumer confidence or behavior. So we have not seen yet. And we are continuing to see value conscious consumers engaging in some channel and pack shifting, as we've seen previously.

Certainly, buying more singles and large packs and less of those mid packs. But that certainly has continued. I mean, we obviously serve a very broad set of consumer demographics across many income levels with our portfolio, and we think we've got a portfolio that meets everybody's needs. So no, we haven't seen much change. The environment is impacting all consumers in one way or another.

We do see the Hispanic consumer is disproportionately impacted by the overall macro environment. If you look north of the border in Canada, inflation has eased over time, but consumers out there also remain cautious about spending and ongoing concerns around housing and food costs. While interest rates have stabilized, I think there is a more global concern around trade tensions and tariff related impacts. So whilst Canada beer industry volumes have or trends have been somewhat similar to The U. S, they've performed slightly, slightly better.

In The UK, the consumer confidence index remains negative. We did see a little bit of an improvement in May. I think it's just a more broader optimistic view of the overall economy in The U. K. But overall sentiment, I think, I would say, remains cautious.

And then in Central And Eastern Europe, certainly that consumer is probably being impacted more than most given the significant political and socioeconomic issues that are impacting the Central And Eastern European markets. So that's sort of a run through of our markets and how we're seeing consumer confidence. Tracy, the shipments?

Yes. So in terms of the first half of the year, our shipment did outpace sales to retail by about 800,000 hectoliters in the first half. Last year, it was about 1,100,000 hectoliters. So there's about 300,000 hectoliters to reverse in the second half of the year. Most of that will be in Q3.

And as always, we plan to ship to consumption, so we expect that to converge, as I say, mainly in Q3.

Thank you. Our next question comes from Bonnie Herzog with Goldman Sachs. Please go ahead, Bonnie.

Thank you. Good morning, everyone. Just had a quick question pricing and then the promotional environment. I guess given the pressures on the category and consumers, how are you thinking about pricing for the remainder of the year? Also, about the promotional environment?

Are you seeing signs of levels increasing recently? And how do you expect that to play out? Thanks,

Bonnie, and good morning. Look, I mean, it's quite common to see heightened competition with strong promotional activity during the summer. And you see that easing up in the shoulder months, we've seen that in prior years, and we're seeing that again. Again, we just take a strategic approach to how we evaluate the competitive environment. From an overall pricing point of view, the historical average, as we've said before, ranges in that 1% to 2% range.

And we expect that to fall within that range again this year. Whilst we have seen the impact of the economy, consumer confidence, having consumers searching for value. Any trading seems to be coming in channel and pack shifting, not necessarily in segment trade down. Thanks, Bonnie.

Thank you. Our next question comes from Filippo Foloni with Citi. Please go ahead.

Hi, good afternoon, everyone. I wanted to follow-up on the margin question on the Midwest premium for the second half. If I take the, call it, $20,000,000.35000000 incremental Midwest premium cost, it's still a relatively small headwind to margin. So maybe, Tracy, can you talk about like the other drivers of the big margin contraction that is embedded in your guidance in terms of volume deleverage, SG and A for the back half of the year? And then just a follow-up on top line.

Gavin, you mentioned the on premise is performing better than what we see in tracked channel data. So can you give us a perspective of how July played out relative to your expectation, including the on premise business? We see still soft trends, especially around fourth of July in frac channels, but I'm curious the total company and total industry trends, including on premise. Thank you.

Thanks, Filipe. Trying to if you'll handle the margin one. I'll quickly deal with July and the on premise. Look, from a July point of view, as we say every time on these calls, we've only got a few weeks of the following quarter in the books. So let's see what happens for the balance of the quarter from an overall industry and our performance point of view.

From an on premise point of view, I know we've talked a lot about Blue Moon over the last couple of years, we are starting to see improvement in the on premise. Belgian White's STR trends improved six points in Q2 versus Q1, which is very encouraging given that brands are built and expand from the on premise out. So we're pleased with that. Peroni is obviously playing a role in that as we implement the plans we've talked about for a while now, which kicked off in Q2. So that's been a positive catalyst for us as well.

And then Coors Banquet just remains on fire as it gains distribution both in the on premise and the off premise. I would say that those are the three brands that are having the most positive impact for us in the on premise. Tracy, do you want get into margin a little bit more?

So then, Felipe, look, from a margin point of view, we don't specifically give gross margin guidance. But just to note, our underlying gross margin percentage has improved in each of the last two years. But a couple of things as we look at 2025. So we've spoken about the top line. In terms of the COGS, we do have the deleverage headwind driven by the contract brewing, which we've discussed.

And we also have higher premiumization, which drives higher COGS across our business units. We have spoken about the Midway premium. And although we do have productivity improvements and cost savings, these are more than offset by the deleverage and premiumization as well as the Midwest premium.

Thank you. Our next question comes from Rob Ottenstein with Evercore ISI. Rob, please go ahead.

Great. Thank you very much. So Gavin, a pretty pessimistic view on second half volumes for the industry, and I'm assuming that July was pretty bad. And this is in the face of, I think, easier comps, given how bad the weather was last year. So I guess what I'd love you to help us think through, assuming that does play out the way you're guiding to, what are the impacts on the industry and how can the industry address that?

So are you starting to see pressure, for instance, on shelf space, not for you specifically, but for the beer industry as a whole, as retailers start to look at the fall shelf set changes and into next year and how you may be combating that? Any impact on not just yours, but industry brewery footprint, the potential for some sort of consolidation of volumes and maybe doing a reverse, doing more contract brewing instead of letting contracts go, actually maybe bring more in to keep brewery utilization going given the high fixed costs of breweries and dependence on volume. So just love to get your thoughts on industry action, your reaction to these unprecedented volume declines. Thank you.

Thanks, Rob. Yes, a lot of questions in there, so let me try and tackle them off. So from a comps point of view, no, July had easier comps, but the rest of the year did not, if you remember correctly. So yes, there was poor weather and the industry was pretty tough in July, so the comps are a little softer in July. Going forward, they're not.

They're actually the industry improved quite nicely heading into the balance of the year from about August onwards. So the comps don't get easier from an industry point of view. They get tougher. And obviously, we built that into our thinking as we put the guide out there. From a shelf space point of view, look, from our point of view, we obviously had a significant uptick in 2024 in both the spring and in the 2023.

We held on to those gains. And so we finished 2024 significantly higher than we did in 2023. And again, in the spring of this year, we held on to those shelf gains. Banquet, again, was a particularly strong beneficiary of that. We gained strong double digits.

And we're not expecting to see significant activity for the 2025 based on what we're seeing and what we're hearing. And frankly, we would know if it was different by this time. Where retailers have made shelf changes to accommodate other brands, they've made in the flavor space and the craft space primarily, I would say. They haven't baked it in the traditional beer space. From a brewery footprint point of view, obviously our capacity utilization varies by season.

So in the summer, we're fully utilized and in the shoulder periods, not necessarily. I would tell you that removing PEPs from our system is very, very helpful. It has allowed us to remove a lot of complexity. It's allowed us to free up capacity in the summer. It certainly helped our decision to onshore Pironi, which we have now completed and it's completely onshore.

And obviously, we see a big opportunity for Pironi and we're starting see that benefit coming through in the second quarter, I've often said, and look forward to seeing in the future that Pironi can. There's no reason why it can't be as big as its other European competitors. And we certainly gained meaningful share versus our European competitors in the second quarter now that our plans have kicked in. It has it allowed us to tidy up our footprint by closing a couple of smaller breweries. So we were able to tidy that up.

And it certainly allowed us to bring Yingling and our Yingling relationship into our business and produce in a couple of breweries. And it will allow us to expand further with Yingling when the time is right. As it relates to the brewery footprint, we're pleased with our brewery footprint. And yes, I think that covers all of Rob's points, Tracy. Thanks, Rob.

Thank you. Our next question comes from Eric Serrata with Morgan Stanley. Please go ahead, Eric.

Great. Good afternoon good morning, everyone. Wanted to first ask you, Gavin, in terms of the recent market share trends. Clearly, the off premise trends at least have weakened vis a vis your largest competitor. I know you called out better on prem trends, but are there any changes to your marketing or go to market strategies that you're implementing or contemplating in light of what seems like a resurgent competitor, at least for two of their main brands?

And then for Tracy, a couple of housekeeping items. Could you help quantify how much the incentive comp reversal was? Was that all in the second quarter? And then in terms of the free cash flow, much of you know, sort of how much of the bridge between the the the earnings reduction and the their free cash flow reiteration is the the cash tax and working capital. And all else equal, would the working capital benefits reverse next year?

Or are these sustainable? I know there's a lot there, but thank you.

Thanks, Eric. Yes, a lot there. Let me see if I can answer that. Look, I think from an overall share point of view, I think I'd start by saying that our total Molson Coors share trends in The U. S, now I'm talking specifically in The U.

Molson Coors Beverage (TAP) Q2 2025 Earnings Call Transcript

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