Molson Coors Beverage Company TAP has posted fourth-quarter 2024 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. While sales declined year over year, earnings increased. 

Effective Feb. 1, 2025, the company has obtained exclusive rights through a license agreement to make, market and sell Fever-Tree products in the United States. Per the agreement, TAP acquired the shares of the Fever-Tree USA, Inc. with the immaterial buyout to be accounted for as a business combination and consideration to be allocated mainly to working capital balances. It made an investment of nearly $90 million in Fever-Tree Drinks Plc, a listed entity on the London Stock Exchange.

The company’s adjusted earnings of $1.30 per share increased 9.2% year over year and surpassed the Zacks Consensus Estimate of $1.13.

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Net sales dipped 2% year over year on a reported basis and 1.9% on a constant-currency basis to $2.74 billion but beat the Zacks Consensus Estimate of $2.71 billion. The decline was due to lower financial volumes and adverse currency, partly offset by an improved price and sales mix.

Shares of Molson Coors gained nearly 5% in the pre-market trading session today backed by better-than-expected sales and earnings per share (EPS) in fourth-quarter 2024 and an encouraging view for 2025. The Zacks Rank #3 (Hold) company has gained 6.9% in the past three months against the industry’s 1.7% decline.

Molson Coors’ Q4 Details

Financial volumes dropped 6.4% year over year, mainly led by lower shipments, with reduced contract brewing volumes in the Americas. Brand volumes fell 3.4% on a 2.2% decline in the Americas and a 6.6% drop in EMEA&APAC.

Net sales were positively influenced by the price and sales mix, which increased 4.5% year over year due to higher net pricing and a favorable sales mix in both segments despite lower contract brewing volumes in the United States.

Gross profit inched up 1% year over year to $1.04 billion and the gross margin increased 110 basis points (bps) to 38% in the quarter.

Marketing, general and administrative (MG&A) expenses dropped 4.9% year over year to $684.7 million on a reported basis due to lower incentive compensation costs, positive currency impacts and reduced marketing stemming from increased investments in the year-ago period. Underlying MG&A fell 4.4% in constant currency.

Underlying earnings before taxes (EBT) slipped 1.4% year over year to $341 million. On a constant-currency basis, underlying EBT fell 0.9% due to reduced financial volumes and cost inflation of materials and manufacturing expenses. Higher pricing, lower MG&A expenses and a positive sales mix partly offset these headwinds.

TAP’s Segmental Information

Americas: Net sales in the segment dropped 2.6% year over year to $2.17 billion on a reported basis and 2.2% on a constant-currency basis. The decline was due to lower financial volumes and unfavorable currency impacts, offset by a positive price and sales mix. Sales in the segment beat the Zacks Consensus Estimate of $2.11 billion.

Financial volumes were down 5.9% year over year, resulting from lower contract brewing volumes in the United States due to the wind-down of a contract brewing arrangement that was terminated by 2024. This contributed to more than 50% of the reduction and lower U.S. brand volumes. Price and sales mix aided sales by 3.7%, resulting from lower contract brewing volumes and higher pricing. Brand volumes in the Americas slipped 2.2%, with a 3% drop in the United States, resulting from soft above-premium volumes and the cycling of double-digit growth across the company’s core power brands in the year-ago period. This was somewhat offset by an additional trading day in the reported quarter. Canada brand volumes jumped 2.6% on the above-premium portfolio.

Underlying EBT edged up 0.5% on a constant-currency basis, backed by sales mix, higher net pricing, lower MG&A costs and cost-savings gains, somewhat offset by soft financial volumes and cost inflation associated with materials and manufacturing expenses. The metric slipped 0.3% to $362 million on a reported basis.

EMEA&APAC: The segment’s net sales (on a reported basis) rose 0.4% year over year to $568.7 million but dipped 0.5% on a constant-currency basis. Sales benefited from a favorable price and sales mix and positive currency effects, partly offset by a decline in financial volumes. The price and sales mix improved 7.3% on higher net pricing, channel mix and a favorable sales mix fueled by premiumization. The Zacks Consensus Estimate was pegged higher at $592 million.

Financial volumes dipped 7.8% year over year and brand volumes fell 6.9% due to reduced volumes in Western Europe on weak market demand and heightened promotional activity from competitors. Also, lower volumes in Central and Eastern Europe due to dull industry demand hurt the metric. The segment’s underlying EBT increased 54.9% year over year on a constant-currency basis, benefiting from higher net pricing, lower MG&A costs and a favorable sales mix, partially offset by soft financial volumes. The metric surged 58.2% to $24.2 million on a reported basis.

Financial Updates for TAP

Molson Coors ended the fourth quarter with cash and cash equivalents of $969.3 million. As of Dec. 31, 2024, the company had a total debt of $6.15 billion, resulting in a net debt of $5.18 billion.

Net cash provided by operating activities amounted to $1.91 billion in 2024. Moreover, the company generated an adjusted underlying free cash flow of $1.24 billion as of Dec. 31, 2024.

On Jan. 29, 2025, the company paid $60.6 million to Stone Brewing Company in connection with a final resolution of the Keystone litigation case. This had been fully accrued as of Dec. 31, 2024.

During 2024, TAP repurchased shares worth $643.4 million and paid out dividends of $369.2 million. On Feb. 12, 2025, the company's board declared a quarterly dividend of 47 cents a share, payable March 14, 2025, to shareholders of Class A and Class B common stock of record as of Feb. 27, 2025.

What to Expect From TAP in 2025?

The global macro landscape is evolving fast, leading to uncertainty. Geopolitical events and global trade policy impact consumer trends. The company’s guidance does not reflect the effects of the aforesaid activities or any imposition of import tariffs by the United States and potential retaliatory efforts by other countries. Molson Coors projects 2025 sales to increase in low-single-digit year over year on a constant-currency basis.

Molson Coors expects 2025 underlying EPS to grow in high single-digit from 2024. It now expects underlying EBT to grow mid-single-digit year over year at constant currency. Underlying depreciation and amortization are projected to be $675 million, plus or minus 5%. The company expects an underlying effective tax rate of 22-24% for 2025. Consolidated net interest expenses are anticipated to be $215 million, plus or minus 5%.

The company estimates a capital expenditure of $750 million (plus or minus 5%) for 2025. The underlying free cash flow is expected to be $1.3 billion, plus or minus 10%.

Stocks to Consider in Consumer Staples Space

Freshpet, Inc. FRPT, a pet food company, has a trailing four-quarter average earnings surprise of 144.5%. FRPT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Freshpet’s current financial-year sales and EPS indicates growth of 24.5% and 66.8%, respectively, from the prior-year levels.

United Natural Foods UNFI, a key distributor of natural, organic and specialty food and non-food products, currently sports a Zacks Rank of 1. The consensus estimate for United Natural Foods’ current financial-year sales and EPS indicates growth of 0.3% and 442.9%, respectively, from the prior-year levels.

UNFI has a trailing four-quarter average earnings surprise of 553.1%.

McCormick & Company MKC, manufacturer and distributor of spices, seasonings, specialty foods and flavors, currently carries a Zacks Rank #2 (Buy). MKC has a trailing four-quarter average earnings surprise of 13.8%.

The Zacks Consensus Estimate for MKC’s current financial-year sales and EPS indicates growth of 2.3% and 6.4%, respectively, from the year-ago figures. 

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