Molson Coors has reported a sharp drop in third-quarter profit, as rising unemployment and higher costs put off consumers.
For the three months ending 24 September, net profit fell by 23% to $197.4m ($1.06 a share), although revenue was up 9% to $954.4m. The group admitted that sales were boosted by favourable currency exchange rates, higher prices in some regions and an expansion into emerging markets. Overall volumes, however, declined by 0.8% due to lower demand in the US and in the UK.
In the UK, Molson Coors reported weaker-than-expected results due to lower sales in bars and a 3% decline in sales to retailers. In the US, it was hurt by higher costs for its Miller Coors joint venture, although its Canadian operations were helped by favourable exchange rates.
CEO Peter Swinburn noted: “We have had the equivalent of an earthquake. Our core consumer was hit overnight... It is very difficult to recover from that, it takes time to rebuild.” He added that the company will try to boost volume by continuing to push into emerging markets, promote its smaller craft lines and develop new products. However, he also warned that Molson will have to wait for the economy to recover, noting: “We need to protect those brands so when (customers) return, they are relevant”.
NamNews - Friday 4th November 2011