Molson Coors tumbles after cutting jobs and missing quarterly forecasts

  • Molson Coors stock sank as much as 5% in Wednesday trading after the beverage company missed analyst estimates for third-quarter earnings and revenue.
  • The company announced a revitalization plan alongside the report, projecting $US150 million in unlocked savings by 2022.
  • The plan calls for Molson Coors’ headquarters to be relocated to Chicago, and for the company to cut 400 to 500 workers.
  • Watch Molson Coors trade live here.

Molson Coors stock sank as much as 5% on Wednesday after the beverage company missed analysts estimates for third-quarter earnings and revenue.

The company also announced a revitalization plan alongside the earnings report, estimating it will unlock $US150 million in savings by 2022.

Miller Coors will cut 400 to 500 employees in the restructuring, with most eliminations landing in its US, Canada, and International reporting roles. The company is at an “inflection point” and requires “significant” change to continue growing, CEO Gavin Hattersley said in the report.

“We can continue down the path we’ve been on for several years now, or we can make the significant and difficult changes necessary to get back on the right track,” Hattersley said.

Here are the key numbers:

Revenue: $US2.84 billion, versus the $US2.87 billion estimate

Adjusted earnings per share: $US1.48, versus the $US1.50 estimate

Q3 worldwide beer volume: 24.7 hectoliters, down 2.4% from the year-ago period

Miller Coors will consolidate its Global, MillerCoors, Canadian, and MCI teams and move its North American headquarters to Chicago, according to the report. The firm expects restructuring charges to land between $US120 million and $US180 million over the next two years.

The new company strategy also brings a slight name change, with Molson Coors Beverage Company replacing its current name, Molson Coors Brewing Company.

Legacy beer companies have faced increased competition from spiked seltzers and other alternative alcoholic beverages over the past year. One analyst at UBS projects the $US550 million hard seltzers segment will be worth $US2.5 billion by 2021.

“The numbers I think are surprising to everyone in the market,” analyst Sean King said in a past interview with Markets Insider.

Molson Coors traded at $US53.34 per share as of 12:50 p.m. ET, down roughly 5% year-to-date.

The beverage company has nine “buy” ratings, seven “hold” ratings, and five “sell” ratings, with a consensus price target of $US59.47, according to Bloomberg data.

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