Molson Coors forecast a bigger drop in its annual profit on Tuesday, hit by tariff impacts on costs of aluminum it uses for its beverage cans amid macroeconomic uncertainty in the U.S.
U.S. President Donald Trump’s fluctuating trade tariff policies have pressured consumer spending in the U.S. and caused customers to pare back on discretionary spending such as alcohol.
The annual forecast change comes as a result of “the anticipated ongoing macroeconomic impacts on the industry, our lower-than-expected U.S. share performance, and higher-than-expected indirect tariff impacts on the pricing of aluminum,” CEO Gavin Hattersley said in a statement.
The company, which produces its beer locally at breweries in Colorado faces a 50 per cent tariff on aluminum metal shipped into the U.S. since June, when Trump doubled it from 25 per cent.
Shares of the company were down about one per cent in premarket trading.
The company expects annual adjusted earnings per share to fall seven per cent to 10 per cent, compared to its prior forecast of a low single-digit rise.
It expects net sales for the year to decline three to four per cent, compared with previous expectations of a decline in the low single-digits.
The Blue Moon witbier maker in January had bought an 8.5 per cent stake in an US$88-million deal that gives it exclusive rights to market British company Fevertree Drinks’ cocktail mixers and tonic water in the U.S., in a bid to capture the domestic demand for non-alcoholic drinks.
Both companies had agreed to equally split the costs of the 10 per cent tariff to be imposed on U.K. imports to the U.S. in June.
The company’s net sales fell 1.6 per cent to $3.2 billion in the second quarter ended June 30, but came ahead of analysts’ estimate of $3.1 billion, according to data compiled by LSEG.
It posted underlying earnings per share of $2.05, beating estimates of $1.83 cents per share.
The company said the quarter benefited from pricing growth and favorable timing of U.S. shipments despite soft macroeconomic conditions.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Pooja Desai and Shailesh Kuber)
