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Soft On-Premise Sales to Mar Molson Coors' (TAP) Q2 Earnings
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Molson Coors Beverage Company (TAP - Free Report) is slated to release second-quarter 2020 results on Jul 30. In the last reported quarter, the leading alcohol company delivered an earnings surprise of 16.7%. Moreover, it delivered an earnings surprise of 11.1%, on average, over the trailing four quarters.
The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at 67 cents, suggesting a 55.9% decline from the year-ago reported figure. The consensus mark has moved downward in the past seven days. For second-quarter revenues, the consensus mark is pegged at $2.44 billion, suggesting a 17.3% decline from the prior-year reported figure.
Key Factors to Note
Amid the coronavirus pandemic, Molson Coors like most beverage companies is expected to have witnessed a slowdown in on-premise channels, which is a major contributor to sales. The company’s earnings and sales have been impacted by unfavorable mix as well as keg sales returns and reimbursements associated with the on-premise impacts of the pandemic across major markets. In the last reported quarter, the impacts of the aforementioned factors on on-premise sales were $31.5 million along with costs of $50 million hurting earnings.
Molson Coors Beverage Company Price, Consensus and EPS Surprise
Further, greater exposure to the on-premise channel is expected to have impacted the company’s financial volume and worldwide brand volume. On its last earnings call, management noted that on-premise sales have been reduced to zero in many regions. It also stated that the pandemic continued to hurt the on-premise channel in April 2020 due to extended closures.
Moreover, the company believes that strong off-premise (retail stores) sales performance continues to cushion sales. However, this is not enough to fully offset the loss of the on-premise (bars, restaurants, etc.) volume. Further, it noted that the benefits of pantry loading, which aided North America performance in March, did not continue in April. This is likely to weigh on its second-quarter performance.
Consequently, the company anticipated the pandemic to have significant impacts on its revenues and profit in the second quarter. The impacts are expected to primarily relate to the closure of on-premise sales channels in almost all markets as well as other impacts of the pandemic on the global economy.
Nonetheless, the company remains committed to growing its market share through innovation and premiumization. It remains optimistic about the recently launched brands, including Vizzy Hard Seltzer, Blue Moon LightSky, Saint Archer Gold and Movo canned wine spritzers. The success of these brands is likely to have contributed to sales in the second quarter. Additionally, the company has been undertaking restructuring initiatives to reduce overhead costs and boost profitability.
Zacks Model
Our proven model does not predict an earnings beat for Molson Coors this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Molson Coors has a Zacks Rank #4 (Sell) and an Earnings ESP of +4.98%.
Stocks With Favorable Combination
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases:
The Clorox Company (CLX - Free Report) presently has an Earnings ESP of +0.59% and a Zacks Rank #2.
Colgate-Palmolive Company (CL - Free Report) has an Earnings ESP of +0.81% and a Zacks Rank #3 at present.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Soft On-Premise Sales to Mar Molson Coors' (TAP) Q2 Earnings
Molson Coors Beverage Company (TAP - Free Report) is slated to release second-quarter 2020 results on Jul 30. In the last reported quarter, the leading alcohol company delivered an earnings surprise of 16.7%. Moreover, it delivered an earnings surprise of 11.1%, on average, over the trailing four quarters.
The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at 67 cents, suggesting a 55.9% decline from the year-ago reported figure. The consensus mark has moved downward in the past seven days. For second-quarter revenues, the consensus mark is pegged at $2.44 billion, suggesting a 17.3% decline from the prior-year reported figure.
Key Factors to Note
Amid the coronavirus pandemic, Molson Coors like most beverage companies is expected to have witnessed a slowdown in on-premise channels, which is a major contributor to sales. The company’s earnings and sales have been impacted by unfavorable mix as well as keg sales returns and reimbursements associated with the on-premise impacts of the pandemic across major markets. In the last reported quarter, the impacts of the aforementioned factors on on-premise sales were $31.5 million along with costs of $50 million hurting earnings.
Molson Coors Beverage Company Price, Consensus and EPS Surprise
Molson Coors Beverage Company price-consensus-eps-surprise-chart | Molson Coors Beverage Company Quote
Further, greater exposure to the on-premise channel is expected to have impacted the company’s financial volume and worldwide brand volume. On its last earnings call, management noted that on-premise sales have been reduced to zero in many regions. It also stated that the pandemic continued to hurt the on-premise channel in April 2020 due to extended closures.
Moreover, the company believes that strong off-premise (retail stores) sales performance continues to cushion sales. However, this is not enough to fully offset the loss of the on-premise (bars, restaurants, etc.) volume. Further, it noted that the benefits of pantry loading, which aided North America performance in March, did not continue in April. This is likely to weigh on its second-quarter performance.
Consequently, the company anticipated the pandemic to have significant impacts on its revenues and profit in the second quarter. The impacts are expected to primarily relate to the closure of on-premise sales channels in almost all markets as well as other impacts of the pandemic on the global economy.
Nonetheless, the company remains committed to growing its market share through innovation and premiumization. It remains optimistic about the recently launched brands, including Vizzy Hard Seltzer, Blue Moon LightSky, Saint Archer Gold and Movo canned wine spritzers. The success of these brands is likely to have contributed to sales in the second quarter. Additionally, the company has been undertaking restructuring initiatives to reduce overhead costs and boost profitability.
Zacks Model
Our proven model does not predict an earnings beat for Molson Coors this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Molson Coors has a Zacks Rank #4 (Sell) and an Earnings ESP of +4.98%.
Stocks With Favorable Combination
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases:
Monster Beverage Corporation (MNST - Free Report) currently has an Earnings ESP of +2.35% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Clorox Company (CLX - Free Report) presently has an Earnings ESP of +0.59% and a Zacks Rank #2.
Colgate-Palmolive Company (CL - Free Report) has an Earnings ESP of +0.81% and a Zacks Rank #3 at present.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>