A month has gone by since the last earnings report for Molson Coors Brewing (TAP Quick QuoteTAP - Free Report) . Shares have lost about 6.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Molson Coors due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Molson Coors Q2 Earnings Beat Estimates, Sales Lag

Molson Coors has posted second-quarter 2023 results, wherein the bottom line surpassed the Zacks Consensus Estimate, but the top line lagged. However, both metrics improved year over year. Results have gained from the strong performance across its portfolio and both business units.

Quarterly Details

The company’s adjusted earnings of $1.78 per share jumped 50% year over year and surpassed the Zacks Consensus Estimate of $1.63.

Net sales grew 12% to $3,267 million but missed the Zacks Consensus Estimate of $3,309 million. On a constant-currency basis, net sales rose 12.1%, driven by a favorable price and sales mix, and higher financial volume.

Net sales per hectoliter increased 8.7% on a reported basis and 9% on a constant-currency basis, driven by strong net pricing, and a favorable sales mix stemming from the premiumization and geographic mix.

Molson Coors’ worldwide brand volumes rose 5% to 22.8 million, driven by strength in America, partially offset by the sluggishness in EMEA&APAC. Financial volumes advanced 2.8% to 23.4 million hectoliters due to higher volumes in the Americas, partly offset by increased EMEA&APAC volumes.

Underlying (non-GAAP) earnings before income taxes (EBT) advanced 53% year over year to $502.2 million. On a constant-currency basis, EBT jumped 53% due to higher net pricing, rising financial volumes, increased pricing and a positive sales mix, somewhat offset by cost inflation related to materials and manufacturing expenses, as well as higher MG&A expenses.

Segmental Information

Americas: Net sales in the segment increased 10.7% to $2,621.7 million on a reported basis and rose 11.5% on a constant-currency basis, driven by a positive price and sales mix, as well as higher financial volume, partly offset by unfavorable currency. The metric came ahead of our estimate of $2,439.1 million. Financial volumes rose 5% year over year, driven by an increase in U.S. domestic shipments stemming from volume growth in its premium brands, as well as higher shipments in
Canada.

Brand volume for the segment increased 8% year over year on an 8.7% rise in the United States, owing to double-digit growth across Coors Light, Miller Lite and Coors Banquet. Canada brand volumes rose 11.3%, driven by cycling the prior-year impacts of the Québec labor strike. Meanwhile, Latin America declined 5.9% due to industry softness in some major markets.

Net sales per hectoliter rose 5.4% year over year due to a favorable sales and price mix, and higher net pricing. Underlying EBT improved 40% on a constant-currency basis to $487.6 million. The increase can be attributed to higher pricing, rising financial volumes, lower logistics expenses and a favorable sales mix, offset by cost inflation on materials, conversion, and higher MG&A expenses.

EMEA&APAC: The segment’s net sales (on a reported basis) grew 16.3% to $649 million and improved 14.7% on a constant-currency basis, driven by a favorable price and sales mix, as well as favorable currency, partly offset by a decline in financial volume. The metric came ahead of our estimate of $560.8 million. Net sales per hectoliter for the segment advanced 19.9%, resulting from a favorable sales mix, as well as higher pricing, offset by currency headwinds.

The segment’s financial volumes fell 3%, while the brand volume decreased 2.9% due to declines in Central and Eastern Europe, stemming from inflationary pressures, partially offset by resilient demand and growth in above premium volumes in the U.K.

The segment’s underlying EBT increased 85% to a loss of $64.2 million on a reported basis and improved 83% on a constant-currency basis, driven by higher net pricing to customers, favorable sales mix, offset by lower financial volumes and cost inflation, particularly in materials, logistics and manufacturing expenses.

Other Financial Updates

Molson Coors ended the second quarter with cash and cash equivalents of $960.9 million. As of Jun 30, 2023, the company had a total debt of $6,615.1 million, resulting in a net debt of $5,654.2 million.

In the six months ending Jun 30, 2023, the company declared and paid out cash dividends of 41 cents per share, with the CAD equivalent totaling $1.10 per share. Also, TAP repurchased 475,000 shares for $26.7 million during the above-mentioned period.

Outlook

Management has raised the 2023 view. Net sales are projected to grow year over year in the high-single digits on a constant-currency basis, up from the prior mentioned low-single digit growth. Underlying EBT is likely to grow 23-26% year over year compared with the earlier stated low-single-digit growth on a constant-currency basis.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

At this time, Molson Coors has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Molson Coors has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Molson Coors belongs to the Zacks Beverages - Alcohol industry. Another stock from the same industry, Boston Beer (SAM Quick QuoteSAM - Free Report) , has gained 1.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.

Boston Beer reported revenues of $603.3 million in the last reported quarter, representing a year-over-year change of -2.1%. EPS of $4.72 for the same period compares with $4.31 a year ago.

Boston Beer is expected to post earnings of $4.24 per share for the current quarter, representing a year-over-year change of +11%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.7%.

Boston Beer has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.