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Molson Coors (TAP) to Report Q2 Earnings: What's in the Cards?

·4 min read
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Molson Coors Beverage Company TAP is expected to register top-line growth when it reports second-quarter 2021 numbers on Jul 29, before the opening bell. The Zacks Consensus Estimate for the company’s second-quarter revenues is pegged at $2.88 billion, suggesting 15.1% growth from the prior-year reported figure.

For second-quarter earnings, the consensus mark is pegged at $1.38 per share, suggesting a 10.9% decline from $1.55 reported in the year-ago quarter. The consensus mark has moved south by a penny in the past seven days.

In the last reported quarter, the leading alcohol company delivered an earnings surprise of 108.3%. It has recorded an earnings surprise of 63.8%, on average, in the trailing four quarters.

Molson Coors Beverage Company Price and EPS Surprise
Molson Coors Beverage Company Price and EPS Surprise

Molson Coors Beverage Company Price and EPS Surprise
Molson Coors Beverage Company price-eps-surprise | Molson Coors Beverage Company Quote

Key Factors to Note

Molson Coors is expected to have witnessed continued growth on the back of the revitalization plan, core brand strength, robust gain in the above-premium portfolio, the expansion of beyond beer and increased investment in omni-channel capabilities in the second quarter. It has been benefiting from favorable net pricing and cost savings. Growth of the above premium portfolio is also likely to have been a key driver.

The company’s innovation and premiumization efforts as well as the hard seltzer ambition have been aiding its bottom-line performance. This is expected to have led to continued market share growth in the second quarter.

Molson Coors expects to improve brand volume trends for Coors Light and Miller Lite in North America beyond the fiscal first-quarter levels, leading to a strong performance through the rest of 2021. It entered the fast-growing RTD cocktails space with an exclusive equity and distribution agreement with Superbird and above premium tequila-based Paloma. The company expects to deliver significant growth through the entire lineup of hemp-derived CBD beverages and the fast-growing RTD cocktails. These investments are expected to have contributed meaningfully to the company’s second-quarter performance.

However, on the last reported quarter’s earnings call, the company predicted significant year-over-year growth in marketing spends through the rest of the year, and more precisely in the second quarter. It anticipates quarterly marketing spends to be higher than second-quarter 2020 and almost reach the spending witnessed in the second quarter of 2019. Increased marketing spend is expected to be mainly related to the strengthening of its core brands and supporting the brands launched in 2020, including Blue Moon LightSky, Vizzy and Coors Seltzer. Molson Coors also expects incremental marketing expenses for innovations like Topo Chico Hard Seltzer and ZOA.

The company continues to anticipate inflationary COGS headwinds as well as increased investments for its revitalization plan through the rest of 2021, which are expected to offset EBITDA growth. Impacts from the investments are likely to get reflected in the company’s second-quarter performance.

Zacks Model

Our proven model does not conclusively 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 #2 and an Earnings ESP of -1.68%.

Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Darling Ingredients Inc. DAR has an Earnings ESP of +10.09% and it presently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Medifast Inc. MED currently has an Earnings ESP of +7.27% and a Zacks Rank #2.

Tyson Foods, Inc. TSN has an Earnings ESP of +9.03% and a Zacks Rank #2 at present.

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Molson Coors Beverage Company (TAP) : Free Stock Analysis Report

Tyson Foods, Inc. (TSN) : Free Stock Analysis Report

Darling Ingredients Inc. (DAR) : Free Stock Analysis Report

MEDIFAST INC (MED) : Free Stock Analysis Report

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