The $3.4 billion merger of Molson Coors has led to the company’s net loss of $46.5 million in the first quarter.
In the first quarter of last year, Coors posted a profit of $4.8 million. So what happened?
Molson Coors president and CEO, Leo Kiely said, “The common underlying cause for difficult first quarter results was the lack of volume growth in each of our major markets. While disappointing, this performance reinforces the importance of integrating the operations and organization of the combined company, so we can capitalize on our new strengths and build an even more competitive and profitable global enterprise.”
According to an Associated Press article,
The company said its U.S. business faced continued softness in the beer industry, aggravated by increased interest in spirits brands, especially in on-premise channels. The U.S. business also faced significant cost pressures, primarily continued industry-wide increases in freight and packaging-material rates, as well as the de-leveraging of fixed costs due to the lower sales volume.
Molson Coors said these cost pressures were partially offset by continued progress on cost saving and productivity initiatives in U.S. operations.
“A slight decline in our U.S. sales to retail reflects weak industry volume conditions,” said Kiely. “Nevertheless, we are heading into our peak season in the U.S. with a focus on regaining volume growth on Coors Light with continued success in key channels, such as our gains in chain accounts and improvements in Hispanic markets, new advertising copy — which has been well received among our U.S. distributors — as well as product and packaging innovations directed at adding focused excitement for the key summer selling season.”
Maybe I’ll pick up a case of Coors Light tonight and help them out a little.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
