Live News: Turkey inflation rises to 79.6% in July

Live News: Turkey inflation rises to 79.6% in July

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Molson Coors’ chief executive said cost inflation is now his main concern after the US brewer saw a further jump in prices for inputs such as barley, aluminum and freight.

That upward trend took some of the shine off consumer demand, which otherwise looked resilient despite broader concerns about rising interest rates, inflation and a possible economic downturn.

“The consumer has been exposed to many, many recessions. . . to be resilient in terms of beer purchases, so I would pick input costs as the biggest concern” over inflation, chief executive Gavin Hattersley told the Financial Times.

Behind Hattersley’s concern was the $434 million year-on-year jump in cost of goods sold to $2.1 billion in the second quarter. Revenue was barely different at $2.92 billion, the maker of Miller Lite and Blue Moon beer reported Tuesday.

About half of the jump in costs was due to inflation and mainly to increases in the price of freight, natural gas and inputs such as barley and aluminum, Hattersley said. The rest was due to the investment in the “premiumization” of the company’s brands.

Hattersley said the brewer had “cushions” in the form of hedges for some of its costs and was intentionally keeping high inventories of both unfinished goods and inputs, including a year’s supply of barley, in case supply chains would deteriorate.

Molson Coors has experienced growth in its premium and budget segments. Should consumers turn away from more expensive drinks, Hattersley said the company was “prepared to steer” its diverse drinks portfolio towards more value-oriented options.

Because of the jump in costs, Molson Coors’ net income fell 88% from a year ago to $47.3 million. After taking into account certain market value fluctuations and other costs, adjusted earnings of $260.1 million slightly beat Wall Street forecasts.

Shares closed down 10.5 percent in regular trading on Tuesday.



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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!