Molson Coors Brewing Co., owner of the Coors Light, Keystone and Blue Moon brands, did fine in its recent third quarter. It's the next quarter the beer maker is nervous about.
Declining consumer demand and high costs in the U.S. and central Europe, along with unfavorable currency swings in Britain and Canada, mean that the fourth quarter will likely "be the most challenging of this year," Chief Executive Peter Swinburn said in a statement.
Already, the company's British, Canadian and international units are reporting sliding sales, though profit soared 16% to $139.9 million in the U.S. during the third quarter.
Net income was up slightly to $198.4 million, or $1.09 a share, from $197.4 million, or $1.06 a share a year earlier, a gain of about 1%. Revenue jumped 25.3% to $1.2 billion.
Molson Coors, based in Denver and Montreal, said it sold more than 450 million gallons of beer in the quarter, up almost 31% from a year ago.
Sales to retailers of both Coors Light and Miller Lite grew in the single digits. But sales of the company's craft and import offerings boomed in a double-digit gain.
"Most of our portfolios are skewed toward mainstream … and we suffer from not having enough exposure to premium," Swinburn said in a conference call with analysts. "What you will see in all of our innovation activity that we have undertaken over the last couple of years and going forward, we are very much skewed toward premiumizing the portfolio."
In April, Molson Coors picked up Central European brewer StarBev for $3.54 as it attempts to expand the range of its brands and strengthen its position during supplier negotiations.