Earnings call transcript: Molson Coors Q3 2025 misses forecasts, stock steady

Molson Coors Beverage Company reported its third-quarter 2025 earnings, revealing a slight miss in both earnings per share (EPS) and revenue compared to analyst expectations. The company's EPS came in at $1.67, falling short of the forecasted $1.71. Revenue was reported at $2.97 billion, below the anticipated $3.04 billion. Despite these misses, the stock remained relatively stable in pre-market trading with a minor decline of 0.05%, trading at $43.20.

Key Takeaways

• Molson Coors' Q3 EPS and revenue missed analyst expectations.
• The company recorded significant non-cash impairment charges totaling $3.87 billion.
• Stock price remained stable despite the earnings miss, indicating muted market reaction.
• The company reaffirmed its guidance but at the lower end of previous ranges.
• Strategic focus on restructuring and portfolio optimization highlighted.

Company Performance

Molson Coors faced a challenging third quarter, with a 3.3% decline in consolidated net sales revenue and an 11.9% drop in underlying pretax income. The U.S. beer industry, which saw an estimated decline of 4.7%, continues to exert pressure on the company. Despite these challenges, the company remains committed to strengthening its core and economy beer portfolios, with brands like Peroni showing a 25% increase in volume.

Financial Highlights

• Revenue: $2.97 billion, down 3.3% year-over-year.
• Earnings per share: $1.67, down 7.2% from the previous year.
• Non-cash goodwill and intangible asset impairment charges: $3.87 billion.

Earnings vs. Forecast

The company's EPS of $1.67 missed the forecast by 2.34%, and revenue fell short by 2.3%. This performance is notably below the company's historical trend of meeting or exceeding expectations, reflecting the broader industry challenges and internal restructuring impacts.

Market Reaction

Despite the earnings miss, Molson Coors' stock showed minimal movement in pre-market trading, with a slight decrease of 0.05% to $43.20. This stability suggests that investors may have anticipated the challenging quarter or are focusing on the company's strategic initiatives and long-term outlook.

Outlook & Guidance

Molson Coors reaffirmed its guidance for 2025, albeit at the lower end of previous ranges. The company expects net sales revenue to decline by 3-4% and underlying pretax income to decrease by 12-15%. The focus remains on optimizing the portfolio and expanding the Beyond Beer segment, particularly with brands like Topo Chico.

Executive Commentary

CEO Rahul Goyal emphasized the cyclical nature of the current industry challenges, stating, "We still believe that the incremental softness in the industry this year is cyclical." Goyal also highlighted the company's urgency in addressing market conditions: "We are moving with a sense of urgency and with a clear purpose."

Risks and Challenges

• Continued decline in the U.S. beer industry, impacting sales volumes.
• Significant impairment charges affecting financial results.
• Ongoing restructuring efforts may disrupt operations in the short term.
• Macro-economic pressures influencing consumer behavior and spending.

Q&A

During the earnings call, analysts inquired about the company's strategy in the Beyond Beer category and the impact of restructuring on future growth. New CEO Rahul Goyal reiterated the commitment to portfolio optimization and disciplined capital allocation, viewing current market challenges as temporary and cyclical.

Full transcript - Molson Coors Brewing Co Class B (TAP) Q3 2025:

Operator: Good morning and welcome to the Molson Coors Beverage Company Third Quarter Fiscal Year twenty twenty five Earnings Conference Call. With that, I will hand it over to Tracey Mangini, Vice President, Investor Relations.

Tracey Mangini, Vice President, Investor Relations, Molson Coors: Thank you, operator and hello everyone. Our discussion today includes forward looking statements within the meaning of U. S. Federal securities laws. For more information, please refer to the forward looking statements disclosure in our earnings release.

In addition, the definitions of or reconciliations for any non U. S. GAAP measures are included in our earnings release. Please note that with the exception of earnings per share, all financial metrics are in constant currency when referencing percentage changes from the prior year period. With me on the call today are Gavin Hattersley, former Chief Executive Officer, who retired October 1, but remains with the company on an advisory capacity until year end Rahul Goyal, Chief Executive Officer and Tracey Jobier, Chief Financial Officer.

Today, Gavin would like to share some opening remarks before passing to Rahul to provide an initial high level view of his vision going forward. Tracy will then wrap up with a brief review of the quarter and our 2025 outlook. A more detailed presentation of our quarterly performance, including financial and operational metrics and drivers, is available in our earnings release and earnings slides, which were made available earlier today on the IR section of our website. Upon the conclusion of our prepared remarks, we will take your questions. And as always, we ask that you limit yourself to one question and then if needed, return to the queue.

With that, I will pass it to you, Gavin.

Gavin Hattersley, Former Chief Executive Officer, Molson Coors: Thank you, Tracy and hello everybody and thank you for joining the call. I am pleased to be here today for what is my last earnings call with Molson Kurz. It has been an incredible journey and I could not be prouder of this team and the strong foundation that we have built. This includes our iconic brands across the world, our leading capabilities from supply chain to marketing, our dramatically improved balance sheet and our strong free cash flow generation. And while I'm retiring during a difficult time in the industry, I am confident in the company's ability to return to growth.

So with that, it is my great pleasure to introduce Rahul, who took over the role of CEO on October 1. During my six years as CEO, I worked closely with Rahul. His deep strategic insights, institutional knowledge, fresh perspectives and proven ability to deliver, which are particularly important in these dynamic times, make him, in my view, the right choice for the job. And while he has only been enrolled for about a month, he has certainly hit the ground running. And to share more about this, I'll pass the call to Rahul.

Rahul Goyal, Chief Executive Officer, Molson Coors: Thank you, Gavin. It has been a true privilege to work with you for so many years, and I look forward to building on your many accomplishments and continuing to support the strong culture you have built that makes Bolt and Coors so special. Now clearly, these are dynamic times, and we, like many staples companies, have been impacted by macro related factors that have pressured consumption behavior. In The U. S, these macro impacts have had a disproportionate effect on the lower income and Hispanic consumer.

And within beer, these consumer segments have driven a reduction in the number of buyers as well as spend per trip with a continued shift to singles in the third quarter. In Europe, the macro environment has also contributed to continued industry softness, pressuring demand across our regions. But we continue to believe that the incremental softness in the industry this year is cyclical. And we believe that we are well positioned with a healthy balance sheet, strong free cash flow and great brands that serve a wide range of consumer occasions and preferences. This all helps us to navigate these near term cyclical headwinds while investing in our business to support the long term growth.

I know everyone is eager to hear more about my vision for the future, and there will be more details to come. Today, I would like to provide a high level view of our strategic priorities and how we plan to adapt in these challenging times, improve our commercial performance, capitalize on opportunities and ultimately return to top and bottom line growth. I want to assure you that we are moving with a sense of urgency and with a clear purpose. In my first thirty days, we have already begun to implement structural changes, both in terms of leadership and operations, to put us on the path to success. At the highest level, it begins by focusing on our portfolio to build strong and scalable brands in both beer and Beyond Beer.

This entails prioritizing our investments to build on the strength of our core and economy beer portfolios and to transform our above premium beer and beyond beer portfolios. In beer, we already have a strong core portfolio with iconic global brands and regional market leader. They are the majority of our business. So we intend to continue to put strong commercial pressure behind them. For Miller Lite and Coors Light, this means new campaigns and high profile sports and music alliances that build on their strong brand health and support our ambition for shared growth for these brands.

And for Banquet, we intend to capitalize on its impressive success by leaning in even more to fuel its strong momentum and to continue to bridge the sizable distribution gap with Light. Recall that Banquet is only in just over half the buying outlets of Coors Light. And not only is Banquet an important growth driver in our U. S. Business, but it offers learnings that we believe can be applied more broadly across the portfolio.

We also plan to selectively increase our focus on certain economy brands, like Mile High Life and Keystone Life, which are big brands with loyal consumer base. We firmly believe that all price segments matter. And while as an industry, we are not seeing trade down at the brand level, in today's environment, more than ever, economy is an important segment. And we continue to see big opportunities in above premium. While we have had strong premiumization success in markets outside The U.

S, we meaningfully under indexed in above premium in The U. S. And we plan to lean in even harder to change that in both beer and beyond beer. In beer, it's no secret that we think Peroni has great potential. It's only been two quarters since we fully onshored Peroni and activated our commercial plans, and we are already seeing good progress with brand volume up 25% in the third quarter.

And with expected increases in media investment next year, including programming for the Olympics and with only about one third of the distribution of the other major competitors, we see significant runway ahead. We also remain committed to stabilizing Blue Moon. And to be frank, we haven't seen the success we would like. Recent innovation with non ALK and high ABB brand extensions have been encouraging, while the core Blue Moon Belgian White continues to be challenged. We are going to be looking closely with a fresh commercial perspective at what we can do differently to best ensure that this big and important brand supports our premiumization objectives.

Now while beer is our roots and at the core of our business, you can also expect us to step up our focus on Beyond Beer because we believe we can win here. Not only does it help to premiumize our business, but it also creates value for our customers by appealing to a wider range of consumer preferences and serving more occasions. In flavored alcohol, we already have big brands and some have been re challenged recently. But Topo Chico is a great example of how with the right commercial approach, we can improve trends. By focusing investments on the markets where the Topo Chico brand most strongly resonates and through thoughtful innovation, we achieved positive dollar share gains in the third quarter in these regions.

And we recognize we have gaps, including RTD spirits, and we intend to fill them. In non alk, we are focused on building scale, and we are off to a great start. We believe our partnership with Pever Tree in The U. S. Provides a strong base from which to grow our total non alk portfolio.

In fact, Peavtree volume has been performing strongly, and it has been very well received by distributors and retailers. And we are excited by the opportunity to significantly grow the brand in the years to come. And this is just the beginning of our non ALK efforts as we see opportunities to enter some other interesting areas. So we are making the infrastructure investments in people and systems that help to support the development of this business into something meaningful over time. Now to achieve our commercial ambitions, we are taking a fresh look at our approach to commercial execution and at opportunities to optimize our cost structure to fuel reinvestment in the business.

On the commercial side, creating value for our customers and consumers remains at the forefront of all that we do. But we believe we can be even more effective at this by focusing ownership of the business even closer to the market. And we intend to do this by deploying marketing and G and A investments based on specific market dynamics and portfolio priorities. This should help to increase our speed of decision making, our agility to execute and ensure greater accountability and return oriented mindset at the local level of our business. On the cost side, as announced last month, we are implementing a corporate restructuring plan of our Americas business unit, designed to create a leaner, more agile organization while advancing our ability to reinvest in the business.

This entails reducing our Americas salaried headcount by approximately 400 positions or 9% by the end of the year. This includes hundreds of salaried positions that were already opened due to headcount prioritization efforts earlier this year and those who may be granted voluntary severance as part of this restructuring. We intend to redeploy some of these savings to step up our investments behind key brands, commercial capabilities and in supply chain and technology that support ongoing productivity and efficiency. And we will continue to be disciplined stewards of our capital, using a dynamic capital allocation approach, balancing investments in M and A to fill portfolio gaps, while continuing to return cash to shareholders. We'll be sharing more on capital allocation in the near future, but today, let me be very clear on two things.

First, we seek scalable deals that we expect to be accretive to both top and bottom line and are prudent from a balance sheet perspective. And second, we remain committed to our dividend and to our share repurchase program as we continue to view our stock as a compelling investment. Now there is a lot of work to do, but we see a clear path forward. Results will take some time, but we are moving with a sense of urgency. We're confident we have the right brands and the plans to be successful.

And I look forward to updating you on more of the details of strategy and financials and operational objectives in the coming months. With that, I will pass it to Tracy, who will talk about our financial performance and outlook.

Tracy Jobier, Chief Financial Officer, Molson Coors: Thank you, Rahul. Third quarter consolidated net sales revenue was down 3.3%, underlying pretax income was down 11.9% and underlying earnings per share was down 7.2%. On an underlying basis, the key quarterly drivers were largely as expected. The U. S.

Beer industry was down minus 4.7% based on our internal estimates. Our U. S. Volume share was down 40 basis points based on our internal estimates, including relatively better share performance in the on premise channel compared to the off premise. Contract brewing was a 450,000 hectoliter or three percentage point headwind to the Americas financial volume.

Excluding contract brewing, U. S. STWs outpaced FCR resulting in a nearly two percentage point benefit to Americas financial volume in the quarter. EMEA and APAC volume continued to be pressured across all regions by ongoing soft market demand and a heightened competitive landscape. The Midwest premium remained elevated, but was within the expected price range although at the higher end.

And marketing was up, while G and A was down largely due to lower incentive compensation as compared to prior year. While our discussion today as typical has been on an underlying basis, we also recorded a non cash partial goodwill impairment charge of $3,600,000,000 as well as non cash intangible asset impairment charges of $274,000,000 in the quarter, which are discussed in detail in today's earnings release and 10 Q. I also wanted to address the execution of our share repurchase plan during the quarter. Restrictions under our policy have prohibited us from executing under the repurchase plan during the open trading window following last quarter's earnings because we were in possession of material non public information regarding our CEO search. We expect our regular quarterly trading window to open tomorrow and we want to stress that we remain fully committed to our share repurchase plan and continue to strongly believe our stock is a compelling investment.

With that, let's discuss our outlook. We are reaffirming our 2025 guidance that we now expect to come in at the low end of the prior ranges for our key metrics. Those key metrics and ranges are as follows: net sales revenue to decline 3% to 4% on a constant currency basis underlying pretax income to decline 12% to 15% on a constant currency basis underlying earnings per share to decline 7% to 10% and underlying free cash flow of $1,300,000,000 plus or minus 10%. Now before we get into the details, I'll remind you that the impacts of the global macro environment are multifaceted and difficult to predict. And while we have included in our guidance our best estimate of some of these factors, external drivers may significantly impact our actual results either up or down.

Starting with the top line, we now expect lower year end U. S. Distributor inventory levels. Year to date, U. S.

STWs largely caught up to STRs in the third quarter. However, given lower twenty twenty five volumes impacted by industry performance, we now anticipate year end distributor inventories to be lower compared to year end 2024 on an absolute basis. The year end days of inventory to remain relatively consistent and at what we view as healthy levels entering the New Year. As a result, the fourth quarter, we expect The U. S.

STW trend to trail The U. S. STR trend excluding contract brewing. All other top line drivers remain unchanged. We continue to expect U.

S. Industry volume to be down on average 4% to 6% for the second half of the year, while mindful that comparisons versus the year ago period were somewhat softer earlier in the third quarter before becoming more difficult into year end. We will cycle 1,900,000 hectoliters of contract brewing volume in The Americas in 2025 related to PEP and the BAT and will cycle the remaining 300,000 hectoliters in the fourth quarter. And we continue to expect an annual net price increase of 1% to 2% in North America in line with the average historical range and mix benefits from cycling contract brewing from 2024 as well as from premiumization in both business units. Moving

Operator: down the P and

Tracy Jobier, Chief Financial Officer, Molson Coors: L, we expect COGS to be negatively impacted by volume deleverage, including the lower expectations for year end U. S. Distributor inventory. Also, Midwest premium pricing has continued to increase. Our guidance assumed a price range of $0.60 to $0.75 per pound.

This implies for the full year, Midwest premium costs will exceed the prior year by 40,000,000 to $55,000,000 with most of the increase occurring in the second half of the year. However, as you can see on Page 18 of our earnings slide, the price trended at end of this range in the third quarter and was slightly above it in October. Therefore, we expect increases to be at the high end of that range. As for MG and A, we continue to expect it to be down slightly for the year due to lower incentive compensation, which is largely offset by higher non ALF infrastructure costs as well as the Sievertree one time transition and integration fees in the first half of the year. Again, those one time fees were approximately $50,000,000 and will be recovered through net sales over the next two years, which began in the second quarter of this year.

In closing, we remain committed to improving shareholder value and look forward to sharing more about our strategic plans and long term objectives in the coming months. With that, we will take your questions. Operator?

Operator: Thank you. We will now begin the question and answer session. Our first question today comes from Peter Grom with UBS. Peter, please go ahead.

Peter Grom, Analyst, UBS: Great. Thank you. Good morning, everyone. So two questions from me, one for Rahul and one for Tracy. First, Rahul, you've been in the role for about thirty days at this point and recognizing you've been with the company for some time.

But just as you step into the CEO role, would love to get your perspective on what you see as the biggest opportunities and challenges ahead. And then, Tracy, I just was hoping to get some color on the implied improvement for the fourth quarter embedded in the top line guidance, just given the commentary on tougher category comps and now expecting to shift behind in Americas. Can you just walk through the building blocks for 4Q as you see them today? Thanks.

Rahul Goyal, Chief Executive Officer, Molson Coors: Thanks, Peter, and good morning to you. If you look at the last thirty days, my focus and my priority has been, I would say, two fronts. One is listening to our people and then our customers. And if you look at our business, right, I mean, I come from a place of we have a strong foundation. We've got great brands, healthy balance sheet, but we have great opportunities.

So if you look at our performance this year, majority of our share losses has been a few in the few areas, the economy category or the flavor category. But we've got core brands that are pretty strong. And so we need to find a way to make them stronger. In above premium, we have great opportunities with the portfolio we have. Peroni is doing really well.

We have some more work to do in Blue Moon. Again, the Beyond Beer strategy, I think this year of EVO TREE has been a great add to our business. So if you look at the imbalance, I'm pretty excited about a number of things we have going, but recognize the challenges we have in some other parts of our portfolio and wanting to really get behind it. I think the piece I'll leave you with is we're definitely moving with a sense of urgency and pace, right? I mean, we recognize the volatility in the category this year, but we also recognize the things that we can work on within our team.

So looking forward to it, Peter. It's been a quick thirty days, but definitely moving with pace. Tracey, you want to take the second one?

Tracy Jobier, Chief Financial Officer, Molson Coors: Yes. Thanks, Peter, for the question. So in terms of Q4, look, we are expecting better top line performance in our EMEA, APAC and Canada business units. And in addition, we are lacking softer comps from contract brewing in The U. S.

So that's a big driver. Those two are the big drivers of our top line performance. And then just as that also translates to better bottom line performance as well as we will have lower G and A in the fourth quarter really driven by the lower incentive compensation.

Operator: Thank you. Our next question comes from Chris Carey with Wells Fargo. Chris, please go ahead.

Chris Carey, Analyst, Wells Fargo: Hi, good morning everyone.

Tracy Jobier, Chief Financial Officer, Molson Coors: Good morning.

Chris Carey, Analyst, Wells Fargo: You're remiss not to say congratulations, Gavin, on your career and best of luck. And so just from an inventory perspective, I think the message today is that you expect them to be lower in 2025 on an absolute basis, but closer to historical average on a days inventory basis. I just wanted to maybe check this. Does that mean if the category improves a little bit next year from the current lows, you would be entering 2025 with low inventories, say, than average if the category picks up just a little bit? So I'm just conscious beer distributors often use year end to clean up inventory and perhaps they're feeling a bit more anxious about that even more this year.

And so I just wanted to test kind of how you would see your inventory position going into next year. And I was listening to the prepared remarks from Rahul, thank you for all that. Is it fair to say that you don't see this massive need to reinvest in the business as is typical when you enter a new leadership position and that with restructuring and sustained commitment to some of the strategies that you've laid out as you evolve into new strategies. Don't see that or do you see a business that perhaps is a bit under invested in this opportunity going into next year on top of a soft year. So thanks on the inventory and the investment piece.

Rahul Goyal, Chief Executive Officer, Molson Coors: Yes. Thank you, Chris, and good morning. I think if you look at this Q and A inventory, I think the way we look at it is, we've been a pretty healthy place, right? I mean, you've seen what's happened to the category this year. So going into end of this year and getting ourselves into next year, days of inventory, we believe we're in a good place.

In terms of our capacity to pivot and make sure we have the right level of supply in Q1, we feel good about it with our brewery network and infrastructure. So and if you remember, we were lapping a few things around the Fort Worth strike, etcetera, earlier this year. So I think we feel pretty good about being in a good place, closing out this year, but also preparing and pivoting to getting our distributors the right inventory levels next year. In terms of your question of shape of reinvestment, I've shared with you a couple of comments, and I know probably looking for the clarity of what 2026 looks like. But I'm committed to making sure that we are building our brands, right?

And if you look at our category, we need to be championing beer. We need to be making sure we, as along with other folks in the category, are making sure that the category is healthy. And in that, we're going to be leaning in and making sure we can support our brands appropriately, whether it's the core brands above premium. In the economy, one, I call out as being very disciplined around geographic view of our economy portfolio and making sure we are investing it in a smart way. The other part I'd just call out is our balance sheet and cash flow, right?

I mean we are committed to returning cash to shareholders, but we also want to find ways to deploy capital to fill some gaps in our portfolio to get our growth going. So I would say it's going to be a combination of all of those in terms of making sure our brands are well supported, but also using our balance sheet in a smart way of enabling top and bottom line growth, but also returning cash to shareholders.

Operator: Thank you. Our next question comes from Bonnie Herzog with Goldman Sachs. Please go ahead.

Tracey Mangini, Vice President, Investor Relations, Molson Coors: Thank you. Good morning, everyone. I was hoping you could give us a little more color on the pressures you're facing or that are facing the beer category. And I guess why you believe it's cyclical versus structural? Essentially and then what is your expectation for category growth this year?

And do you expect the category to recover next year? And if so, what do you think will be the drivers of this? I guess, ultimately, where do you see the biggest areas of opportunity and I guess risk next year? Thanks.

Rahul Goyal, Chief Executive Officer, Molson Coors: Thanks, Bonnie, and good morning to you. So I think I'll break your question into two or three pieces, right? So if you think about the pressures on the category pre-twenty twenty five, the last few years, our category has been in the minus three ish range. And if you look at this year, we've been in the minus 4% to minus six And I think that's what we shared at the end of Q2 that we believe this year's category is going to be in the minus 2% minus 6% minus 4% to minus six And this year, every quarter, every month has been pretty volatile, but we probably end up in that range, right? So I think our internal estimates suggest that we're in the minus 4.7% range in terms of the category health.

So there's something different this year. Right now, there's the structural issues that we've all talked about in the industry, whether it's health and wellness, whether it's the generational change. But this year, there's been a lot of other macro issues, right, whether it's the economic impacts, tariffs, immigration. So we still believe that we are this year or going into next year is cyclical. Once we get through some of these macro issues behind us, we should be getting back to the pre-twenty twenty five levels.

So that's how we're thinking about the business. And the way I would call that out is if you look at our portfolio, we definitely have so much more opportunity to really lean into our business, right? So while we've done a great job of premiumizing outside The United States, we're so under indexed in The U. S. And therefore that opportunity for us there remains.

And then if you look at our share losses this year, it's been around flavors and economy, and that's why you see me talking a little bit more about that because those are the gaps we need to be filling or improving on. So hopefully, I answered your question about category performance and just our views on that in the last in the short term and then also the long term.

Operator: Thank you. Our next question comes from Andrea Teixeira with JPMorgan. Please go ahead.

Drew Levine, Analyst, JPMorgan: Hey, good morning. This is Drew Levine on for Andrea. Thanks for taking our question. So Rahul, you just noted the expectation, I guess, that industry could return to pre-twenty twenty five levels. You also noted in the prepared remarks that results will take some time to see.

So I guess if you could just provide any more context to if you think that the company could return to low single digit organic sales growth, if the industry remains down in that sort of 3% range. And then you also talked about being willing to deploy the balance sheet and cash flow to fill portfolio gaps. I know under Gavin it was talked about as sort of a string of pearls approach. If you think that given where the industry is if we could be on the lookout for anything a little bit more sizable? Thank you.

Rahul Goyal, Chief Executive Officer, Molson Coors: Yes. Thank you, Dhruv. Just a couple of comments, I think, your few questions. With the industry being where it is, I think we still see the pathway for delivering growth both in top and bottom line. If you look at this year, what's impacted is obviously category, but also on the COGS side, right?

I mean, there's been so much volatility around inflation, Midwest premium, I know we've spoken about. So those are the, I would say, the headwinds we're dealing with this year. If you again go back to the pathway to get back to top line, I mean, in The U. S, I'd break down our portfolio maybe in four buckets. Strengthening core and economy becomes important.

And these are big parts of our portfolio. And frankly, they are big parts of our distributor portfolio. So making sure these parts of the portfolio are strong and healthy is important. And I would say we've done a decent job on share with our core brands, right? Our core brands are still higher share than 2022, but we have work to do on economy.

But the runway we have in above premium is so much in beer and beyond beer, right? In beer, we are under index. I called out in my comments that we have work to do Belgium White, Blue Moon, but Brony is growing. Flavor is something that is volatile. We had some good success with our brands, but this year, we have some challenges with Simply Topo starting to get much stronger.

And then the non ALK piece, right? Fever Tree was a great ad. It's an exciting brand for us. It's an exciting brand for our network. So between the combination of that and along with our Canadian and our Europe business, we can get our business back in low single digit growth.

And then there's obviously deploying capital, right? So your question of M and A. We want to make sure we deploy capital for brands that fill gaps in our portfolio, right? So I think that's important. Two, we want to be disciplined about it being accretive to both top and bottom line, right?

So we're not going to chase top line just for the sake of top line. And then third is we want to do it in a way that is prudent from a balance sheet perspective and utilizing our balance sheet. So we stay committed to our investment grade rating. We stay committed to our 2.5x leverage ratio, returning cash to shareholders, but we can deploy capital to really augment portfolio and make sure we're making some changes that are meaningful to our total enterprise. So probably can't give you a specific number or size, but definitely want to lean in, in the right way of enabling total enterprise growth.

Operator: Thank you. Our next question comes from Peter Galbo with Bank of America. Peter, please go ahead.

Peter Galbo, Analyst, Bank of America: Hey, good morning, Devin, Rowell, Tracy. Thanks very much for the question. I also actually wanted to ask two questions on the balance sheet or related to the balance sheet. Molson Coors has done I think a much better job relative to history of kind of preparing the balance sheet to weather maybe some downturns or more structural cyclical headwinds. But two things I'd like to ask kind of one, Tracy, think there's a this quarter you moved into a relatively big bond maturity that's coming in the next twelve months.

Just maybe how we should think about addressing that, particularly as we start to contemplate 2026? And the second would be just on the impairment itself, again relatively sizable to the balance sheet. Raul, I think understandably you have to go through impairment testing, but in the context of cyclical versus structural, I would think this would lean more towards the structural end. So maybe you can help compare and contrast, just what happened with the impairment charge relative to kind of your views on the overall industry? Thanks very much.

Rahul Goyal, Chief Executive Officer, Molson Coors: Thank you, Peter. Let me have Tracy answer the bond maturity question, and then I'll take your impairment question.

Tracy Jobier, Chief Financial Officer, Molson Coors: Thanks, Peter. So yes, we do have some debt coming due in 2026. And as with all our debt, we will review that as we get closer to the due dates. I think the important thing is that we remain focused on maintaining our leverage ratio, as Raul just said, in alignment with the target of being below 2.5x. And we are currently in that range and we will make sure that going forward we are in sort of below 2.5 times.

So closer to the time, we'll assess what we do with the debt. Thanks, Peter.

Rahul Goyal, Chief Executive Officer, Molson Coors: Yes. Thanks, Tracy. And Peter, I mean, you're absolutely right. I mean, took the impairment charge to goodwill of about $3,600,000,000 in Q3. And so firstly, a number of factors that impacted, right?

So obviously, this year's performance, there is a question about the outlook of our business. But the other factors that come in is discount rates, risk premium and frankly, the multiple, right? So the way I think about this is we can get this business back to top and bottom line growth. We think we are very undervalued in the context of our market cap right now. Those are the things that we need to lean into and make sure we can demonstrate quarter over quarter.

And this is something that, as you said, it's something we need to do every year and check ourselves to make sure we're thinking of the business in a prudent way and the impairment is and the impairment is a function of that.

Operator: Thank you. Our next question comes from Bill Kirk with ROTH Capital Partners. Bill, please go ahead.

Peter Galbo, Analyst, Bank of America: Good morning, everybody. Hey, Raul. I was hoping to get a little bit more on your vision for the business. You mentioned portfolio gaps a couple of times. Do you think the gaps are more related to regions?

Are the gaps more like categories related or the gaps brand specific? And then maybe backing up even further, should the company's focus become more narrow? Or should the focus broaden and introduce new regions and categories?

Rahul Goyal, Chief Executive Officer, Molson Coors: Yes. Thank you, Bill. Definitely looking forward to sharing a lot more about the plans and how to think about that. But let me maybe break it down in three or maybe three different ways. So one is about portfolio.

As you said, we have a pretty broad portfolio in The U. S. We have a great broad portfolio in Canada, even in Europe. And generally, we do believe all segments matter, right? So we do definitely need to work within that.

Now how we work the specific parts of the portfolio, I think that's where you see me highlighting some of the areas of opportunity we have. Now in some parts, we do have gaps, right? So I talked about flavor part of our portfolio, right? So we have some gaps there we need to fill. We filled some gaps in Beyond Beer in non alk, right?

So there is an element of both fixing some of the portfolio plays we have, filling some gaps. So that's, I would say, part one of the broad plan. The second part is execution, right? And I think, as all of you Wild Beer is a global business and a national business, it is a very local business. So us executing as closest as possible to customers and distributors and retailers is going to be super important.

And that's not just in terms of just the sales function, right? It is about how we deploy our people resources, how we deploy our marketing resources, has to be as close as possible to our consumers and customers. So there is definitely a difference in how we execute and take that to our brands to market. The third element to your question is capabilities. We have a strong foundation in our infrastructure, whether it's breweries, whether it's supply chain.

But it is an area that we need to make sure we are keeping up with either on the commercial side, whether it's on the technology side, optimizing our brewery footprint in the best possible way with making sure we can meet some of the needs of our new capabilities. So you're definitely going to see that us leaning into that. And then capital deployment, right? I mean, our capital allocation approach, Tracy mentioned us wanting to be disciplined about that. So I would say those are the broad areas.

Your question about being broader or narrow, we love the markets we are in. I mean, we are in some of the best profit pools in the world. We just got to win in those. So that's how you're going to see us lean in on winning in the markets that we currently have a pretty strong foundation

Operator: Thank you. Our next question comes from Filippo Foloni with Citi. Please go ahead.

Filippo Foloni, Analyst, Citi: Hi, good morning everyone. Raul, so I wanted to ask about your experience working with and building the partnership with Coca Cola, Fever Tree and some of the non ARC initiatives like Zola. Should we expect more initiatives like that from also cars in the future, to your point as a way to fill some gaps in a capital efficient way? Or do you see still the opportunity for maybe more traditional acquisitions going forward? And then on the restructuring that you've announced recently, you indicated most of the charges, 35,000,000 to $50,000,000 will be in Q4.

Can you provide some sense of the savings on a run rate basis going forward? When should we expect those savings will flow through? Thank you.

Rahul Goyal, Chief Executive Officer, Molson Coors: Thank you, Felipe. Let me talk about the portfolio and the partnership comments, and Tracy, if you can help on the restructuring piece. If you look at our portfolio, Lipi, mean, we're definitely going to be focused on beer. I just want to make sure, mean, that's been our roots and it's a big part and foundation of our business. So beer is always going to be super important and definitely leaning into that space.

In terms of partnerships and acquisitions, I think if you look at what we have done with both Coca Cola, Viva Tree or I think we've figured out a way of working with partners to really leverage our platform, leverage our infrastructure to scale brands. And I think I would say both of those partnerships have worked really well for our business. But in terms of deploying capital, I do think we continue to look at areas and opportunities to deploy capital to augment our portfolio. Your question of whether we're going to do more partnerships versus more acquisitions, I think that is a function of how these opportunities come up. But what you will see us leaning into spaces where we have gaps in the portfolio to fill, right?

Maybe three, four years ago, we didn't have the capital to deploy. But right now, I think our balance sheet is in a strong way that we can do it in a disciplined way. So continued focus on beer, continued focus on some of the above premium agenda. But in the beyond beer space, we probably need to be both creative and deploy capital to fill some gaps. And Tracey, you want to?

Tracy Jobier, Chief Financial Officer, Molson Coors: Yes. Thanks, Lipa. So yes, in terms of cost savings, look, we haven't provided specific cost savings targets as we're still finalizing the details around this restructuring. What we have said though, you correctly say, we expect charges to be in the range of 35,000,000 to $50,000,000 They are expected to be the future cash expenditures over the next twelve months. Substantially, all of the charges are expected to be related to severance payments and post employment benefits.

But one thing in terms of the cost savings, look, a meaningful amount of the headcount reductions was from the elimination of open positions in 2025. So we wouldn't expect to get a full benefit in 2026 because we did have the open headcount as we prioritized our costs in 2025. That's from sort of the cost savings point of view. Because we do intend to be employed some of the savings to invest behind our brands, to invest behind our commercial capabilities as Raul has said both in commercial and in supply chain and in technology to support the ongoing productivity and efficiencies around our business.

Operator: Thank you. Our next question comes from Steve Powers with Deutsche Bank. Please go ahead.

Tracey Mangini, Vice President, Investor Relations, Molson Coors0: Great. Thank you. I guess these are probably two follow ups to much of what you've just recently discussed. On the restructuring, I'm curious, you spoke about how this is going to make the Americas organization faster, more nimble, more agile. Just curious as exactly how the restructuring will enable that increased speed, number one.

And then number two, Raul, you've talked a lot about the portfolio in beer versus beyond beer. I'm just I'm still struggling to really conceptualize the balance of those investments in your mind. Clearly, it's a game of the hand. And as you described them, both are important. But just again, that balance beer, obviously, the bigger business, investments to drive premiumization seem to be a core part of the vision.

But do you see Beyond Beer as the bigger growth driver going forward? I'm trying to figure that out. And if so, how does that influence your investment prioritization, broader capital allocation, etcetera? Thanks for both those.

Rahul Goyal, Chief Executive Officer, Molson Coors: Thank you, Steve. So maybe address both the different questions. One is about restructuring and portfolio. So if you think about going back to what I said about customer and consumer focus, we wanted to make sure that the leaders driving that agenda had to sit around the table, right? So whether it's U.

S. Sales, whether it's our marketing leadership, whether it's the Canadian leadership, we needed to make sure that in a land where category we had challenges in the category, right? I mean, we talked about minus 3s, minus 4s to minus 6s. We need to be getting much closer to how we execute in the front end of our business. So it starts from that thesis of making sure we can bring these leaders around the table, really make sure we're executing with speed, we're pivoting where we need to, we're being regionally focused where we need to.

And it's also about shifting our resources, internal, both people and marketing dollars, where we see the opportunities, right? So that requires us to be, I would say, a lot more quicker, a lot more nimble. And it starts with, obviously, being leaders having the ability to drive that. The other part I obviously talked about briefly was around making sure we can enable our teams who are closest to the market to make those decisions, right? And so how do we drive both decision making and accountability as close to the markets as possible?

So I think those are the two few principles that we've used, that's what we're trying to drive in terms of the restructure changes both in The U. S. And in Canada in making sure we can execute faster because, yes, we are in a category context that is challenged. In terms of portfolio, I'd break it up in two different ways. One is around marketing dollars, investment and then about balance sheet deployment of capital, Steve, you're going to see us continue making sure we have the right pressure against our big brands.

So whether that's Guards Light, Middle Light, Banquet, things like Peroni, Blue Moon. So those are important brands that we believe have so much potential and make sure we are winning in the beer landscape. So you will see us continue being super focused on those and making sure we have the right marketing pressure around it. In terms of Beyond Beer, we do want to make it big enough that it starts having an impact to our total enterprise. I would say we are still early in that journey.

And that's where I would say the balance sheet comes in to help us a little bit on making sure we have the right portfolio. In terms of what the right balance is between beer and Beyond Beers, Steve, I think more to come on that piece. But the way I would think about investment is making sure we have the right marketing pressure against our big brands, but making sure we can use the balance sheet to augment our portfolio, add some scaled brands that we can really use as a foundation in the Beyond Beer space.

Operator: Thank you. Our next question comes from Michael Lavery with Piper Sandler. Please go ahead.

Tracey Mangini, Vice President, Investor Relations, Molson Coors1: Thank you and good morning and congrats Gavin and Rahul both. Just want to come back to a couple of things. You touched on needing to win an economy. You touched on in your opening remarks, just wanting to focus a little more on High Life and Keystone. Can you maybe touch on why you think you might not have been winning there already?

And whether it's maybe an innovation issue, a price issue, just not enough marketing? But what more maybe should we expect looking ahead? And then just a follow-up on the goodwill. You touched on how is impacted by the deal assessment process is impacted by this past year's results and evidently has a bit of backwards look, but also seems to reflect an outlook ahead. And maybe what is kind of the balance there?

And how much is it more a function of what's happened already or what you think is to come?

Rahul Goyal, Chief Executive Officer, Molson Coors: Thank you, Michael. So again, just let me talk about the economy portfolio and then add a few comments. And Tracy, anything else you would like to add on the goodwill. But if you I would go back to a couple of ways to think about the economy portfolio. First is consumer led, right?

I mean, the consumer I think you and everybody is aware, I mean, the consumer from a Staples perspective is pressured. And so for us, making sure we have a portfolio that can meet our consumers in every location. In this category, in beer, we definitely don't see trade down from a brand perspective, but we have brands that consumers love like High Life, like Peachtone, like Pilsen in Canada, etcetera, right? So we have a broad economy portfolio that consumers really love. And this is big, Michael.

I mean this is a big part of our portfolio in terms of scale and volume. And frankly, it's a big part of our customers' portfolio. So making sure that we're doing the right things of keeping it as healthy as possible is super important. So the things you talked about, all of that matters, right, whether it's the right level of marketing, it's the right level of innovation, right? Again, price back in that part of the portfolio.

And I would call the regional element of it, right? So this is our portfolio is very regional, and we need to make sure that we are winning in a very, very regional way with all of that. So probably less slightly different the way we think about Squirrels Life, Middle Life, Banquet, which are big national brands that need to win in different ways. The focus on economies, I would say, a for solving a different purpose. To your point about goodwill, it is a function of this year's performance.

It's a function of discount rates, multiples. But yes, it does have a view of the outlook, right, again, versus what we had previously. And I think that was informed by this year's both category performance and our performance. So I would say those are the big drivers. But as you know, math and these things, discount rates and multiples have a big impact on some of these elements.

So Tracy, anything else?

Tracy Jobier, Chief Financial Officer, Molson Coors: No, I think you've basically covered it, Rahul. Just maybe an added thing in terms of the current outlook is the cost, particularly driven by the Midwest premium. We have seen that now in October being the highest level ever with potential more increases coming. So that was also a part of the outlook for our costs. But having said that, look, we remain confident in the resilience of the beer industry and also, as Raul has said, our ability to return to both top and bottom line growth.

Operator: Thank you. Our next question comes from Rob Ottenstein with Evercore. Please go ahead.

Tracey Mangini, Vice President, Investor Relations, Molson Coors2: Great. Thank you very much and congratulations to you Raul and to Gavin and best of luck. So I guess the question I'd like to try to approach Raul is to get a sense of your mandate from the board and to what how much freedom do is the Board giving you to the sense that if you wanted to make significant changes, it's kind of everything on the table, no sacred cows or and that kind of approach. So something that may be a departure from the past or is the mandate from the board more like just kind of stay the course, tweak things around the edges, improve execution here and there, but basically let's weather the storm and keep kind of plugging forward. So just really just trying to get a sense of kind of how those discussions went and what range of freedom you feel that you have to create shareholder value here?

Thank you.

Rahul Goyal, Chief Executive Officer, Molson Coors: Good morning, Rob, and thanks for the question. Yes, I would say we definitely our Board is always focused on what's the best thing for all shareholders, right? I mean that's definitely the lens. And frankly, I don't there is no sacred cows. I mean I think they've given us given me the freedom to say, let's make sure we have a plan that can drive the most shareholder value.

And that's what we are that's what I'm leading for. So yes, there are no secret cows. There's no constraints. I think you and everybody on this call understands the challenges that are in the category. I know there's been a lot written about our portfolio.

So I mean, all of that is real, and that's the context to work within. But in terms of the direction from the Board, it is about driving maximizing shareholder value in the best possible way we can. So definitely, we don't feel any constraint. There's going be no fixed cows. I think the tricky part in some of your colleagues asked this question, right?

Category is going through a tricky time this year. Again, I go back to we are in great geographies with big profit pools, but yes, it comes with a different shape of category health. And those are all reality context, but it doesn't take away from the opportunities we have for our portfolio. So I think that's the best way. And again, that's why you see me talk about even balance sheet.

And while we're committed to returning cash to shareholders, we're going to find the right ideas to deploy capital to get ourselves back to top and bottom line growth also. So yes, no, I understand the question, Rob, but no constraints here from the Board or anybody else.

Operator: Thank you. Our next question comes from Eric Zerotta with Morgan Stanley. Please go ahead.

Peter Galbo, Analyst, Bank of America: Great. Thank you and congratulations again to Gavin and Rahul. Rahul, hoping you can talk a little bit more about the overall level of investment and capabilities, your comfort with the current level. I know you talked about having the right marketing pressure behind the brands. But if you look a little bit more broadly, investment obviously is more broad than marketing support.

As you look at the organization, it's come a long way in terms of capabilities since 2019 and the revitalization plan. Are there areas either that need increased investment or where you need to further build out capabilities either from an OpEx or CapEx standpoint from here?

Rahul Goyal, Chief Executive Officer, Molson Coors: Thank you, Eric. Good morning to you. And yes, I would break out the capabilities in probably maybe three broad buckets, right? So one is our supply chain, wanting to make sure that we have the right level of CapEx that gets drive the right ROI, but also builds capabilities in our infrastructure. So again, give you an example, and I know we've spoken about this in the last few years is things like variety packing and things like having the ability to move flavors in our breweries.

I mean, these things were never possible maybe five years ago, and this is investment that we've made to create these capabilities in our infrastructure, right? So making sure we have the right level of CapEx, right, which is important. So I think that's one thing we're going to continue to look at. So supply chain continues to be an area of making sure we have strong capabilities. Again, outside CapEx and supply chain is things like optimization of logistics and transportation costs, right?

So some of the new tools and technology, etcetera, can enable us to do that. The other one is commercial capabilities, right? So if you think about our market share in The United States, but our category captaincy is significantly higher than the market share we have. And that means we are playing a role in driving that capability with our retailers. So that, again, goes back to examples of capabilities.

And then the last part is technology, both in terms of baseline technology needs with some of the new capabilities around AI and how do we leverage that with our infrastructure. So we're going to continue focusing on these areas. I think your question around what's the right level of investment, I think, again, more to come on that as we think about our total business. But the lens we usually have on this is what is it driving for our business, right? Is it productivity?

Is it efficiency? Is it enabling the top line? So being very clear on all the KPIs or metrics that we use to make sure that these investments are returning something to the business. So while we will focus on capabilities, it is from a lens of productivity, efficiency or to enable top and bottom line.

Operator: Thank you. Our next question comes from Kevin Grundy with BNP Paribas. Please go ahead,

Tracey Mangini, Vice President, Investor Relations, Molson Coors3: Great. Thanks. Good morning, everyone. Raul, question two questions for me actually kind of pulled together some of the themes that we've talked about. And that is your assessment of the company's cost structure more broadly, particularly from a supply chain and brewery optimization perspective.

So the company made some difficult choices at the corporate level, but as the volume outlook has certainly become quite a bit more challenging and perhaps the company's fixed cost structure is not appropriately sized for kind of the new reality, if you will. So one, do you view that as a fair assessment? And two, in light of one of the questions earlier on investment levels, do you view incremental productivity as an enabler to support higher investment levels? Or would incremental investment be a near term drag on margins? So thank you for that.

Rahul Goyal, Chief Executive Officer, Molson Coors: Thank you, Kevin. So let me address your first thing around the brewery one. And the second one, just want to make sure I got your question right. But on the brewery stuff, on our brewery infrastructure, I mean, we're always looking at ways of making our brewery network efficient, right? And you've seen some of the actions we've taken in the past.

A couple of things I'd call out as we think about infrastructure. One is around transportation costs, right, and making sure that we are looking at brewery infrastructure in the context of transportation. The other part is the seasonality of our business, right? So seasonality in terms of summer and being sure we think about that. So to answer your question broadly, yes, we're absolutely going to be thinking about all the elements of our fixed cost base.

Right now, I don't believe we need to be closing a brewery. I think we need to be smart about how we think about lines in particular breweries, where we produce what product, how do we get smarter about some of the efficiency in terms of moving our brands around. I think that's how we think about it. Fair question as we think about the volume outlook and what that does. But a cost thing will always be a focus for us, whether it's on the fixed side, whether it's on the G and A side.

I think that priority and focus will, I would say, always remain. Your question about do we need investment to drive productivity, I think that was the theme of the question. I don't believe we need some high elevated levels of investment to drive productivity. I think we need to look at our CapEx in the right way and be checking ourselves to make sure we get the right ROI. We need to make sure that the investment we have in people, technology is driving the right returns.

But I don't believe I think the question was, do I see expect a big spike investment to drive productivity? I think that I don't believe I see that right now. Think marketing, again, I want to make sure we have the right pressure against our brands, again, but check test ourselves to make sure we're getting the right return on the marketing, right? So hopefully, answered, Kevin, both your questions in terms of the fixed costing and the investment profile.

Operator: Thank you. Our next question comes from Kamil Gajwala with Jefferies. Please go ahead.

Tracey Mangini, Vice President, Investor Relations, Molson Coors4: Hey, everybody. Good morning. Congratulations all around. Also, think congratulations to Eric Serrato, who might have been the first analyst to pronounce your name correctly. You'll find name pronunciation to be a thing on many of these calls.

You're getting the same question, I guess, over and over again around the restructuring and investment levels. I think a lot of that is because in many instances when an industry is struggling and has struggled for, over a decade, we see bigger restructurings, bigger savings at the time of management change and what's been announced so far seems small. So just curious, is this just the first step and there's bigger restructuring to come or, is it sort of everything is in place now and it's time to go?

Rahul Goyal, Chief Executive Officer, Molson Coors: Coman, thanks for the question. I think I know I'm keen to also talk about our total plan, I look forward to sharing that in the coming months, right? I mean, we definitely if you think about our business, and you said this, with respect to long term trends, making sure we are looking at our cost base in the right way, I think we're going to look at everything. The piece that we took action on in the short term in the last thirty days was to make sure we are set up well in The Americas for 2026. I would say more to come as we think about all the elements of the plan.

Cost and efficiency is another element that is super important. But we were trying to move at pace as we think about setting ourselves up in The Americas for 2026.

Operator: Thank you. Our next question comes from Lauren Lieberman with Barclays. Please go ahead. Great. Thanks so much.

Good morning.

Tracy Jobier, Chief Financial Officer, Molson Coors: One thing I want to

Tracey Mangini, Vice President, Investor Relations, Molson Coors5: go back to was just in the prepared remarks, Raul, when you commented on I'm just trying find

Operator: the quote again,

Tracey Mangini, Vice President, Investor Relations, Molson Coors5: the commercial changes. I know you in answer to Steve's question, you talked a little bit about org structure, but you also talked about deploying marketing, based on market dynamics and portfolio priorities. And I just, was curious, like what were you doing before? Because that sounds like I would think that's what's already happening. So just curious how you maybe compare and contrast, and what it is that needs

Tracy Jobier, Chief Financial Officer, Molson Coors: to change? Thanks so much.

Rahul Goyal, Chief Executive Officer, Molson Coors: Yes. Thank you, Lauren. Absolutely, fair question. I think the way I would think about this is how do we react faster to the external market dynamics, right? I mean if you look at our brands, while we have big national brands, they play different roles regionally.

They operate in terms of market share we have in each state or each region is different. And we need to just find ways of being deploying our internal resources in a stronger way. The added part and some of this we were doing, right? But again, the pieces I would say is different or will be different is in the context of accountability. How do we make sure our decision making is as close to those markets as possible?

How do we make sure we can shift both people and dollar resources closest to that decision making? And I think that those are the changes that would feel different for our teams, how we operate, how we engage with our distributor network, Laurence. So I think it is things, I would say, we were doing, but we just need to lean in harder given how the category has changed, right? I mean if you look at even regional performance, we I know we talk about the national performance of the category. But the category is performing very differently in different parts of this country, and we need to make sure we're pivoting to that both from a resource perspective, from a brand perspective.

That's where the economy context comes into conversation, right? Because some of our economy brands are very big in particular geographies. And if we are not putting the right focus on those, that's the whole growth algorithm becomes very hard to make happen. So those I would say those are the big highlights I would call out, Lauren, to your question.

Operator: Thank you. Our next question comes from Nadine Sawatz with Bernstein. Please go ahead.

Tracey Mangini, Vice President, Investor Relations, Molson Coors6: Yes. Hi. Thank you for taking my question. I'd like to come back to some of the cyclical pressures that you called out in the prepared remarks. And in particular, what are you seeing in terms of consumer sentiment for your consumers in Q3 and to the extent that you can comment on this in October?

I appreciate the prepared remarks you made, but are there any internal surveys or analytics that you're able to share about what's driving consumer behavior today? And how does that help you be more confident in your statement that the incremental pressure we're seeing today is firmly cyclical as opposed to structural? Thank you.

Rahul Goyal, Chief Executive Officer, Molson Coors: Yes. And Dean, again, I understand the question, but so if I address it in maybe a few added points to give you some context or at least how we're seeing it. I mean, if you go again back to pre-twenty five, I mean, of these trends have been with us as a beer category for a long time, right, whether it's health and wellness, whether it's generational change, whether it's people making choices around alcohol, I think that some of those have been we and everybody in the industry have known about those. And if you look at the category historically, it used to be in the minus one two And the last few years, it's been in the minus 3% range. This year, I would say there's been definitely added pressure.

And you see that across staples, and beer hasn't been immune to that. So whether that is impact of tariffs on consumer sentiment, if it is the focus on the Hispanic community, any of those elements. So I do believe that has had a different type of an impact to beer category this year. And that's where once we've got through these macro issues, then we need to get back to those baseline levels of how we think about the category and then making sure we're winning in that category.

Operator: Thank you. Our next question comes from Robert Moskow with TD Cowen. Please go ahead.

Tracey Mangini, Vice President, Investor Relations, Molson Coors7: Hey, thank you, Raul. I'm trying to summarize all of the commentary about the regional execution versus the national marketing of your brands. And I just want to make sure I understand. Like you have Coors Light and Miller Lite, your two biggest brands. Is it your view that on a national level, that the marketing of those brands has been just fine?

Because there's been multiyear share losses of those. One of your competitors has made great inroads in the light category, probably at their expense. So is there do you think that the national marketing of those brands is doing just fine? And really, it's just the regional execution could improve, and that's the way to stabilize?

Rahul Goyal, Chief Executive Officer, Molson Coors: No. Thank you for that question. We definitely think there's opportunities for us as we think about how these brands show up. If you think about the work we are doing on Miller Lite with fifty year campaign, I think and if you look at share losses of Chorus Line versus in Q3 versus Q2. So definitely, that's something we're looking at of the national campaigns for our big brands and how do we lean into it differently, how we think about it going forward.

And I'll just point you pointed out to Kohler's Banquet, right? I mean, I think it's a brand that has really met a consumer need, has resonated with consumers. We've obviously executed well in the context of distribution gains, but absolutely focused on making sure we got the right campaigns for Quirks Light and Middle Light. And I think you'll see some of that play out as with live sports in the coming months.

Operator: Thank you. Our final question today comes from Gerald Pascarelli with Needham and Co. Gerald, please go ahead.

Tracey Mangini, Vice President, Investor Relations, Molson Coors8: Great. Thank you very much. Raul, I guess just going back to some of the prior commentary on this call and to summarize, is it fair to assume or expect that bolt on M and A or a more aggressive portion to be on beer ultimately becomes a more important part or a larger part of the capital allocation strategy looking forward? And then for Tracy, just going back to the Midwest premium, obviously been increasing $0.81 per pound. I know there's like less than two months left in the year.

But if the premium continues to spike, is there a spot price threshold for us to be mindful of that could potentially put your PBT guidance at risk for the year? Any color there would be great. Thanks.

Rahul Goyal, Chief Executive Officer, Molson Coors: Yes. Thank you, Jeff, for that. And Mollin, if you look at M and A and deploying of capital, we have a pretty strong beer portfolio across the world, right? I mean, we continue to fill some gaps in that. But the places where we need to fill some gaps are probably in the Beyond Beer.

So in terms of deploying capital, you will see us probably lean in a lot more on the Beyond Beer space than the beer space. But if there are ideas that make sense that augment our business and drive top and bottom line growth, we're going to look at that. But I think broadly speaking, I think your assessment of deploying M and A dollars and beyond beer is probably the right way to think about it. Tracey, do want to address the Midwest premium question?

Tracy Jobier, Chief Financial Officer, Molson Coors: Yes. Hi, So Gerald. Look, mean, we've spoken about the Midwest premium a lot. And as you rightly say, it just continues to increase and hit an all time high in October, potentially going much higher. Now we do have an extensive hedging program that operates sort of there's a blend between structured as well as where we use opportunistic depending on the markets.

We're able to hedge out multiple years. And really the objective is to smooth out the impacts of any unfavorable swings in commodities and in ForEx. But as it relates specifically to the Midwest premium, look, we do have coverage and we do follow the guardrails in our program. But as I've said before, it's a very difficult and very expensive commodity to hedge. Its pricing does not follow conventional market ebbs and flows and liquidity is limited.

And so it continues to be a headwind for us. And we do try and eliminate the volatility through hedging, but at the level that it is, there's no sort of reason for that. So we'll just continue to track it and do what we can in terms of trying to mitigate the volatility that we do see in that commodity.

Operator: Thank you. That concludes our question and answer period. You may now disconnect.

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