Molson Coors aims to secure market share growth as consumers move away from Bud Light.

• The parent company of Coors Light and Miller Lite reported a quarterly earnings beat, returning to profit and increasing its market share.
• In the fourth quarter, Molson Coors increased its marketing and administrative expenses by almost 19% in order to sustain those gains.
• Gavin Hattersley, CEO, stated his confidence that the changes in the U.S. beer industry are "permanent."

On Tuesday, Brewer stated that it anticipates preserving its market share growth in the upcoming year.

The company, which produces Coors Light and Miller Lite, reported strong fourth-quarter earnings Tuesday as net sales for 2023 grew 9.3%. The revenue gains were largely due to consumers switching away from Bud Light products after boycotts started in April.

The company stated in its earnings release that it was well-positioned to benefit from shifts in consumer purchasing habits, though it did not mention boycotts directly.

Molson Coors experienced a net income of $103.3 million, or 48 cents a share, in the latest quarter, marking a significant improvement from the $590.5 million loss, or $2.73 a share, recorded in the same period the previous year.

According to LSEG, formerly known as Refinitiv, Molson's underlying earnings were $1.19 per share, which exceeded the $1.12 per share analysts were anticipating.

Gavin Hattersley, CEO, expressed his trust in the company's plan to retain its dominance in the beer market during the fourth-quarter earnings call.

"For the past nine months, our core brands have consistently shown growth, with expansion occurring in every region, channel, and major customer in the United States. Based on this, we believe that the changes in the U.S. beer industry are permanent," Hattersley stated.

In the fourth quarter, Molson invested a substantial amount of capital and spent approximately 19% more on marketing and administrative expenses to achieve those gains.

For the second year in a row, the average cost of a 30-second ad spot during Sunday's Super Bowl game was $7 million, with Coors Light featuring LL Cool J in their commercial.

Greg Tierney, vice president of financial planning and analysis and investor relations, stated on the company's earnings call that they invested heavily in their brands, increasing marketing spend by over $50 million in the quarter. Their objective was to retain existing drinkers and attract new ones.

Despite the rosy outlook, some analysts on the earnings call questioned the sustainability of Molson's gains from the Bud Light boycott. Meanwhile, others believe that Hattersley's strategy will benefit investors.

Robert Moskow, TD Cowen analyst, stated in a note to investors that the company intends to retain the majority of the shares acquired from the Bud Light boycotts.

Molson Coors has been a target of Ariel Investments' investment since 2018, and the firm continues to believe in the stock's potential.