Coors Banquet showed strong performance with 16 consecutive quarters of share growth and over 15% distribution growth in the first half of 2025.
Core power brands Coors Light, Miller Lite, and Coors Banquet collectively held a 15.2% volume share in the U.S. for the first half of 2025, up from 13.4% three years ago.
Despite the earnings downgrade, underlying free cash flow guidance remains reaffirmed at $1.3 billion, plus or minus 10%, supported by higher cash tax benefits and favorable working capital.
EMEA and APAC regions faced softness due to geopolitical and economic tensions, but premium brands like Madri and Carling remain segment leaders.
In Canada, Molson family brands posted volume share gains despite a challenging industry backdrop, with Coors Light maintaining the #1 light beer position.
Molson Coors reported a softer-than-expected U.S. beer industry performance with industry volume down around 5% in Q2, worse than the anticipated improvement to around -3%.
Net sales revenue guidance for 2025 was reduced to a decline of 3% to 4% on a constant currency basis, down from a previous low single-digit decline expectation.
The Midwest Premium aluminum cost spiked dramatically, with prices increasing over 180% since January, causing an incremental cost impact of $40 million to $55 million for the full year.
Underlying earnings per share (EPS) guidance was lowered to a decline of 7% to 10%, compared to prior expectations of low single-digit growth.
Underlying pretax income is now expected to decline 12% to 15%, a significant downgrade from the prior low single-digit decline forecast.
Adjusted EPS increased 23% to $1.21, with Helly Hansen contributing a $0.12 loss per share versus an expected $0.28 loss.
Adjusted gross margin expanded 120 basis points to 46.4%, driven by Project Jeanius benefits, lower input costs, and Helly Hansen's contribution.
Adjusted return on invested capital exceeded 30% excluding Helly Hansen.
Adjusted SG&A expenses increased 6% to $206 million, but excluding Helly Hansen, SG&A decreased 5% due to expense management and Project Jeanius.
Helly Hansen's June revenue of $29 million exceeded the outlook of $20-$25 million, with sport and workwear segments contributing $17 million and $9 million respectively.
Inventory increased 40% to $686 million, primarily due to Helly Hansen; excluding Helly Hansen, inventory decreased 1%.
Kontoor Brands reported strong Q2 2025 results with global revenue increasing 8%, including a 4-point benefit from Helly Hansen.
Lee brand revenue declined 6% globally but showed improvement in digital sales with 9% growth in the U.S. digital channel.
Net debt was $1.3 billion with $107 million cash on hand; net leverage ratio was 2.5x on a pro forma basis.
Voluntary debt repayment of $25 million was made during the quarter.
Wrangler brand revenue grew 7% globally, with 9% growth in the U.S. driven by 16% digital growth and 8% wholesale growth.
Free cash flow was $325 million in Q2, strengthening sequentially, with expectations for acceleration in the second half and healthy full-year cash generation.
Gross margin contracted 110 basis points due to inflationary pressures but was offset by strong SG&A leverage and disciplined expense management, resulting in steady operating margins and double-digit EPS growth.
International segment net sales increased 6%, driven by pricing and volume mix, with operating income growth of 2.6% despite a challenging macro environment.
Keurig Dr Pepper delivered strong second quarter results with net sales increasing 7%, driven by price and volume mix across U.S. refreshment beverages, International, and sequential progress in coffee.
Leverage remains comfortable at 3.3x with a long-term goal of 2.5x or lower.
U.S. coffee net sales declined modestly by 0.2% but showed sequential improvement with net price realization strengthening to 3.6%, despite volume mix decline of 3.8%.
U.S. refreshment beverages net sales grew almost 11%, led by core strength and rapid expansion in white spaces like energy and sports hydration.
Active Lifestyle segment revenue declined $36 million to $214 million, driven by Jack Wolfskin sale and soft market conditions, but operating income increased by $6 million due to cost savings and the sale.
Consolidated revenues for Q2 2025 were $1.11 billion, a 4% year-over-year decrease primarily due to the sale of Jack Wolfskin and softness in the Active Lifestyle segment.
Excluding Jack Wolfskin, sales declined approximately 2%, mainly due to a 6% decline in Topgolf same venue sales.
Golf Equipment segment revenue was flat year-over-year at $412 million, with operating income down 1%, but year-to-date operating margins improved over 200 basis points.
Inventory decreased by $38 million to $609 million, mainly due to Jack Wolfskin sale offsetting increases in Golf Equipment and Topgolf inventories.
Liquidity improved with cash increasing by $378 million to $1.16 billion, driven by proceeds from Jack Wolfskin sale and lease financing; net debt decreased to $2.39 billion.
Q2 adjusted EBITDA was $196 million, down 5% year-over-year, impacted by tariffs and foreign currency hedge losses but partially offset by cost savings and margin initiatives.
Topgolf revenue decreased 2% year-over-year with same venue sales down 6%, but adjusted EBITDA increased $1 million to $111 million, reflecting flat EBITDAR margins.
Adjusted diluted earnings per share increased 8.3% to $1.44 in the second quarter and increased by 7.2% for the first half, driven by robust adjusted OCI growth and the benefit of share repurchases over the past year.
Adjusted equity earnings from ABI were $130 million in the second quarter, down 10.3% due to a lower ownership interest following a partial sale.
Adjusted OCI margins expanded to 64.5% for the second quarter and the first half, supported by strong net price realization of 10% for the quarter and 10.4% for the first half.
Cigars shipment volume increased 3.7%, with Middleton outperforming in the large mass cigar industry.
Industry-level domestic cigarette volumes declined by 8.5% in the second quarter and first half when adjusted for trade inventory movements and calendar differences.
In the smokeable products segment, adjusted operating companies income grew by 4.2% to $2.9 billion in the second quarter and by 3.5% to $5.5 billion in the first half.
Oral tobacco products segment adjusted OCI grew by 10.9% in the second quarter and 5.5% in the first half, with margins increasing by 3.1 and 1.4 percentage points respectively.
Oral tobacco segment retail share was 33.1% for the second quarter and 33.9% for the first half, with on! brand driving growth despite declines in moist smokeless tobacco (MST) volumes.
Total oral tobacco segment shipment volume decreased 1% in the second quarter and 2.9% in the first half; adjusted volume declines were approximately 4% and 2.5%, respectively.
Total smokeable products segment reported domestic cigarette volumes declined by 10.2% in the second quarter and 11.9% for the first half; adjusted declines were 10.5% and 11%, respectively.
Adjusted EBITDA declined to $15.3 million from $20.1 million, reflecting lower margins and higher noncash expenses related to self-insurance.
Bombshells segment revenues declined due to divestitures and same-store sales decline but returned to profitability with an operating income of $87,000 versus a loss of $8.9 million last year.
Free cash flow remained stable at $13.3 million, with a sequential increase in free cash flow margin to 19% of revenues.
GAAP EPS was $0.46 compared to a loss of $0.56 per share last year; non-GAAP EPS was $0.77 versus $1.35 year-over-year.
Net income attributable to common shareholders was $4.1 million, a significant improvement from a loss of $5.2 million in the prior year quarter.
Nightclub revenues were nearly flat with a slight decline in same-store sales offset by acquisitions; operating income increased to $17.8 million with a margin of 28.5%.
Total revenues for Q3 2025 were $71.1 million, down from $76.2 million year-over-year, primarily due to the sale and divestiture of underperforming Bombshells locations.
Dafinchi
