Molson Coors Beverage Co. (NYSE: TAP) shares were trading lower in Thursday's premarket session after the brewer cut its 2026 outlook, as third-quarter earnings narrowly topped estimates and sales came in slightly below expectations.

The company lowered its outlook citing softness in the global beer industry, shifting consumer behavior and higher-than-anticipated inflationary costs.

Adjusted diluted earnings declined 12.6% to $1.46 per share, but narrowly exceeded the analyst estimate of $1.45.

The brewer reported net sales of $2.926 billion, down 1.6% from a year earlier, or 1.2% on a constant-currency basis, slightly below the analyst consensus estimate of $2.940 billion.

President and CEO Rahul Goyal said the company's Horizon 2030 transformation is focused on strengthening market share trends, accelerating portfolio transformation, simplifying its cost structure and returning cash to shareholders.

However, he acknowledged that these initiatives have not yet delivered benefits at sufficient scale to offset third-quarter headwinds.

Volume Decline and Cost Pressure Persist

Net sales decreased 1.6%, driven by lower financial volume and unfavorable foreign currency impacts, partially offset by favorable price and sales mix.

Financial volume decreased 3% to 18.809 million hectoliters, while brand volume fell 4.9% to 19.376 million hectoliters. Lower shipment volumes were partly offset by net pricing in the Americas and favorable global sales mix.

Price and sales mix favorably impacted net sales by 1.8%, primarily due to increased net pricing in the Americas segment and favorable sales mix as a result of premiumization in the EMEA and Asia-Pacific segment.

Underlying cost of goods sold per hectoliter rose 8.1%, due to a 640-basis-point cost inflation impact, including $30 million of unfavorable Midwest Premium pricing, as well as volume deleverage and unfavorable mix driven by premiumization.

CFO Tracey Joubert said intensifying external headwinds weighed on results and are expected to persist in the near term.

Regional Performance

Americas net sales declined 1% in constant currency to $2.233 billion. Underlying pretax income fell 18.8% to $313.7 million in constant currency.

Financial volume in the Americas dropped 2.9% and brand volume decreased 5.3%, reflecting weaker U.S. core and value brand performance as well as industry softness, partially offset by shipment timing and increased net pricing.

EMEA and Asia-Pacific net sales fell 2.7% in constant currency to $701.4 million. Underlying pretax income increased 5.5% to $91.8 million in constant currency.

Financial volume and brand volume decreased 3.0% and 3.8%, respectively, primarily due to lower volume in the U.K., driven by soft market demand and a heightened competitive landscape, including increased promotional activity, partly offset by favorable sales mix from premiumization.

Cash Flow and Capital Return

Year-to-date, operating cash flow rose to $1.28 billion and underlying free cash flow increased to $852 million.

Cash was $602.2 million, total debt was $5.996 billion and net debt was $5.394 billion, producing a 2.53-times net debt-to-underlying EBITDA ratio, up from 2.28 times a year earlier.

Year-to-date capital expenditures were $381 million. Molson Coors repurchased about 5.5 million shares for $254.9 million and paid $273.1 million in dividends.

The company targets $450 million of cost savings from 2026 through 2028. Monaco Cocktails is expected to be incrementally profitable in 2026.

2026 Outlook Lowered

Management cited challenging global beer industry conditions, shifting consumer behavior, persistent promotional activity in the U.K. and higher-than-anticipated logistics costs as key factors behind the downward revisions.

Molson Coors lowered its full-year adjusted earnings forecast to $4.39-$4.55 per share from $4.61-$4.82. Analysts expect $4.71 per share.

The company also lowered its constant-currency sales growth guidance to a decline of 1% to 2%, implying a range of $10.918 billion to $11.029 billion, below the $11.049 billion estimate.

The company lowered underlying free cash flow guidance to $1.0 billion, plus or minus 10%.

Management expects softer global beer industry volume trends to persist in the fourth quarter.

Commodity and logistics costs are also expected to remain elevated, with full-year Midwest Premium costs to exceed $130 million.

TAP Stock Price Activity: Molson Coors Beverage shares are trading lower by 3.01% at $41.84 during premarket trading on Thursday, according to market data.