Boston, MA 06/11/2014 (wallstreetpr) – Molson Coors Brewing Company (NYSE:TAP) recent resurgence in the market has been attributed’ to improved international sales aided by cost cutting measures that continue to improve profit margins. The company’s shares have increased in value by 26% this year alone, the highest margin among other 15 global rivals. The bulk of Molson Coor’s business is in stable markets that continue to offer better growth opportunities complimented by cost cuts and improved cash flow.
Molson Coors Banking on Loyal Drinkers
Molson Coors sales in the U.K grew by 30% consequently helping in bolstering European volumes by 5.6%. Molson Coors Brewing Company (NYSE:TAP) is also enjoying good reception in Mexico and Latin America seen by the fact that sales more than doubled. The U.S net sales, on the other hand, was up by 0.1%. Improved sales comes as big brewers lost a considerable amount of share as loyal light beer drinkers opted to spend less during the recession
Improved sales, on the other hand, has been attributed to the fact that the U.S economy generated 217,000 new jobs in May with the unemployment rate dropping to 6.35% from 7.5%. The result is that many loyal drinkers are now finding it easy to engage in drinking contributing a great deal too improved sales.
Cost Cuts Bearing fruits
Cost cuts continue to bear fruits seen by improved profit margins. The company has already reduced its costs by $70 million in Europe adding an additional $102 million in savings. Molson Coors Brewing Company (NYSE:TAP) has also reduced its wage bill by 910 jobs and also closed some of its underperforming breweries. Molson Coors net cash flow from operating activities has increased to $149.7 million up from $118.4 million a year earlier.
The major concern at the moment is the fact that mass market beers are losing ground to craft brews and specialty spirits, as well as wines. Slow solid growth volume in Canada and the U.S also continues to offer one of the biggest challenges going forward.
