Molson Coors will book restructuring charges of $120 million to $180 million U.S.to cover expenses such as severance, lease exit costs and employee relocation. It will also shut its Denver office and make Chicago its North American operational base.
Prior to late July's second quarter earnings call, the company announced that CEO Mark Hunter would retire at the end of September, and Gavin Hattersley, the CEO of US business division MillerCoors, would assume the president and CEO role. "We can continue down the path we've been on for several years now, or we can make the significant and hard changes necessary to get back on the right track", Gavin Hattersley, Molson Coors president and chief executive officer said in a statement.
The company plans to spend "several hundred million dollars" to modernize its brewery in Golden, Colorado, and will invest heavily in the growing category of higher-end beer. The company employed about 18,000 workers globally at the end of a year ago, with more than half working in North America, according to its latest annual report.
Molson Coors says it will save approximately $150 million with the new structure. Molson Coors says it has been working on reducing the time it takes to bring new products to market from 18 months to as little as four months in the U.S. The company's brewery in Golden, Colorado, is the largest in the US, brewing up to 10 million barrels of beer each year. "We can continue down the path we've been on for several years now, or we can make significant and hard changes necessary to get back on the right track", CEO and president Gavin Hattersley said in a press release. "Through it, we will create a brighter future for Molson Coors", he added.
Molson Coors is dropping "Brewing" from its name to emphasize that it makes more than beer.
As it broadens product line, the maker of Coors Light and Miller Lite said starting 2020 it would be known as Molson Coors Beverage Co.
Shares of the company fell 3.4% in morning trading.
Hattersley's vision for a new Molson Coors Beverage Company became crystallized prior to today's third-quarter earnings call with investors and analysts.
That exceeded Wall Street's expectations, according to Zacks Investment Research. The company's USA depletions (sales-to-retailers) declined 3.9%, while shipments (sales-to-wholesalers) declined 6.2% for the three-month period ending September 30.
In the US, net sales during Q3 declined 2.3%, to $1.8 billion.