Molson Coors Beverage Company (NYSE:TAP) Q4 2022 Earnings Call Transcript

Gavin Hattersley: Okay. Drew, a lot going on there. Let me make sure I can catch all that. Let’s just stand back and look at what we did from a pricing environment or pricing point of view in 2022. We took a reasonably strong price increase in the spring of last year, and we took another strong price increase in the fall. In fact, it was at the higher end of the guidance that we put out there from a pricing point of view. The price elasticities that we saw in the spring GI were actually well below historical levels. I mean, it was still elasticity, but they were less than what we’d expected. And since our four price increases, which is really a couple of months of data, that is it has elevated a bit, but it’s still below historical levels.

So, it’s only been a couple of months. We continue to keep a close eye on how consumers are reacting. The price promotion environment hasn’t elevated as I said in my remarks. And from a pricing point of view this year, well, we put large price increases, as you know, most of the country in the fall, but there were some markets where we didn’t take price in the fall. And so, in the spring of this year, you’ll see a few price increases there. It will be fairly localized, so not a broad sway. And I think as we look out to the balance of the year, I would expect our price increases in the fall to be closer to where they’ve been from a historical point of view. So, 1% to 2%. I think your other question was around volume and how we’re feeling about that.

Well, obviously, the fourth quarter volume was down. From a consumer spend point of view, just like every other consumer goods company, we did see changed behavior from a consumer point of view. So that impacted our fourth quarter retail sales or brand volumes. There was also one less trading day in the fourth quarter, which we don’t adjust for in the reported results. So, that had a meaningful impact. And there was a little bit of pull forward from Q3 into — from Q4 into Q3 is ahead of that big price increase. Year-to-date this year, I’m not going to give you a an absolute number because obviously, we’re not that far into the year, but I would tell you that our trading performance has improved from a volume perspective as we’ve gone through, which is not terribly dissimilar behavior than we saw after the spring price increase, where we saw some muted volume after that, and we saw muted volume after the fall increase and bouncing back.

So, that’s — that kind of summarizes for you. And I hope I captured all your questions.

Operator: Our next question comes from Kevin Grundy of Jefferies.