Molson Coors Beverage Co. has raised its sales forecast for the year off the back of a record-high second quarter amid the controversy in the US over Bud Light.

However, the Coors Light and Miller Lite owner’s underlying sales and volumes fell short of analyst predictions, resulting in a drop in share price on Tuesday (1 August).

In what was reported as the best quarter since Molson and Coors joined forces in 2005, the Chicago-based brewer has raised its net sales outlook to high single-digit growth. At the start of the year, the group forecast low single-digit growth.

The group has also now forecast 23% to 26% underlying pre-tax income growth as compared to low single-digit growth previously.

Molson Coors attributed the improved outlook as a reflection of “continued strength” in its core beer brands in the US.

CEO Gavin Hattersley told analysts in an earnings call: “Coors Light and Miller Lite, combined, were 50% bigger than Bud Light by total industry dollars and 30% bigger than Modelo Especial” in the last quarter.

The US brewer added that this time last year, Bud Light was bigger than Coors Light and Miller Lite combined.

“Beer drinkers are incredibly loyal,” Hattersley said. “We obviously have seen some pretty seismic shifts across the industry… so what really matters here for us is that more consumers are reaching for our beers versus our competitors.”

After updating its outlook, Molson Coors noted it was being “mindful of softness” for beer overall in the current inflationary environment as well as continued caution around the consumer.

Molson Coors chief financial officer Tracey Joubert also revealed in the earnings call that the beverage company will be investing an extra $100m this year towards marketing, to continue the group’s “strong momentum”.

Overall, the Coors Light owner reported that it has managed to keep up with a spike in demand since the Bud Light controversy began.

“We didn’t plan on our largest competitor’s largest brand declining volume by nearly 30% during the quarter,” Hattersley said. He added moves to streamline systems and invest in facilities since 2019 are the main reason the group has been able to meet this unexpected jump in demand following the Bud Light fiasco.

AB InBev has continued to feel the heat over its decision to partner with a transgender influencer to promote its Bud Light brand in April.

In May, the brewer’s shares experienced the worst month since Covid-19, falling 18%. The group is set to reveal the damage to its second-quarter results on Thursday (3 August).

Despite the record three-month period, the Madri brewer saw its share price drop as much as 6.4% on Tuesday after falling short of Wall Street expectations on some of its sales and volume figures.

Molson Coors’ net sales in the three months to June 30 were $3.3bn, marking a 12% increase from a year ago.

Net income of $342.4m, up 624% from last year, however, surpassed analysts’ forecasts.

For the Americas segment, the brewer’s net sales rose 10.7% in the second quarter as it shipped more premium beers. Wall Street had forecast growth of 12.2%.

Financial volumes grew by 5%, missing analysts’ expectations of 7.7%.

In a note to clients, analysts at AllianceBernstein said “there were many things to like” in the company’s second-quarter results, including positive operating leverage in the US and the defence of share gains in the country in the wake of Bud Light’s problems.

However, the investment bank said “the bar going into results was just too high and guidance disappointed”.