MONTREAL -- Molson Coors Brewing Co.'s (TPXb.TO) first-quarter profit fell partly due to lower volumes, but executives say the drop doesn't correlate to Canada's legalization of cannabis last October.
"I think at this point in time, it's really fair to say we see absolutely no correlation between the sales of cannabis and the sales of beer across the industry or for Molson Canada specifically," said Frederic Landtmeters, president and CEO of Molson Coors Canada, during a conference call with analysts Wednesday after the company released its quarterly earnings report.
Canada legalized fresh or dried bud, oil, plants and seeds on Oct. 17, while edibles are expected to be legalized later this year.
The company will continue to monitor any possible impact, he said.
"But, there's no evidence, no data that show us based on the last five months of cannabis sales...an impact there," said Landtmeters.
Molson Coors president and CEO Mark Hunter added that the company is seeing a similar picture in the U.S. where cannabis is legal in some states.
The company remains on track to launch a cannabis-infused drink once edibles are legalized in Canada, said Hunter. It formed a joint venture with Hexo Corp. (HEXO.TO) called Truss that expects to launch a portfolio of cannabis-infused beverages once edibles are legalized this autumn.
Executives said the profit drop, which is compared to a year ago when the company's results were boosted by a one-time payment, came due to lower volumes and unfavourable changes in foreign currency, as well as a shift in the timing of the Easter holiday.
That was offset by higher prices and a favourable sales mix in Europe.
The beer company, which reports in U.S. dollars, said it earned US$151.4 million or 70 cents per share for the quarter.
The result compared with a profit of $278.1 million or $1.28 per share a year earlier when the company saw a $328-million cash payment related to a price adjustment for its purchase of the Miller International brewing business.
Molson Coors said its underlying profit for the quarter totalled $112.7 million or 52 cents per share compared with an underlying profit of $104.3 million or 48 cents per share a year ago.
Net sales totalled $2.3 billion, down from $2.33 billion. On a constant currency basis, net sales increased 0.6 per cent.
Molson Coors was expected to earn 58 cents per share in adjusted profits on $2.33 billion of revenues, according to analysts polled by Thomson Reuters Eikon.