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Molson Coors reported quarterly results on Thursday.

Steven Senne/The Associated Press

Molson Coors Beverage Co. shares fell more than 10 per cent after the beer maker said it expects a challenging second quarter due to the COVID-19 pandemic.

The company’s shares fell $7.25, or 10.62 per cent, to $61.00 on the Toronto Stock Exchange on Thursday afternoon. Molson shares on the New York Stock Exchange dropped US$5.59, or 12.11 per cent, to US$40.58 in mid-day trading.

“It’s safe to say that the first quarter of 2020 was unlike any other in our company’s long history,” chief executive Gavin Hattersley told a conference call with analysts after the company released its latest financial results.

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He noted two significant events that occurred as the company came out of a restructuring: a deadly shooting at its Milwaukee brewery in February and the coronavirus.

“In a few short months, the landscape for businesses has changed, not only for our industry, but for all of industry.”

The company is no longer measuring its progress against the five components of its revitalization plan, but rather two new metrics that involve protecting employees and mitigating short-term impacts, and positioning the business to succeed in what the new normal looks like after the pandemic subsides.

“The coronavirus has had and will have a material impact on our business,” Hattersley said.

The company, which reports its results in U.S. dollars, saw a first-quarter loss of US$117.0 million or 54 cents per share for the quarter ended March 31 compared with a profit of US$151.4 million or 70 cents per share a year ago.

Net sales for the quarter ended March 31 totalled US$2.10 billion, down from US$2.30 billion.

Molson Coors reported an underlying profit of US$77 million or 35 cents per share for the quarter compared with a profit of US$112.7 million or 52 cents per share in the first three months of 2019. The company outperformed analyst expectations of US$76.07 million or 33 cents on this metric, according to financial markets data firm Refinitiv.

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The company, which recently withdrew its 2020 financial guidance due to COVID-19 related uncertainty, expects a significant drop in sales and profits in the second quarter and possibly beyond as a result of the closure of bars and restaurants due to the pandemic.

It estimated about 23 per cent of its 2019 consolidated net sales resulted from what it called on-premises consumption, which has effectively been reduced to zero.

In the latter half of March, the company experienced a surge in off-premise sales or those at retailers as consumers stocked their pantries, the CEO said, but that trend did not continue into April.

The brewer noted that while sales to retailers continue to do well, it does not expect them to fully offset the loss of the bar and restaurant sales.

Molson has taken several steps “to protect our balance sheet and put ourselves in the best position to weather the storm,” said Hattersley.

That includes reducing its capital expenditures for the year by about $200 million, as well as limiting new hiring and furloughing some employees.

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