Prepared remarks
Good morning, and welcome to the Molson Coors Beverage Company Second Quarter Fiscal Year 2026 Earnings Conference Call. Now I'll turn over to Barbara Noverini, Vice President of Investor Relations.
Thank you, operator. I'm pleased to introduce myself as Molson Coors' new Vice President of Investor Relations. Our earnings release and presentation materials are available on the Investor Relations section of our website. Today's discussion includes forward-looking statements within the meaning of U.S. federal securities laws. Please refer to our earnings release and our most recent SEC filings for important information regarding these statements, including risk factors as well as definitions of and reconciliations to any non-GAAP measures. Actual results may differ materially from our expectations, and we undertake no obligation to update forward-looking statements, except as required by applicable laws. Today, we'll focus our prepared remarks on our performance and outlook before opening the line for Q&A. Operator instructions: any technical questions can be addressed with our Investor Relations team following the call. Unless otherwise indicated, all financial results are comparable to the prior year period and are in U.S. dollars. With the exception of earnings per share, all financial metrics are in constant currency when referencing percentage changes from the prior year period. Also, share data references are sourced from Circana in the U.S. unless otherwise indicated. Our remarks today will also reference underlying pretax income, which equates to underlying income before income taxes and underlying earnings per share, which equates to underlying diluted earnings per share as defined in our earnings release. With that, I will hand it over to Rahul.
Thank you, Barb. Welcome to Molson Coors, and hello to everyone on the call. Today, we're joining you from Golden, Colorado, the home of Coors. Since the launch of our Horizon 2030 strategy in Q1, I've been visiting with employees, distributors and customers across our footprint to discuss our strategy, our early progress and any gaps that require quick action. Before I begin, let me take a moment to thank our dedicated employees here in Golden and across the globe for their commitment behind our Horizon 2030 strategy. Now let's start with the category. While the U.S. beer industry began the year on relatively solid footing, the unanticipated energy and inflation shock associated with the conflict in Iran demonstrated how quickly global consumer sentiment and behavior can shift. In the second quarter, prices at the gas pump peaked in May, hitting certain U.S. regions especially hard. At the same time, geopolitical uncertainty weighed on consumer confidence and spending behavior in EMEA and APAC. These external factors contributed to our volume performance across our markets in the second quarter. In addition, in EMEA and APAC, heightened promotional activity as well as channel mix further pressured bottom line results. In Q2, the industry came together to champion the World Cup as a premier occasion for socialization and celebrating with beer. That said, high industry anticipation increased competitive pressure everywhere. We also saw pockets of intense promotional activity in the U.K. and across Europe. As such, our share of the early World Cup opportunity, which only included the last three weeks of Q2, varied by geography and segment. How we respond to these and other external pressures remain firmly within our control. I'm confident that our diversified portfolio of well-loved brands, strong cash generation and disciplined balance sheet provides resilience and flexibility. These advantages enable us to address dynamic external conditions while focusing on the long-term strategic priorities that will grow our business. Based on this, we are reaffirming our fiscal 2026 guidance. Now let's discuss our portfolio, starting with our core brands. Horizon 2030 aims to reinforce the relevance of these brands as the first choice for consumer occasions. We're not just sitting back and relying on existing scale and brand awareness to drive volumes. Enhancing our core brand share performance in today's competitive environment requires continued focus and execution. However, we have more work to do here, and we continue to assess how Coors Light and Miller Lite can amplify their authentic identities to drive greater impact with both core beer and new consumers in the U.S. This work takes time, and we are pursuing new campaigns, partnerships and ways to deploy our media investments with an occasion-based approach. In Canada, Coors Light largely performed in line with the industry and held its spot as Canada's number one light beer. In the U.K., Carling experienced heightened competition in the quarter, and we've acted quickly with several actions designed to strengthen its position in the market. In EMEA and APAC, Ožujsko maintained its leading position in Croatia following its sponsorship of the Croatian Men's National Team in the World Cup. Meanwhile, Coors Banquet grew share and brand volume in Q2. We attribute the brand's ongoing success to its clear identity and consistent marketing. This includes our campaign for America's 250th called Icons of the American West, which helped contribute to growth across all U.S. regions in Q2, and it includes our latest partnership with the Yellowstone spin-off, Dutton Ranch, which has also become very popular. Turning to our Value brands. Our share trends improved, driven by the successful launch of Keystone Light Apple. We also saw share trends improve for Miller High Life. We've chosen to support growth in our Value brands by deploying modest but targeted levels of investment. Keystone Light Apple, or Kapple, is a great example of how we quickly responded to emerging flavor trends. We deployed an AI-generated social media campaign that generated buzz and resonated with consumers seeking flavor at an enticing price point. Demand far outpaced our limited-run production, so we are bringing it back in the fall. We also decided to bring back fan favorite Keystone Ice, a high ABV beer in the Value segment. In Above Premium beer, we saw mixed performance across our brands and geographies. In the U.S., we were pleased to see Peroni grow brand volumes by double digits, supported by targeted marketing investments earlier in the year. But the broader Blue Moon franchise remained under pressure in Q2. That said, we grew brand volumes for both Blue Moon non-alcoholic and Peroni 0.0% in the quarter, underscoring our relevance in the small but growing non-alc beer category. While heightened promotional activity impacted Madri in the second quarter, Above Premium brand volumes showed segment growth in EMEA and APAC, driven by Staropramen, Miller and Blue Moon. In Canada, Miller Lite also continued its momentum as an Above Premium offering. We continue to gain scale in beyond beer, which is an important part of our journey as a beverage company. NSR growth for Monaco, Topo Chico Hard and Fever-Tree was partially offset by other brands in the segment like Simply Spiked. In Canada, Coors Slushie continued to show momentum in the RTD Seltzer segment, while in EMEA and APAC, Hidra continued to benefit from growing interest in functional beverages. Both Fever-Tree and Monaco are well on track to each contribute one to two percent to NSR, solid proof points of Horizon 2030's focus on both premiumization and portfolio transformation. We have now lapped the first full year of our partnership with Fever-Tree, and we are encouraged to see momentum continue to build. Following a national campaign that celebrated the ease of mixology at home, Fever-Tree delivered its highest quarter of sales in the U.S. since our partnership began. Our first full quarter of ownership of Atomic Brands also produced encouraging results. The integration of Monaco Cocktails has been going well, with its overall top and bottom line contributions tracking slightly ahead of our acquisition expectations. While still early days, this progress underscores the importance of bringing RTD spirits into our portfolio. We see Monaco as a clear example of how we can use M&A as a force multiplier in our transformation journey. This acquisition filled white spaces in our portfolio with a fast-growing beverage segment. It also added an already scaled business, providing both growth and profitability on day one. Currently, the majority of Monaco sales fall within five states, and most of that is in convenience. This is a strong example of our localized portfolio approach in action, and we see plenty of runway to expand into new geographies and channels. As discussed in Q1, the launch of Horizon 2030 also incorporated changes to our operating model, including quick actions and resource allocation at the local level. For example, in preparation for the World Cup, we invested incremental resources into host markets to drive memorable on-premise experiences. Our partnership with venues in key entertainment districts across Dallas, Philadelphia and Kansas City resulted in strong consumer engagement with our core and Above Premium brands. In addition, after reports that Scottish football fans caused beer shortages in Boston, our Restock the Scots campaign swiftly responded by sending a Miller Lite barge to greet them in Miami. These examples show how we're leaning into and learning from targeted efforts that drive incremental results outside of national media spend. In total, while we're encouraged by our ability to make progress from a top line perspective, we need to stay responsive to the inflationary cost pressures and commodity price volatility that impacted our bottom line. In the near term, our robust cost savings program and other efficiency initiatives mitigate uncertainty within the global macroeconomic backdrop. We made progress in our previously announced three-year $450 million cost savings actions by identifying areas where we believe we can drive greater efficiency. For example, we committed to various restructuring actions in EMEA and APAC, including the closure of a small brewery in the U.K. alongside other operational changes designed to modernize, simplify and unlock efficiencies within the region. We've also allocated a portion of our previously announced $650 million in global CapEx to modernize and expand our supply chain capabilities. Upgrades are already underway at our can plant, Rocky Mountain Metal Company. We're investing in new bulk receiving facilities as well as new and upgraded canning lines. Importantly, we believe investments like these that help to strengthen our supply chain will create efficiencies during a time when aluminum sourcing is top of mind. Finally, on capital allocation. We designed our approach to reinvest in our business and reward shareholders as we progress towards Horizon 2030 together. We are a highly cash-generative business, and we intend to deploy that cash on prudent growth initiatives, both organic and inorganic. We continue to believe that Molson Coors shares currently trade at a compelling value with an attractive dividend yield, and we have ample capacity left on our share repurchase authorization. We're halfway into our first year of the Horizon 2030 strategy. One thing I'd emphasize is that no single event will suddenly change our trajectory. This process is about building portfolio strength brick by brick. We already have two of the strongest beer franchises in the industry with Miller and Coors. These brands have scale, generate cash and harbor deep consumer loyalty. Our job is to keep them relevant and competitive. That means showing up with strong investment during key beer occasions while working diligently and creatively to find new unexpected moments these brands can truly own. At the same time, we're scaling our next layer of expected growth. We're celebrating success in our core with Banquet, in Above Premium with Peroni, in Value with High Life and in beyond beer with Topo Chico, Monaco and Fever-Tree. None of these opportunities individually change our future. We know that. However, in aggregate, we expect these wins to compound over time. To that end, we're making early progress. With that, I'll turn it over to Tracey to discuss our financial performance and outlook.
Thank you, Rahul. In the second quarter, our results reflected the challenging category and cost environment we anticipated while also demonstrating the flexibility of our business model and the actions we are taking to manage through volatility. On a constant currency basis, consolidated net sales revenue was down 3.6%. Underlying pretax income was down 27.8% and underlying earnings per share decreased 22.9%. On an underlying basis, the quarter was shaped by a combination of external headwinds, timing impacts and controllable actions. While some drivers were impacted by phasing considerations, the broader picture is largely consistent with our expectations. The industry remains pressured. Our share performance is not yet where we wanted to be and cost inflation remains significant. At the same time, pricing, mix, cost savings, portfolio actions and disciplined capital allocation continue to support our plan. The U.S. beer industry was down 4.2% based on our internal estimates. U.S. domestic shipments declined by 7.3%, in line with our expectations of a 6% to 9% reduction in the second quarter. EMEA and APAC brand volume declined 3.4%, primarily driven by ongoing soft market demand and a heightened competitive landscape. Midwest Premium remained elevated, adding approximately $40 million of year-on-year cost increase to second quarter cost of goods sold. Additionally, the elevation of fuel prices and freight market tightening increased cost inflation in the second quarter. MG&A was up 3.2%, largely due to cycling lower employee incentive costs in the prior year and additional investments in technology and capabilities. Taken together, these factors help explain the pressure on the quarter, but they do not change our priorities. We are focused on improving commercial execution where we have the greatest opportunity to influence share, protecting price realization and using our cost savings program to help offset inflationary pressure. Turning to the balance sheet. We believe this remains an area of strength and flexibility for the company. In the quarter, we successfully executed a series of public and private placement offerings that allowed us to refinance and retire a portion of our debt. These transactions enabled us to extend maturities and optimize our balance sheet at attractive rates in a rising interest rate environment, resulting in a net debt to underlying EBITDA ratio of 2.53x at the end of the quarter, bringing us close to meeting our stated goal of under 2.5x by year-end. As Rahul mentioned earlier, we remain committed to a balanced capital allocation framework with a relative emphasis on reinvestment, M&A, returning cash to shareholders and debt reduction varying quarter-to-quarter based on available opportunities and strategic priorities. This quarter, we chose to deploy capital in support of financial flexibility and M&A with the Atomic Brands acquisition, uses of cash that we believe strengthen the portfolio over the long run while preserving flexibility to continue investing behind our core priorities. We also paid $90 million in dividends and repurchased 1 million shares for $42 million, making further progress on our share repurchase authorization. We have repurchased 15.3% of our Class B shares outstanding since the plan was announced in October 2023. We continue to believe that Molson Coors shares trade at a compelling value and have $2.35 billion of our share repurchase authorization remaining. With that, let's discuss our outlook. As Rahul mentioned, we are reaffirming our 2026 guidance. We are doing so with a clear understanding of both the risks and the levers available to us in the second half. Before we discuss the details of our near-term outlook, I'll remind you that the impacts of the global macroeconomic environment are multifaceted and difficult to predict. While we had included in our guidance our best estimate of some of these factors, external drivers may significantly impact our actual results, either up or down. Starting with the top line. U.S. shipments were in line with our expectations for quarterly volatility year-to-date, with relatively weaker shipments in Q2 following the stronger start to the year. The important point is that the shipment variance is primarily a timing and alignment issue rather than a change in our strategic direction. Our guidance assumes the shipment trends will slightly outpace brand volume trends in the second half of the year. Our full year guidance also includes nine months of NSR and profit contribution from the integration of the Monaco portfolio. All other top line drivers remain largely unchanged. Our guidance includes the assumption that full year 2026 U.S. industry volume trends will be better than the minus 5% we experienced in 2025. In Q1, our internal estimates indicated that the industry improved to down 1.6%. At that time, we acknowledged that economic and geopolitical uncertainty made predicting future quarters very difficult. The industry slowed in Q2 to down 4.2% based on our internal estimates, but this is still ahead of 2025 full year performance. Barring any further escalation of geopolitical events, our guidance still assumes industry improvement over 2025 levels. That said, we are not satisfied with our share performance. We continue to anticipate making progress as we improve execution in the channel, occasions and consumer segments where we believe we can have the greatest near-term impact. We continue to expect an annual price increase of one to two percent in the U.S., in line with Q2 performance as well as the average historical range and expect mix benefits from premiumization in both business units. Moving down the P&L, we expect COGS to continue to be negatively impacted by rising commodity costs through the second half of 2026. On Midwest Premium, we continue to expect elevated costs relative to 2025. As a reminder, we had anticipated the largest year-over-year increase in Midwest Premium to hit the P&L in Q2 2026. For the balance of the year, we expect Midwest Premium to continue to be meaningfully inflationary, but expect that our hedge coverage will mitigate a portion of this ongoing headwind. For the full year, we expect Midwest Premium inflation to be in excess of $130 million. We also expect elevated fuel costs relative to 2025, with tighter freight supply causing additional volatility in transportation costs. These are meaningful pressures, and we are not minimizing them. However, our hedging strategy, productivity initiatives and disciplined spending should provide partial offsets as we manage through the year. We now expect a reduction in MG&A expenses in the second half of the year compared to the prior year period. The objective is not simply to spend less, but to carefully manage expenses by redirecting investments towards the opportunities that we expect will improve performance and generate the most effective and highest returns. Our three-year $450 million cost savings program provides an important lever to reduce reliance on industry recovery as we navigate category and macroeconomic volatility. We are also evaluating additional commercial and operational actions to address the headwinds facing the EMEA and APAC segments. In closing, we are realistic about the category and cost pressures we face, and we are not satisfied with every aspect of our current performance. At the same time, we believe we have meaningful strength, a strong global brand portfolio, a healthy balance sheet, strong cash generation, disciplined capital allocation and a cost savings program that gives us flexibility. We are focused on the levers within our control, sharper commercial execution, disciplined revenue management, more effective marketing investments, continued productivity and portfolio strengthening, as we manage near-term volatility and stay focused on long-term growth. With that, we will take your questions.
Questions and answers
Operator instructions: our first question comes from Bonnie Herzog from Goldman Sachs. Unfortunately, we can't gain connection with Bonnie. Our next question comes from Filippo Falorni from Citi.
I was hoping you could give a little bit more color on the category growth expectations, including the benefit from the World Cup in June and July. And then any additional comment on the market share performance that you're expecting going forward in the balance of the year?
Filippo, thank you for the question. I'll address a couple of things. If you think about Q2, Tracey talked about the category based on internal estimates, so it was in the minus 4.2% range. The World Cup was a great occasion for beer and an opportunity for us to showcase our brands and bring people together, but it probably did not have a big impact across the entire category. For on- and off-premise, we saw strong results in host cities and particularly on-premise. On-premise performed better than off-premise overall, but we did not see a massive nationwide impact. In those host cities, on-premise was a great opportunity to showcase our brands and drive performance. Regarding the category for 2026 versus 2025, we still believe the category will be healthier than 2025. It will continue to be volatile. You saw changes in Q1 versus Q2 driven by macro factors and fuel prices. We'll keep close to the category in Q3 and Q4. Importantly, we can influence outcomes through our portfolio. We have a broad set of brands across different price points, which gives me confidence going into the next quarter that we can make progress. If you look at Q2 versus Q1, we modestly gained share. Across different parts of our portfolio, we made progress in Value, core Coors trademark, Above Premium beer and beyond beer. We want to continue making that progress in Q3, but category volatility will depend on how external factors evolve. Overall, we believe it will still be better than 2025.
Our next question comes from Peter Grom from UBS.
I actually wanted to ask a follow-up to Filippo's question just on the category. You noted the weaker performance in Q2, and this may be hard to do, but is there a way to parse out the impact from higher gas prices, maybe some unfavorable weather versus shifts that may be more structural? People were hoping the category would be stronger in Q2, but you saw a meaningful deceleration. Underpinning the back half, you expect the year to be better than 2025. Should we be expecting a continuation of what we saw in Q2 from a category standpoint?
Peter, thank you. Parsing out the impact of higher gas prices and other variables is tricky because consumer behavior shifts as those variables change. Coming into this year, consumer confidence improved and the category was healthier than Q1. In Q2, we saw different consumer behavior when gas prices rose and other macro factors evolved. We saw that in pack data and channel data—there was a pullback. Looking at channel-specific data, convenience and dollar channels continued to do well in Q2 versus food and grocery. Singles and small packs performed well relative to larger packs, indicating consumers were making different choices with their expendable income. On the other hand, consumers who are trading up continued to drive premiumization, supporting Above Premium brands like Peroni and Fever-Tree. On-premise performed better than off-premise overall for the category, which is a positive sign for consumer health. Macro impacts such as oil prices and sentiment will remain important as we think through H2, Q3 and Q4, but our broad portfolio across price points gives us flexibility to lean in—whether that's Value with pricing, Core with price pack architecture, or Above Premium and beyond beer. The category will remain volatile but likely better than 2025, and we have different tools and brands to continue executing and improving share.
Our next question comes from Robert Ottenstein from Evercore.
Great. I missed the first part of the call, so excuse me if you already addressed this.
Apologies, Robert, we lost connection. We'll now move on to our next question from Chris Carey from Wells Fargo.
Hopefully, you don't lose connection with me. I wanted to ask about the evolution of the inflation expectations. I think I heard, Tracey, you say $150 million, the slide says $130 million for a Midwest Premium impact. Conceptually, is inflation now expected to run higher for the full year than prior expectation? How did that impact your outlook for COGS per hectoliter? Similarly, you're expecting perhaps a slight decline in MG&A on the full year—confirm if that's correct and where that savings comes from relative to prior expectation. Importantly, how should we think about the path into 2027 and your ability to hedge some of the cost increases going into next year? You mentioned pricing in the fall. How do you think about getting ahead of the cost curve into 2027?
Chris, thank you. We laid out guidance for '26 knowing we were stepping into the year with an elevated cost base for Midwest Premium, LME and other inflationary impacts. For H1, teams managed within the framework we had shared, focusing on cost management and our savings program. We did see elevated fuel and logistics costs where transportation has become more challenging. For the balance of the year, our COGS per hectoliter is generally in line with our guidance; it's a combination of elevated and volatile inputs but managed against the levers we have. On MG&A, factors include investments in tools and technology capabilities, the cost savings programs announced last year in the Americas and earlier this year in EMEA and APAC, and ensuring the right level of brand support. Those actions will play out in the balance of the year and reflect disciplined cost management while investing behind high-return opportunities. We are thinking about 2027 as we execute 2026, particularly about what the inflationary landscape may look like and ensuring we have the right brand investment and support. We'll provide more as we progress, but that's our current posture on COGS and MG&A.
Chris, in terms of the Midwest Premium impact, our initial guidance assumed the impact would be at least $125 million. Our latest estimate now is above $130 million. Midwest Premium has not come down; commodity costs are rising. The Midwest Premium impact for Q2 for us was $40 million. We do have hedges on Midwest Premium that will help mitigate some increases, but the market is difficult, expensive and not very liquid or transparent. We're also using our cost savings program to help mitigate inflation. We have good line of sight to the balance of the year, but continue to see elevated commodity costs, particularly Midwest Premium.
Our next question comes from Kaumil Gajrawala from Jefferies.
A couple of questions. We hear about buybacks, dividend, balance sheet, cost cutting, which support the stock, but there's an essential volume area to focus on. Do you feel that's sufficient? Is now the right time to be cutting costs or buying back shares instead of stepping up investment behind brands like Peroni or Coors Banquet or making brands more relevant where some are not? Should you be investing more meaningfully behind the brands that are working?
Kaumil, thank you. We're absolutely focused on the top line. Our plan is grounded in making sure brands drive our future. We are supporting our big brands—Coors Light, Miller Lite, Banquet—with appropriate marketing investment. We've shown up for big live sports this year, including the World Cup, and will continue to invest behind NFL, college sports, MLB, soccer and music. The Value portfolio is important; consumers seek brands at different price points and Q2 showed a step change from Q1. We invested specifically with Keystone Light Apple and innovations around Miller High Life and packaging. Above Premium is another area where we're leaning into Peroni while addressing work needed in Blue Moon. Using the balance sheet for beyond beer is a priority—Monaco is an example. We will continue to evaluate M&A and organic opportunities that add scale and meaningful contribution. At the same time, we remain disciplined in a highly inflationary landscape, driving cost savings and using the balance sheet carefully to support dividend and buybacks. Our priority remains investing in the business first.
Kaumil, I'll add that we are a highly cash-generative business. When we look at capital allocation priorities, because of our cash generation, we are able to invest across M&A, capabilities and brand support while also executing buybacks when appropriate. Quarter-to-quarter, allocation priorities may differ. In Q2, we invested in M&A with the Monaco acquisition and preserved balance sheet flexibility while paying down some debt. We have optionality in how we use cash and can invest across our priorities.
Our next question comes from Drew Levine from JPMorgan.
Rahul, you said the beer industry is volatile sequentially and you expect the year to be better than 2025. Have your internal expectations for the industry changed given Q2 and early July? Also, how are you thinking about market share performance? You said you weren't happy with it. There was expectation it would improve relative to Q1, which it did in Q2; how are you thinking about the timeline for interventions to improve market share?
Drew, thanks. On the category, our view is broadly in line with what I said—we expected volatility and still expect the year to be better than 2025. How volatility plays out is something we'll monitor and react to. On market share, it is a major internal focus. We did have modest improvement in Q2 versus Q1 across Value and select Core positions, but not as much as we'd like. We will continue to invest in commercial programs—retail actions such as shelf space, placements, displays and features; pricing competitiveness; and strong brand support. We'll make local and national course corrections as needed. EMEA and APAC were competitive in Q2 and we have taken necessary actions, particularly in the U.K. Our focus is making sure our brands show up in the right way and executing multiple commercial levers—retail pricing, innovation and marketing—to drive share in the second half.
Our next question comes from Bonnie Herzog from Goldman Sachs.
As we move through the balance of the summer, what are you seeing in terms of category demand and consumer behavior? Are there initiatives or innovations you're leaning into to accelerate trends? Also, could you update us on the shelf and cooler space you may have gained in spring resets? What did that end up being?
Bonnie, thanks. From a consumer perspective, we saw a change in Q2 versus Q1. In Q1, some consumer cohorts—lower-income and Hispanic consumers—behaved differently than in 2025, visible in channel data. In Q2, convenience and dollar channels were the most successful, while food and grocery were weaker. Pack-size preference shifted: singles and small packs did well while large packs declined somewhat. That reflects consumers managing dollars under pressure. We are addressing this through innovation and portfolio management. We leaned into Value with Keystone innovations and will bring back Keystone Ice, which is high ABV and more single-centric. We are innovating with Miller High Life and new packaging later this year. Monaco fits in with singles and convenience, which aligns with consumer trends under pressure. For core brands, we are ensuring the right price pack architecture and formats in the right channels. On shelf and cooler space from spring resets, we gained shelf space for many of our brands. The broader category saw some share loss in craft and certain flavored subcategories, but our core brands—Coors Light, Miller Lite, Coors Banquet and Peroni—saw incremental shelf and cooler space and strong retail execution, including displays and features. Coors Banquet continues distribution gains and Peroni is performing well. We feel reasonably confident about our retail presence and execution going into the summer and the balance of the year.
Our next question comes from Robert Ottenstein from Evercore.
I missed a good part of the call earlier. Could you talk a bit more about Monaco in depth: what surprised you, how is the integration going, and given something like 80% of sales are in a handful of states, what is the plan to take it national?
Robert, happy you rejoined. Monaco has been a strong addition. We set criteria to add one-to-two percent contributors that bring scale, and Monaco fits. We closed the deal in Q2 and have focused on integration, moving the business into our network. You're right that volume is concentrated in about five states and in convenience with singles, which provides runway. Job one is to execute and not lose distribution—maintain case flow and execution. We retained about 80 people from the Monaco team to preserve feet on the street and execution capability. We will look to expand channels in states where the brand is strong and follow Monaco's playbook in other states. The approach will be measured: transition to our network, keep and grow current performance in core states, then expand thoughtfully. We are tracking slightly ahead of acquisition expectations on top and bottom line, and the brand has created excitement with distributors and retailers. We'll expand nationally in a disciplined way, leveraging Monaco's proven playbook combined with our infrastructure and capabilities.
Our next question is from Steve Powers at Deutsche Bank.
I wanted to ask about EMEA and APAC and the outlook for improvement in the back half. How much of the expected improvement comes from identified cost savings and restructuring benefits already in motion versus an assumption that demand or promotional intensity or volume trends improve in the back half? If it's the latter, what is your confidence level?
Steve, fair question. EMEA and APAC had a tougher start to H1. On the top line, we've already taken actions given competitive contexts. Central Europe has been robust; the U.K. has been under more pressure from both consumer and competitive factors. We have strong core brands in the U.K. and have launched actions like Carling Black Label and other innovations to support the brand. Madri has had promotional pressure but the team has scaled initiatives like Madri Limon and 0.0 variants. Above Premium brands such as Staropramen, Miller and Blue Moon are doing well in parts of the region. Those commercial actions are in motion and should support improved execution in H2. On the bottom line, the cost savings and restructuring actions announced earlier in the year are now being implemented and should deliver benefits in the second half. Timing is also a factor—U.K. trading around November and December is important for the category—so there is some timing-related upside. In short, it's a combination of commercial actions and cost measures already underway, and we believe the teams have the right plans to execute through the balance of the year.
There are no further questions. This now concludes today's Q&A session and today's call. I'd like to thank everyone for joining, and you may now disconnect your lines.