Constellation’s First Quarter Sales Up 6%, But Higher Grape Costs Cut Into ProfitsJuly 2, 2013
Constellation Brands said net sales grew 6% to $673 million in the three months through May, its fiscal first quarter, but higher grape prices and other costs pushed operating income down by 5% to $104 million. Constellation’s wine and spirits sales were up 4% during the period, led by double-digit depletions gains for Rex Goliath, Kim Crawford, Nobilo, Simi and Black Box, while newer brands Simply Naked, Thorny Rose and The Dreaming Tree also gained traction.
In announcing the quarterly results, Constellation CEO Rob Sands touted the group’s enhanced position in the U.S. beer market through its multibillion-dollar deal for full control of Crown Imports—U.S. marketer of the Grupo Modelo portfolio—which closed June 7. For the first quarter, Crown’s sales rose 5% to $762 million, while operating income—boosted by a combination of price hikes and volume growth on brands like Modelo Especial, Corona Light and Pacifico—lifted 9% to $134 million.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.