Constellation Posts Sales Up 7%, As Beer Business Drives Growth
October 5, 2023Constellation Brands saw net sales increase 7% to $2.8 billion in its fiscal second quarter ended in August, as operating income jumped 10% to $968 million on a comparable basis. Growth continues to be driven by the company’s beer unit, which accounted for approximately 84% of net sales during the quarter.
“Modelo Especial continued to outperform the market as the top share gainer and solidified its position as the number-one beer in U.S. tracked channels,” said Constellation president and CEO Bill Newlands. “Meanwhile, our higher-end wine brands, Meiomi and Kim Crawford, outperformed their corresponding segment in tracked channels and we continue to expect solid growth acceleration and margin improvement from our overall Wine and Spirits business in the second half.”
With Modelo Especial in the lead, Constellation’s beer unit posted 12% net sales growth to $2.4 billion for the quarter, with operating income up 10% to $954 million. In addition to Modelo Especial growing nearly 9%, Modelo Chelada saw over 40% growth, while Corona Extra was up 1% and Pacifico accelerated to a pace of 15%.
In wine and spirits, Constellation noted that its largest high-end brands, Meiomi and Kim Crawford, delivered 7% and 6% depletion growth, respectively, outpacing their category, while the craft spirits portfolio, including brands like High West whiskey and Mi Campo Tequila, saw depletions jump 30%. Newer products like Meiomi Bright and Simi Brightful also contributed growth. Still, overall organic net sales fell 11% to $444 million on shipments down 15% to 6.1 million cases, with operating income declining 19% to $81 million.
Constellation expects the wine and spirits unit to be roughly flat in net sales terms for the full fiscal year and to see operating income growth of 2% to 4%, while the beer division is expected to post sales up 8% to 9% and operating income growth of 6% to 7%.—Daniel Marsteller
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