Double-Digit Beer Growth Boosts Constellation, While Wine Decline Offsets Spirits’ RiseJanuary 8, 2015
After solid third-quarter sales growth propelled by double-digit growth for its beer business, Constellation Brands has raised its full-year earnings forecast. Constellation’s net sales for the three months ended November 30, 2014 were up by 7% over the year-earlier period, as 16% sales growth for the company’s beer segment offset a sluggish performance for Constellation’s wine and spirits business. Following the release of its better-than-expected third quarter results, Constellation revised its earnings projection for its full fiscal year (ending February 28, 2015) to $4.25-$4.35 per share, up from its previous target of $4.10-$4.25.
“Our beer business continued to gain share across all channels during the third quarter driven by Modelo Especial, Corona Extra and Modelo Especial Chelada,” said Constellation president and CEO Rob Sands. “Our beer portfolio is experiencing tremendous momentum and generated the vast majority of total U.S. industry volume growth in IRI channels during the quarter.”
On the spirits and wine side, the Victor, New York-based Constellation says sales were flat on a constant currency basis. The company’s higher spirits shipment volume was offset by lower wine volume both for its branded and bulk business. “While we are on track to meet our earnings goal for the year, we don’t expect depletions to grow in line with the U.S. wine category,” said Sands. “However, during the third quarter, we experienced solid depletion trends for some of our fastest-growing wine brands, including Kim Crawford, Ruffino, Black Box and The Dreaming Tree. Our spirits business generated outstanding growth, driven by new flavor introductions across the portfolio. We also completed the integration of Casa Noble Tequila (which Constellation acquired in September 2014) into our marketing and sales organizations and the brand is quickly gaining traction.”
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