Constellation’s Sales Up 9%, With Strong Growth Expected To Continue

Constellation Brands achieved strong sales and profit growth in its recently-completed fiscal year, and expects more of the same in the year ahead.

For the 12 months ended February 29, Constellation enjoyed a 9% net sales gain and an 18% jump in operating income. The company’s net sales increase reflects 8% organic growth (on a constant currency basis) and acquisition benefits from Meiomi and Ballast Point, both of which were purchased during the latter half of 2015.

Beer continues to be Constellation’s growth engine, as organic net sales for the category advanced by 13% on depletions growth of 12%. Mexican brands Modelo Especial and Corona Extra drove the company’s beer growth in fiscal 2016. Meanwhile, Constellation’s wine and spirits business was also on the rise, with organic net sales up 3% on a constant currency basis. Victor, New York-based Constellation attributed its wine and spirits growth to solid progress for its “focus brands,” including Kim Crawford, Meiomi, Ruffino, Black Box, Simi, Clos du Bois, The Dreaming Tree and Woodbridge by Robert Mondavi on the wine side and Paul Masson and Svedka in spirits. The company also said Casa Noble Tequila is rising sharply.

Looking ahead, Constellation is targeting net sales and operating income growth in the 14%-17% range for its beer business in fiscal 2017 (ending February 28, 2017), in part because of an incremental benefit from Ballast Point—the San Diego craft brewer that Constellation acquired for $1 billion. For wine and spirits, Constellation is projecting net sales growth in the mid-single-digit range and mid-to-high single-digit growth in operating income, including incremental benefits from Meiomi—which the company acquired for $315 million—and The Prisoner, which Constellation purchased earlier today for approximately $285 million.

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Tagged : Ballast Point, Constellation, Constellation Brands, Corona, Meiomi, Modelo Especial

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