Cuervo Sales Slow In First Quarter Following Price IncreasesApril 28, 2017
In its first quarterly earnings report since going public on the Mexican Stock Exchange earlier this year, Cuervo posted a sales increase of 2% to $260 million. In a statement late last night Cuervo said its first quarter results were weighed down by price increases in the U.S. and Canada which took effect on January 1. Operating profit, however, jumped 36% to $78 million, reflecting those same price increases as well as lower advertising, marketing and promotional costs.
Meanwhile, Cuervo confirmed that its initial public offering in February, which floated 15% of the company, garnered $980 million, with the Beckmann family maintaining control of the group.
In the U.S. market, the Jose Cuervo brand grew 4.3% to 3.6 million cases last year, according to Impact Databank, compared with a total Tequila category that advanced by 6.5% to 15.7 million cases.
In the company’s first quarter, Jose Cuervo accounted for 32% of the company’s total volume and 35% of sales. Other Tequilas in the portfolio represented 20% of sales, while other spirits had a 19% share. By region, the U.S. and Canada comprised more than two-thirds of the group’s sales during the period, while Mexico had a share of nearly 20%.
In addition to its core Tequila business, Cuervo touted the performance of Bushmills during the quarter. The Irish whiskey label, acquired from Diageo in 2014, posted a 10% depletions rise in the U.S. over the first three months of the year, including the successful launch of the brand’s Red Bush offshoot ($23), which offers a sweeter taste profile.-Daniel MarstellerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.