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Cuervo’s U.S. Sales Slip In Second Quarter As Distributors Reduce Inventories

July 26, 2018

Grupo Cuervo saw its North America volume drop 7% to 3.6 million cases in the three months through June, while net sales slipped 0.4% to MXN$5 billion ($267.6 million) compared to the previous year. Cuervo blamed the decline on “reduced inventory levels across the supply chain and the comparison to a temporary distributor inventory increase during the second quarter of 2017.” In control states, Cuervo subsidiary Proximo Spirits’ portfolio was up 3% by volume in the year-to-date through May.

Globally, Cuervo’s net sales increased 3.6% to MXN$7.177 billion ($385m) thanks to a favorable price mix and sales gains in the company’s home market of Mexico, which was up 17.1% to MXN$1.2 billion ($66.5 million). The group’s largest brand, Jose Cuervo Tequila, declined 5% globally in the second quarter to MXN$2.6 billion ($138.9 million) with volume dropping 12% to 1.6 million cases. But growth in Cuervo’s other Tequilas and spirits (+8% and +20% respectively) offset the flagship’s decline.—Shane English

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