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Constellation Sales Climb 8% In First Half Of Fiscal Year

October 4, 2018

Constellation Brands has posted net sales up 8.2% to $4.3 billion for the six months through August, representing the first half of its fiscal year. Operating income grew 8.8% to $1.39 billion, driven by ongoing strong gains across the company’s beer division as well as solid progress at the higher price tiers of the wine portfolio.

Constellation’s wine and spirits unit saw sales grow 3% to $1.4 billion in the first half, with wine up 4% and spirits eking out a 1% increase. Net sales benefited from shipment timing in the second quarter, an effect which is expected to reverse in the third quarter. Despite strong second-quarter growth, the wine and spirits division’s operating income slipped 5% to $369.2 million in the first half overall.

Constellation noted that it continues to focus on higher price points in the wine business, with Meiomi, Kim Crawford, Simi, and The Prisoner driving 6% depletions growth for its above-$11 wines during the second quarter. Constellation also highlighted a number of new products that are hitting the market, including Meiomi Sparkling, The Snitch (a Napa Valley Chardonnay from The Prisoner Wine Co.), Cooper & Thief Rye Barrel Aged Cabernet, and Black Box Spirits.

In beer, Constellation enjoyed an 11% net sales increase to $2.9 billion in the six months through August, with operating income up 8% to $1.15 billion. While the Modelo brand family continues to soar, the Corona franchise doubled its rate of depletion growth in the first half to 8%, driven by new products like Corona Premier and Corona Familiar.

Meanwhile, Constellation added that it expects its recently announced $4 billion investment in Canadian cannabis producer Canopy Growth to close around the end of this month. The company said it continues to see cannabis as a major growth opportunity for the next decade. —Daniel Marsteller 

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