Constellation’s Full-Year Sales Top $8.3 Billion, But Outlook Uncertain Amid COVID-19 CrisisApril 3, 2020
Constellation Brands continued to show solid growth in its fiscal year through February, with net sales up 3% to $8.34 billion and operating income rising 4% to $2.7 billion, but the company says results for its current fiscal year are impossible to predict at the moment in light of the COVID-19 outbreak.
Constellation’s beer business saw sales climb 8% to $5.6 billion and operating income grow 10% to $2.2 billion for the year, with depletions up 7.5%. Those gains were driven by the ongoing advance of Modelo Especial, whose depletions increased by 16%, along with increasing contributions by newer labels like Corona Refresca and Corona Premier. The company said its new Corona Seltzer is also off to a strong start.
With Mexico shuttering all non-essential businesses through April 30, there’s been some initial confusion over whether Mexican beverage alcohol imports to the U.S. will be affected. Constellation declined to comment this morning on the situation. But RBC issued a note saying that due to the critical trade relationship between the two countries “it is very unlikely that Mexico will be able to interfere with (Constellation’s) production and shipments to the U.S.”
Meanwhile, Constellation’s wine and spirits business posted net sales down 5.6% to $2.7 billion and operating income down 8.1% to $708 million, even as focus brands like Kim Crawford, Meiomi, and The Prisoner continued to grow by double-digits. The company now expects its $1.1 billion sale of a host of lower-end brands to Gallo to close by the end of May, and its separate $130 million sale of Nobilo, also to Gallo, to close by the end of August.—Daniel MarstellerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.