Constellation Sees Third-Quarter Surge, Led By Beer, Premium Wines And Spirits

Constellation Brands has reported sales up 22% to $2.4 billion on an organic basis for its fiscal third quarter ended in November, generating operating profits up 30% to $835 million. Growth was led by double-digit volume gains in Constellation’s beer business, as well as solid progress for its premium wine and spirits stable.

On the beer side, shipments increased 28% to 92.3 million cases, with depletions advancing by 12%. Net sales leapt 30% to $1.7 billion, while operating income soared 39% to $715 million. Modelo Especial delivered 20% depletion growth for the quarter, with the Corona and Pacifico brands rising by 12% and 35% in retail channels, respectively. For the full fiscal year ending in February, Constellation is targeting 7%-9% net sales growth and 8%-10% operating income growth for its beer business.

Total wine and spirits shipments rose 6.5% to 13.2 million cases for the quarter, with depletions slipping 0.8%. Organic net sales were up 13% to $760 million for the unit, with operating income increasing 1% to $182 million. Key brands like Kim Crawford, Meiomi, and The Prisoner brand family were all up by double-digits, as The Prisoner’s new Cabernet Sauvignon and Chardonnay varietals contributed momentum and Meiomi’s recent Cabernet launch also prospered out of the gate. Following Tuesday’s closure of the long-simmering megadeal with E.&J. Gallo covering more than 30 wine brands, Constellation says its retained wine and spirits portfolio will show net sales growth of approximately 2%-4% for the full fiscal year.—Daniel Marsteller

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