USA: Constellation Brands Q2 sales and profit higher than Wall Street forecasts

Constellation Brands — the alcohol company behind beer names like Corona Extra and Modelo Negra — released its second quarter earnings report on October 5, revealing sales and profit that were higher than what Wall Street expected due in no small part to strength in its beer segment.

Second quarter revenue came in at $2.02 billion, up from the $1.96 billion consensus estimate and a 17% improvement over sales reported this time last year. Net income for the quarter came in at $358.9 million, up from $302.4 million in the prior-year period and resulting in earnings of $1.77 per share. This earnings per share figure marks a 13% increase over earnings reported in the year-ago quarter and a 12-cent per share improvement over what Wall Street was expecting to see.

Constellation executives attributed these results to a 20% increase in net beer sales and a 12% increase in wine and spirits net sales. While the November 2015 acquisition of Ballast Point helped Constellation with its year-over-year beer sales comparisons, the company’s shipment volume excluding Ballast Point beer grew 13.3% year-over-year, and Corona Extra and Modelo Especial sales benefited from a boosted marketing effort as well as consumer demand.

“During the quarter, we gained share and improved margins across our business, while continuing to make smart investments designed to fuel growth today and in the future,” Rob Sands, Constellation Brands president and CEO, said in a statement on October 5. “During the second quarter, our beer business contributed 60% of category dollar growth for the U.S. beer industry and continues to outperform the high end of the market, with accelerating growth trends versus the previous quarter, and overall share gains driven by Corona Extra and Modelo Especial.”

Alongside the second quarter earnings release, Constellation also announced that it is acquiring Utah-based High West Distillery for $160 million. The acquisition, which includes all of High West’s operations and its portfolio of American straight whiskeys, is expected to close by the end of October.

05 October, 2016