US: Constellation Brands nine-month profits rise
- Nine-month net profits rise by 22.3% to US$342m
- Net sales fall by 30% to $2.27bn
- Operating profits up by 1.8% to $407.1m
- US wine sales under pressure but group nudges FY forecast upwards
Constellation Brands has reported an increase in net profits for the first nine months of its fiscal year and improved its full-year guidance, despite pressure on its key US wine business.
Constellation's net profits for the nine months to the end of November rose by 22.3%, to US$342m. Tax gains in the second quarter drove the increase, which hid a 25% drop in third-quarter profits, to $105m. The Robert Mondavi wine producer's operating profits also declined in the third quarter, by 6% on the same period of last year, to $160m.
However, nine-month operating profits crept up by 1.8% to $407.1m.
Constellation nudged up its full-year earnings per share guidance today (5 January), to between $1.96 and $2.06 on a reported basis. After its first-half, the range was set $0.04 below this. On the same basis, the group achieved earnings per share of $2.62 in its previous year.
Despite the group's confidence at the bottom line, wine sales in its key US market continued to look under pressure. Constellation's wine shipment volumes in North America fell by 6% in the third quarter and by 3% for the nine months.
Group CEO Rob Sands said that he expects to see better sales in the fourth quarter. “We are experiencing improving depletion and marketplace performance driven by our focus brands and new products including Simply Naked, Primal Roots, The Dreaming Tree, Rex Goliath Moscato, Woodbridge Malbec, Ruffino Prosecco and Arbor Mist Pomegranate Berry Pinot Noir,” Sands said.
For the third quarter and nine-month period, Constellation reported net sales down by 27% and 30% respectively, to $701m and $2.27bn. This was due to the disposal of 80% of the firm's Australia and Europe business to Champ Private Equity at the beginning of 2011.
For the company's announcement, click here.
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