US: Constellation Brands sees FY profits dip despite sales jump
- FY net profits down by 13% to US$387.8m
- Net sales in 2012 increased by 5.3% to $2.8bn
- FY operating profits up by 7%, hitting US$523m
Constellation released its full-year results today
Constellation Brands has posted a strong full-year increase in sales but net profits dropped as cost of goods damaged margins, the company said today (10 April).
Net profits fell by 13% to US$387.8m in the 12 months to the end of February, the New York state-headquartered company said. Net sales increased by 5.3% to $2.8bn over the same period while operating profits were up by 7% to $523m.
Fourth-quarter numbers were similar. Net profits in the three months to the end of February dropped by 21% to $82m, as net sales increased by 11% to $696m. Operating profits climbed by 60% to $127m.
Rob Sands, Constellation Brands president & CEO, hailed the results, calling it “an exciting year” as the company neared completion of the full acquisition of Crown Imports, its JV with Grupo Modelo. Constellation is aiming to buy out Modelo's share in Crown as a result of Anheuser-Busch InBev's $20.1bn takeover of Modelo.
“From an operational perspective, we outperformed the growth of the US wine and spirits industry gaining market share collectively across all channels,” Sands said.
Full-year net profits, which were down on 2011 by $57m, suffered from a $95.6m increase in costs of goods compared to 2011, with income taxes and administrative costs also up on the previous 12 months.
The results were the opposite of last year's, when net profits increased and sales dropped.
Looking ahead, Constellation said its beer business will target depletions and net sales growth in the low- to mid-single digits. Its wine & spirits unit expects to grow volumes in line with the US industry.
Constellation's share price dipped slightly after the markets opened today.
To read the company's official statement, click here.
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