US: Constellation Brands swings back to profit

Lower costs helped Constellation Brands to offset a fall in sales and swing back to the black in its fiscal full-year, the wine giant has announced.

Constellation today (9 April) reported net profits of US$99m for the 12 months to the end of February, compared to losses of $301m in the prior year.

Lower impairment charges on key assets, fewer restructuring charges, lower income tax and interest payments boosted the Robert Mondavi wine producer's bottom line during the year.

Operating profits reached US$311.5m, against $29.6m a year earlier.

However, Constellation said that comparable operating income, exlcluding one-off charges and gains, fell by 7% against the prior year.

Net sales fell by 8% to $3.36bn, largely due to the loss of the firm's value spirits portfolio and unfavourable currency rates, said Constellation.

"Given the lingering economic challenges throughout our key markets, I am pleased with our results for the year," said company president and CEO Rob Sands.

He praised the firm's effort to cut debt, which fell by $600m during the year to US$5.5bn.

On a constant currency basis, wine sales in North America fell by 3%, but grew by 7% in Europe due to higher volume sales of lower priced wines.

Like-for-like spirits sales rose by 19% for the year, led by strong gains for Svedka vodka.

Net sales for Crown Imports, Constellation's 50-50 beer import business with Grupo Modelo, fell by 6% to $2.3bn.

Constellation also announced a $300m share repurchase programme.

For the full announcement, click here.