US: Constellation Brands swings back to profit

By | 9 April 2010

Constellation lowers costs to boost profits

Constellation lowers costs to boost profits

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.

Sectors: Beer & cider, Company results, Wine

Companies: Constellation, Grupo Modelo

View next/previous articles

Currently reading -

US: Constellation Brands swings back to profit

There are currently no comments on this article

Be the first to comment on this article

Related articles

just the Round-Up - The week in drinks

The top ten stories published on just-drinks this week:

Research in Focus - Sparkling Wine Outperforms Champagne During Downturn

The recession may have hit all wine and spirits categories but the non-Champagne sparkling wine sector fared better than some, and in particular better than Champagne, according to a new IWSR/just-drinks report.

PORTUGAL: Beam Global Spirits & Wine divests Cockburn's to Symington Family Estates

Beam Global Spirits & Wine is set to trim yet further the wine side of its business by divesting the Cockburn's Port brand to Symington Family Estates.

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page