US: Constellation sees sales slip, profits rise in H1

By | 1 October 2009

  • Six-month sales down to US$1.67bn
  • Half-year net profits hit $106.2m
  • Debt decreased by $270m year-to-date
  • Reaffirms full-year diluted EPS and free cash flow guidance

Constellation Brands has posted a dip in sales but a healthy rise in profits for its fiscal first-half.

The wine giant, which also operates in the beer and spirits sectors, said today (1 October) that net sales in the six months to the end of August slid to US$1.67bn, down from $1.88bn.

Net profits, however, leapt to $106.2m from $21.9m a year earlier, thanks in part to US shipment growth,
savings from cost reduction efforts and the overlap of foreign currency losses from the prior year second quarter in its wine segment.

Operating profits almost doubled to $221.7m from $112.2m.

For the three-months to the end of August, sales were down to $876.8m from $956.5m, with the year earlier's net loss of $22.7m turned into a net profit of $99.7m. Operating profits soared to $138.6m versus $21.5m.

"Our performance in the second quarter demonstrates that we are on track to achieve our full-year goals," said Constellation's president and CEO, Rob Sands. "We are focused on driving organic growth, building must-have brands that return the greatest profits and creating efficiencies for long-term sustainable growth.

"Our initiative to consolidate distribution in the US is nearly complete and we anticipate that this effort will be a major catalyst for future organic brand growth."

Company CFO Bob Ryder added: "We are pleased with the progress made in our global cost reduction efforts and the continuing drive to increase sustainable free cash flow and pay down debt. Our deleveraging efforts are progressing well as debt decreased by more than $155m during the second quarter and more than $1bn since the beginning of fiscal 2009."

For the full announcement, click here.

To read about Constellation's Q1 performance, click here.

An update from Constellation's results conference call appears here.

Sectors: Beer & cider, Spirits, Wine

Companies: Constellation

View next/previous articles

Currently reading -

US: Constellation sees sales slip, profits rise in H1

There are currently no comments on this article

Be the first to comment on this article

Related articles

AUS: Australian Vintage loses CEO

The CEO of Australian Vintage is to step down.

UK: E&J Gallo Winery forecasts tough 2010

E&J Gallo Winery will continue trimming back its range in the UK in 2010, as the trend for promotions and a "savage" tax on wine make the country a tough place to do business.

AUS: Constellation cuts Aus jobs as UK operations expand

Constellation Brands has confirmed 40 job losses in Australia, as it looks to expand its bottling operations in the UK.

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