US: Profits slip in Q1 as sales stay strong for Constellation Brands
- Comparable Q1 net profits drop by 3% to US$74m
- Net sales in three months to end of May rise by 6.1% to $673.4m
- Operating profits also dip, by 5% to $104m
Constellation Brands released its first-quarter results today
Constellation Brands has seen its first-quarter profits hit by rising costs, despite a slight lift in sales for the period.
The company said earlier today (2 July) that net profits on a comparable basis for the three months to the end of May were down by 3% year-on-year at US$74m. Net sales in the period increased by 6.1% to $673.4m, while operating profits fell by 5% to $104m.
The company highlighted higher grape and selling, general and administrative expenses as hampering profits in the quarter.
On a reported basis, net profits plunged by 27% to $53m, with operating profits falling similarly, by 34% to $71m.
Wine sales rose by 6% in the quarter and spirits sales were up by 4%. Crown Imports, the beer JV in the US with Grupo Modelo that Constellation has acquired, saw net sales increase by 5%.
“From an operational perspective, we are off to a positive start for the year, as we achieved our first quarter goals and objectives," said company president and CEO Rob Sands.
The firm confirmed in its results statement that it completed the purchase of Modelo’s US beer business from Anheuser-Busch InBev for around $4.75bn on 7 June. The transaction also includes Modelo's brewery at Piedras Negras, on the border between the US and Mexico.
Constellation said it expects its full-year earnings-per-share to come in between $2.32 and $2.62 on a reported basis, and between $2.60 and $2.90 on a comparable basis. The forecasts include a projected spend of up to $140m this year on "expansion activities" for the Piedras Negras brewery.
To read the company's official release, click here.
For a full round-up of just-drinks' coverage of Constellation's Q1 results, click here.
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