Constellation Brands this morning (1 July) reported its first-quarter results. Here we take a glance at the figures for the three months to the end of May.
- Reported consolidated net sales decreased 1% to US$976m, due primarily to the divestitures of the UK cider and value spirits businesses. This was partially offset by the favourable impact of year-over-year currency exchange rate fluctuations.
- Constellation’s equity earnings from its 50% interest in the US joint venture Crown Imports totalled $54m, a decrease of 14% from the prior year first quarter. For first quarter of 2011, Crown generated net sales of $622m, a fall of 3%, and operating income of $109m, down 14%.
- Wine organic net sales on a constant currency basis were down by 1% to $729m. North America wine net sales on a constant currency basis decreased 2% to $532m as a slight lift in volume was more than offset by higher promotion costs. Australia and Europe wine net sales also on an organic constant currency basis increased 1% to $198m versus the prior year first quarter.
- Total spirits organic net sales increased 28% for the quarter to $58m, led by a 40% gain for Svedka vodka. “Our first ever Svedak television advertising campaign featuring the Svedka fembot continues to resonate well with consumers,” the company said.
- Full-year fiscal 2011 guidance includes; interest expense of around $210m – $220m, a tax rate of around 40% on a reported basis, and free cash flow of $350m to $400m.
- “We are beginning to see benefits from our focus on profitable organic growth,” said Rob Sands, Constellation’s president and CEO. “Our US distributor initiative gained traction in the first quarter as we experienced improved results at retail. We also increased brand investments and promotional activities and launched several new products, all of which drove an improvement in depletion trends.”
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