Constellation Brands' H1 fiscal-2018 by category - results data

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In early-October, Constellation Brands reported its results for the first-half of its fiscal 2018. Group sales in the six months to the end of August increased by 7% in organic terms, repeating the rate of top-line growth in the first quarter. Here, just-drinks takes a closer look at the company's performance in the six-month period on a by-category basis.

Constellation Brands Fiscal-2018 - Sales-to-date versus 2017

Source: Company results

The group has had a steady start to its current fiscal year. In the first three months, to the end of May, sales were up in organic terms by 3% on the corresponding period a year earlier. This was followed in October by the release of Q2 figures, showing an 8% top-line rise on an organic basis.

For the second half of fiscal-2018, Constellation needs to bring in sales of US$3.31bn to match the full-year fiscal-2017. With a head-start of $127m, the scene is set for an important six months ahead.

Constellation Brands Half-Year Fiscal-2018 - Net Sales by Segment

H1 20172373.51348.5171
H1 20182621.21215.7183.1

Source: Company results

Beer once again serves as the group's motor: In Q2, sales from the group's brewing wing jumped by 13%, contributing to a 10% lift in the half-year period. CEO Rob Sands boasted that Constellation "remains the leader in the high-end of the US beer market", with the company crediting its beer business with accounting for around 60% of the country's high-end category growth. The group also claimed "three of the top ten share gainer spots" in the US beer market.

Further evidence of this focus on premium beer came in August, when Constellation added another craft brewer to its ranks, this time Florida-based Buddha Brewery.

Turning to wine and spirits, the figures for both the second quarter and first half had to contend with the divestment in December of Constellation's Canadian wine assets, to Ontario Teachers' Pension Plan for $761m. Consequently, sales in reported terms from the combined reporting divisions fell by 8% in H1, but actually rose by 2% on an organic basis, once the Canadian sales were removed from the corresponding period a year ago.

Factored into reported sales for the half-year just past were three wine and spirit brand purchases - The Prisoner in April last year as well as premium wine range Charles Smith Wines and craft distiller High West Distillery, both in October, 2016. The three "delivered exceptional depletion growth of 30%, 74% and 37%, respectively", in the second quarter.

Finally, group spirits sales increased by 7% in the half-year.

Inside Constellation Brands' acquisition strategy - Click here for a just-drinks analysis

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