Analysis

Cuervo 2017 - results data

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In late-February, Cuervo released its results for the 12 months of 2017. Sales in the year came in 6.4% up compared to 2016, on flat volumes. Here, just-drinks breaks down Cuervo's figures for the full-year by region and by category.

Cuervo, owner of the Jose Cuervo Tequila brand, released its full-year results this week

Cuervo, owner of the Jose Cuervo Tequila brand, released its full-year results this week

Cuervo 2017 - Sales versus 2016

20162017
Fourth Quarter73808338
Third Quarter46375765
Second Quarter75366924
First Quarter48434930

Source: Company results

Cuervo, which only listed in February of 2017, chose last year to introduce price increases in its flagship US market, as well as in Canada. The pre-announced rises took effect on the 1 January, resulting in many sales from Q1 shifting to the fourth quarter of 2016, with customers stocking up prior to the increases.

These rises particularly hit the second quarter, when sales plunged by just over 8%. Things returned to better-than-normal in Q3 as "the US and Canada reported significantly-accelerated growth as sales trends have begun to normalise after the effects of the price increase earlier this year", said Cuervo. A healthy fourth quarter was all the more impressive, considering the group was cycling the up-stocking from the corresponding period a year earlier.

All in, then, Cuervo's 2017 started flat, got worse, then kicked on with some style.

Cuervo 2017 - Sales by Region

US & CanadaMexicoRest of the WorldTotal
2016165455018283224396
2017169745786335825958

Source: Company results

The 2.6% sales lift in the US & Canada was driven by the aforementioned price increases - total volumes in the two markets fell in 2017 by just under 5%.

The group's home market of Mexico remains strong, with sales jumping by just over 15% in the year on a 6.3% volumes lift. Meanwhile the Rest of the World reporting division - which actually accounts for only 13% of group value sales - was up double digits in both value (+18.6%) and volume (+15.1%).

Cuervo 2017 - Sales by Category

Jose CuervoOther TequilasOther SpiritsNon-Alcoholic & OtherRTDTotal
20168928496650973300210524396
20179500589052103350216825958

Source: Company results

Jose Cuervo may have had to deal with price increases in 2017, but that didn't stop the brand from posting a lift in sales. Indeed, the price rises drove the climb in value sales of Jose Cuervo, which were up 6.4% on a 1.7% volumes increase.

The group's other Tequila brands, which includes Azul Centenario and Maestro Dobel, increased sales by almost 19%, but Cuervo's other spirits portfolio had a relatively disappointing 2017 - sales from the category, which features Bushmills Irish whiskey, Stranahan's American whiskey, Hangar 1 vodka and Kraken rum - were up by a lesser 2.2% on a 0.9% dip in volumes.

Currently 37% reliant on the Jose Cuervo stable, we can expect the group to dial down this reliance going forward, if December's US$205m purchase of Pendleton Whisky is an indication of future M&A strategy.


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