Constellation Brands has offloaded another batch of wine labels, with US peer The Wine Group snapping up the assets.

The deal, announced today (6 October), involves what Constellation called “a portion of its mainstream and premium wine brands”. The wines include the Cooper & Thief, 7 Moons and The Dreaming Tree brands.

For its part, California-based The Wine Group said the acquisition was an “expansion and diversification into premium and premium-plus categories, as well as the luxury category”.

Financial terms were not disclosed.

Last year, Constellation offloaded a chunk of its “popular and mainstream” wine and spirits business to US peer E&J Gallo.

The Corona beer maker said the latest disposals were part of a strategy to compete “predominantly in premium and fine wine and craft spirits”. It added it will continue to invest in what it called its “remaining strategic mainstream wine-and-spirits assets”. Those brands include Woodbridge wine and Svedka vodka.

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Robert Hanson, the president of Constellation’s wine-and-spirits division, said: “A key driver of our success has been our relentless focus on consumer preferences, including long-term, consumer-led, premiumisation trends and remaining agile in our approach to stay ahead of evolving marketplace dynamics.”

The Wine Group, which has a stable of brands including Benziger Family Winery, Concannon Vineyard and Franzia, added the purchase meant it moved from being the third-largest wine company in the US in revenue to the second-biggest. It does not disclose its sales.

The deal was unveiled on the same day as Constellation published its second-quarter and half-year financial results.

Second-quarter net sales rose 12% to US$2.66bn, contributing to a 13.7% first-half increase to US$5.41bn.

During the three months to 31 August, the net sales from Constellation’s wine-and-spirits division inched up 1% to $515.8m. Depletions fell 2.2%. Citing IRI data, Constellation said its “wine portfolio outperformed the total US wine category and gained share”.

The company is forecasting annual net sales from its wine-and-spirits arm will be at best flat, or, at worst, down 2%.

Second-quarter group operating income climbed 10% to $813m. First-half operating income more than doubled to $1.63bn.

Constellation booked a second-quarter net loss of $1.15bn and a half-year loss of $761.7m, hit by costs and impairments from its investment in cannabis venture Canopy Growth Corp.

On a comparable basis – excluding items such as the Canopy expenses – second-quarter net income rose 28% to $588.7m. Comparable half-year net income was up 19% at US$1.09bn.

Constellation also provided investors with fresh forecasts for annual earnings per share.

In June, the company estimated its earnings per share for the year would come in between US$10.50 and US$10.80. It provided a forecast for comparable EPS of US$11.20 to US$11.50.

Today, the group forecast its reported annual EPS would be between US$0.75 and US$1.15. Constellation said its comparable basis EPS is forecast to reach between US$11.20 and US$11.60. The consensus among Wall Street analysts on the comparable EPS forecast is US$11.52.