How did Constellation Brands perform in Q1 fiscal-2021? - results data

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  • First-quarter sales slip 6% to US$1.96bn
  • Both beer and wine & spirits divisions down 4% in three months to end of May
  • Guidance for fiscal-2021 "unavailable at this time"

Constellation Brands has seen sales in its first full COVID-impacted quarter slip by mid-single-digits, although beer shipments to distributors in the US actually rose in the period.

The multi-category drinks group today posted a 6% decline in sales from the three months to the end of May. Constellation was upbeat on the performance, however, with the main hit from the coronavirus the hampering of production of its Mexican beer brands for the US.

The beer business, which operates only in the US, was down 4% in value, but depletions - shipments to distributors - increased in the quarter by 5.6%. The group noted that the unit's performance in the country's off-premise "more than offset the impact of the 75% reduction in the on-premise channel" throughout most of the quarter. Brewing was affected by anti-COVID measures introduced in April by Mexican authorities, with shipment volumes and distributor inventory levels expected to suffer in the current quarter before returning to normal by the end of November.

Over in wine & spirits, where combined sales also fell 4%, Constellation professed satisfaction with the performance, as the division's volumes declined faster, by 9.2%. The company's strategy of exiting the value ends of the wine & spirits markets is set to make a major step forward when it completes the delayed divestment of a raft of brands to E&J Gallo Winery. The current version of the transaction, valued at $1.03bn, is expected to close during the current quarter, to the end of August.

Stripping out prior-year sales from Canadian whisky brand Black Velvet and craft brewer Ballast Point, both of which have since been offloaded, sales in the three months declined by 4%.

Constellation Brands First-Quarter Fiscal-2021 - Sales by Segment

BeerWineSpiritsGroup Total
Q1 20201477.453584.82097.2
Q1 20211384.1499.679.71963.4

Source: Company results

CEO Bill Newlands

"We overcame a number of headwinds to deliver solid first-quarter results marked by margin improvement and impressive depletion growth for our beer business and our wine & spirits 'Power Brand' portfolio.

"While the slowdown of our Mexican beer production due to COVID-19 created short-term impact to distributor inventory levels, shipments and net sales, we continue to win in sales channels that are open, consumer demand for our brands remains strong and our outlook for the year remains positive."

In today's results announcement, Constellation noted that Corona Hard Seltzer, which launched in March, is the current number four in the US hard seltzer category.

A separate statement by the group today confirmed the acquisition of "digitally-native" Empathy Wines.

Constellation Brands Fiscal-2021 - Sales versus 2020

Source: Company results

To access Constellation Brands' official first-quarter results statement, click here.

Constellation Brands Performance Trends 2016-2020 - results data

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