Constellation Brands has reported consolidated net sales growth of 22% in the third quarter of its financial year, to $2.4 billion (€2 billion), compared to the same period last year.
Comparable EBIT (Non-GAAP) for the period increased 35% to $818 million (€669.12 million) during the financial quarter.
Operating income amounted to $783.1 million (€640.6 million), up 193%, from €267.2 million (€218.6 million) last year.
President and chief executive officer, Bill Newlands, commented, "Our business performance accelerated during the quarter despite ongoing headwinds from the pandemic, as we remain obsessed with meeting the needs of our consumers while staying focused on our long-term growth strategy."
Divisional Performance
Beer net sales for the quarter increased 28% year-on-year to $1.7 billion (€1.4 billion), while wine and spirits saw net sales growth of $760.2 million (€621.8 million).
Modelo Especial achieved nearly 20% depletion growth and emerged as the import share gainer in IRI channels.
The Corona Brand Family grew nearly 12% in IRI channels, driven by the performance of Corona Premier, Corona Extra, and Corona Hard Seltzer.
In the wine and spirits segment, the marketplace performance of higher-end wine power brands outpaced the total higher-end wine category, driven by double-digit growth for Kim Crawford, Meiomi, and The Prisoner Brand Family.
The division's operating margin declined by 220 basis points to 24.0% as benefits from mix and price were more than offset by unfavourable fixed cost absorption resulting from wildfires and increased marketing.
Recently, Constellation Brands divested a portion of its wine and spirits portfolio to E. & J. Gallo Winery.
Garth Hankinson, chief financial officer, said, "The finalisation of our wine and spirits transactions enhances the financial profile of our business and enables further debt reduction so that we can continue to execute our commitment to return $5 billion in value to shareholders through dividends and share repurchases through fiscal 2023."
Outlook
The company's beer business has targeted a 7-9% growth in net sales and an 8-10% increase in operating income in the financial year 2021.
The wine and spirits business has projected a decline of 9 - 11% in net sales, and a 16%-18% drop in operating income in its next financial year.
© 2021 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.
