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Beer sales boost Constellation’s Q4 profits
Constellation Brands has reported strong fourth-quarter profits boosted by the soaring growth of beer brands including Corona and Modelo Especial.
The distribution company reported an 86% rise in net sales overall to $1.29 billion today, results which “exceeded” the company’s expectations.
This rise was driven largely by sales of beer which saw net sales jump by 13% in the fourth quarter due to volume growth driven by strong consumer demand.
Its surging fourth-quarter profits follow the completion of a a $5.3 billion deal to acquire the US distribution rights to Corona, Modelo and other Mexican beers last year.
Constellation reported an end of quarter profit of $157.2 million, or 79 cents a Class A share, up from $81.7 million, or 43 cents a share, a year earlier.
Rob Sands, president and chief executive officer of Constellation Brands, said: “This has been another exciting year for Constellation.
“We kicked off the year with a smooth transition for our transformational beer acquisition. We are executing an effective integration plan as we work diligently to expand our new brewery in Mexico while maintaining the strong momentum of our U.S. commercial beer business.
“From a marketplace perspective, this is the fourth consecutive year of market share gains for our iconic beer portfolio with Corona Extra registering strong growth and Modelo Especial continuing to grow double digits while surpassing the 50 million case milestone. Within our wine and spirits portfolio, our brand building investments drove U.S. market share volume gains, while we maintained dollar share across measured channels.”
Constellation, which makes Svedka Vodka and Robert Mondavi wine, said wine and spirits net sales had increased 1% last quarter on an organic constant currency basis.
The volume of wine and spirits shipped by the company rose 4.3% while beer shipment volume rose by 9.9%.
Sands added: “For the year, our US wine and spirits portfolio posted depletion growth of 3.5%, with depletions for our focus brands growing almost six percent.
“These trends were driven by strong performance of some of our well-known brands including Rex Goliath, Mark West, Kim Crawford, SIMI, Estancia, Ruffino, Black Box and Woodbridge by Robert Mondavi.