Constellation Brands Exceeds Expectations with Strong Beer Sales, Lagging Wine and Spirits Revenue
Constellation Brands, the parent company of popular beer brands Modelo Especial and Corona Extra, has reported earnings and revenue that surpassed analysts’ predictions for its fiscal second quarter of 2024. The company’s beer business experienced remarkable double-digit sales growth, while sales of wine and spirits struggled to keep up.
The beer portfolio of Constellation Brands saw an impressive 12% increase in sales, with the Modelo brand family leading the way. This robust growth in beer sales has prompted the company to raise its earnings per share outlook for fiscal 2024, now projecting a range of $9.60 to $9.80.
Unfortunately, the wine and spirits brands under the Constellation Brands umbrella did not fare as well, experiencing a significant 14% decrease in sales compared to the previous year. CEO Bill Newlands attributed this decline to consumers’ preference for premium-priced beverages, which impacted the demand for wine and spirits.
However, there were some bright spots for the wine and spirits division. Constellation Brands’ Meiomi and Kim Crawford wine brands achieved depletion growth of 7% and 6% respectively. Additionally, its craft spirit, Mi Campo Tequila, reported an impressive depletion growth of over 60%.
Despite the current challenges, Newlands expressed optimism that the wine and spirits business would bounce back. He emphasized the potential benefits of price increases and the company’s focus on expanding direct-to-consumer channels. Constellation Brands expects its wine and spirits division to regain momentum and achieve stronger results in the coming years.
It is worth noting that in the previous quarter, Constellation Brands reported a rise in beer sales, primarily due to stable consumer demand and higher pricing. This consistency in consumer interest and favorable pricing likely contributed to the company’s overall positive performance.
As Constellation Brands continues to navigate the ever-evolving beverage market, it remains committed to delivering quality products and ensuring a satisfying experience for its consumers.
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