Constellation Brands said net profit soared 33% $318 million, or $1.55 a share, in the first quarter on a 15% sales gain to $1.872 billion.
Net sales for beer increased 19 percent. This was primarily due to a 15 percent increase in organic net sales driven by volume growth and favorable pricing.
“We successfully kicked off our ‘120 Days of Summer’ selling season by posting depletion growth of almost 10%. At retail, Constellation was the #1 share gainer in the high-end segment of the U.S. beer market and won the Cinco de Mayo and Memorial Day holidays as the fastest growing among the top 5 suppliers. Ballast Point continues to achieve outstanding levels of growth, posting depletions of more than 60% in the first quarter,” said Rob Sands, president/ceo.
Wine and spirits net sales increased 8%, which primarily reflects the acquisition benefit of Meiomi and organic net sales growth on an organic constant currency basis of three percent driven by volume growth and favorable mix.
The U.S. wine business gained IRI dollar share and achieved strong earnings growth and margin expansion driven by high-end wine acquisitions and Constellation’s collection of Focus Brands. The Canadian wine business also posted solid results and continued to gain share across major market segments.
“We recently closed on The Prisoner acquisition and have successfully integrated this collection of super-luxury wine brands into our portfolio. Our other high-end wine acquisition, Meiomi, posted IRI dollar growth of more than 90% during the quarter and achieved double digit depletion growth along with several of our other Focus Brands including Kim Crawford, Black Box, Clos du Bois, Ruffino, Mark West and Woodbridge by Robert Mondavi,” said Sands.
Beer operating income increased 22%, primarily due to organic volume growth, favorable pricing and benefit from the Ballast Point acquisition. The 17% increase in wine and spirits operating income primarily reflects the benefit from the Meiomi acquisition, organic volume growth and favorable mix.
Looking to the future, Constellation Brands said its beer business continues to expect net sales and operating income growth of approximately 14 – 17 percent. These growth rates include an estimated incremental benefit from the Ballast Point acquisition. For the wine and spirits business, the company continues to expect net sales growth in the mid single-digit range and operating income growth in the mid to high single-digit range. These growth rates include an estimated incremental benefit from the Meiomi and The Prisoner wine brands acquisitions.