Constellation Brands reports 3% rise in net sales despite challenges in wine, spirits segment

USA – Constellation Brands, a leading global beverage alcohol company, has reported a 3 percent increase in net sales for the nine months ended November 30, 2024, reaching US$8,044.5 million, compared to US$7,822.6 million during the same period last year.  

The growth was driven primarily by the beer segment, offsetting declines in the wine and spirits division. 

Operating income for the period dropped to US$505.2 million from US$2,540.3 million in the previous year, primarily due to a US$2,250.0 million goodwill impairment in the Wine and Spirits segment.  

Similarly, net income attributable to Constellation Brands fell to US$293.9 million, compared to US$1,335.0 million the prior year, reflecting the goodwill impairment and a reduction in Wine and Spirits sales. 

The Beer segment reported robust performance, with net sales increasing to US$6,835.4 million from US$6,459.8 million. Growth in shipment volumes and favorable pricing were cited as key factors behind this rise.  

In contrast, the wine and spirits segment experienced a decline in net sales, falling to US$1,209.1 million from US$1,362.8 million due to reduced branded shipment volumes. 

President and CEO Bill Newlands highlighted the company’s ongoing efforts in the beer segment despite subdued consumer spending.  

“Our Beer Business delivered a sequential increase in our depletions growth rate in Q3, supported by incremental marketing investments and focus on key growth drivers,” Newlands said. 

Amid ongoing economic uncertainty, Constellation revised its annual growth outlook. The company now forecasts net sales growth between 2% and 5%, down from the previous projection of 4% to 6%.  

Additionally, adjusted profit per share is expected to range between US$13.40 and US$13.80, slightly lower than earlier estimates. 

In December, Constellation announced plans to sell its Svedka vodka brand to Sazerac, a New Orleans-based spirits company, as part of efforts to reshape its Wine and Spirits portfolio.  

The value of the transaction was not disclosed, but it is expected to close in the coming months, pending regulatory approvals. 

The company’s stock recently dipped alongside other liquor makers following the U.S. Surgeon General’s call for cancer warning labels on alcoholic beverages, signaling potential regulatory challenges ahead. 

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