Constellation Brands recorded a net sales increase of 10.1% in its third-quarter results thanks to the strong performance of its beer brands.
For the three months ended 31 August, net sales were $2.3 billion. Net income for the quarter was up 128.4% to $1.15 billion.
The company – which owns the Corona, Modelo and Ballast Point brands – posted a net sales increase of 10.5% in its beer portfolio. The beer business achieved record operating margin of 41.3%, an increase of ten basis points, as benefits from favourable pricing and operational performance were offset by higher transportation costs and
In its wine and spirits division – which consists of brands such as Svedka Vodka and Casa Noble Tequila – net sales benefited from “strong shipment volume growth” primarily due to timing.
Constellation CEO Rob Sands said: “The double-digit EPS growth we delivered in the second quarter is top-tier for consumer product companies. Constellation remains the high-end leader and the most significant growth contributor in the US beer market, and we’re seeing strong growth trends for the super-premium plus segment of our wine portfolio.
“Our $4 billion investment in Canopy Growth provides us with a strong foothold in the emerging global cannabis market, which could be one of the most significant growth opportunities of the next decade.”
In August, Constellation revealed it had increased its stake in Canadian cannabis firm Canopy Growth Corporation to 38%.
The investment is described as “a significant expansion” to their existing partnership, and represents Constellation’s ambition to become a leading player in cannabis beverages amid an increasingly favourable legislative landscape.
For fiscal 2019, Constellation Brands said its beer business continues to target net sales and operating income growth to be in the range of 9-11%.