Constellation Brands 1Q Sales Rise While Margins Contract

By Dean Seal

Constellation Brands logged a 6% jump in sales during its fiscal first quarter while its profit fell as higher costs ate into margins.

The Victor, N.Y.-based maker of beer, wine and spirits posted a profit of $135.9 million, or 74 cents a share, in the quarter ended May 31, compared with $389.5 million, or $2.06 a share, in the same quarter a year ago.

Stripping out one-time items, adjusted earnings were $2.91 a share. Analysts polled by FactSet had been expecting $2.83 a share.

Revenue rose to $2.51 billion from $2.36 billion, above analysts forecasts for $2.47 billion, according to FactSet.

The Victor, N.Y.-based company said its beer business delivered 11% sales growth and 5.5% jump in depletions thanks to continued momentum in its Modelo brand family.

Margins meanwhile fell as the sales growth was offset by higher raw materials and marketing spend, along with an increase in incremental depreciation and operating costs from brewery capacity expansions.

Shares slid 1.1% to $244 in premarket trading.

Write to Dean Seal at [e-mail]

(END) Dow Jones Newswires

June 30, 2023 08:14 ET (12:14 GMT)

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