- Second-quarter sales slip 3.6% to US$2.26bn
- Sales for beer in three months to end of August inch up 1% to $1.64bn
- Wine & spirits down 11% at $624.5m
- Six-month group sales dip 4.9% to $4.22bn
Constellation Brands has seen the second quarter of its current fiscal year bounce back after a tough Q1 when the COVID impact was more keenly felt.
The multi-category group, which owns the Corona beer brand in the US, said earlier today that sales in the three months to the end of August were down 3.6% on the corresponding period a year earlier. The performance represents an improvement on the first quarter, however, when the top-line declined by 6%.
Subsequently, half-year sales decreased by just under 5%.
Constellation Brands Fiscal-2021 – Sales versus 2020
Source: Company results
Constellation’s beer business, the company’s main growth driver, posted a 1% lift in the quarter, again improving on Q1, when sales slid 4%. However, the combined operations in wine and spirits have less reason to be cheerful, falling 11% in Q2. Although the wine and spirits numbers were affected by last year’s divestment of Canadian whisky brand Black Velvet, sales once the brand was stripped out still fell, by 9%.
Back to beer, and the group boasted about a “strong performance” in the US off-premise, which continued to “more than offset” sales in the on-premise, a channel that continues to struggle to deal with measures designed to curb the spread of COVID-19. The Corona portfolio was bolstered by its hard seltzer extension, which “has exceeded expectations”, as well as growth from Corona Premier and Corona Extra.
A renewed focus on driving value in wine, exemplified by the pending divestment of a raft of volume-play brands to E&J Gallo, resulted in double-digit sales increases for the Kim Crawford, Meiomi and The Prisoner brands, while much was made about Constellation’s “innovation pipeline”. The company is set to roll out added varietals for The Prisoner and Meiomi as well as RTDs from Svedka and High West in the coming weeks.
Constellation Brands Second-Quarter Fiscal-2020 – Sales by Segment
Source: Company results
CEO Bill Newlands
“Despite the ongoing challenges of the pandemic, we delivered excellent Q2 results, as we continued to invest in brands and capabilities to drive sustainable long-term growth.
“We remain confident in the resiliency of our business, our brand health and consumer takeaway remain strong, and we are well-positioned to deliver a solid year of organic growth in fiscal-2021.”
To access Constellation Brands’ official Q2 and H1 results statement, click here.