Alcoholic beverages giant Constellation Brands Inc. reported a better-than-expected fiscal Q2 profit Thursday and raised its full-year earnings outlook. The manufacturer of Ravenswood wine and Corona beer posted net income of $72.1 million ($0.33/share) for the quarter versus $68.4 million ($0.28) a year ago (see earnings call transcript). Excluding expenses, profit was $0.35. Sales fell 32% to $892.6 million on an accounting change. Analysts were expecting EPS of $0.32 on $878.8 million in revenues. Constellation raised its full-year EPS guidance, excluding items, to $1.34-1.42 from a prior forecast of $1.30-1.40, in part because of a lower-than-expected tax bite. The Street had forecast an average $1.39. The company pushed high-end wine like Woodbridge during Q2 and raised prices on Corona to compensate for inventory cuts by wholesalers, which totaled $110 million this year. "Wines at the higher price points have done better, and Constellation is getting a benefit from that," said D.A. Davidson & Co. analyst Tim Ramey. Volume on Svedka, acquired in March, was up 50% in H1. Spirit sales were up 25% in Q2, partly on demand for Svedka. Wine generates 70% of Constellation's sales, beer 25% and spirits the remainder.
Sources: Reuters, Bloomberg, MarketWatch, Thomson Financial
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