Constellation Brands, the producer of drinks such as Modelo beer and Svedka vodka, has reported that sales fell by 1% to $1.79 billion in the third quarter of its financial year.
Net income, however, rose to $491.1 million during this period, or $2.44 per share.
The company also repurchased 1.1 million shares of common stock for $224 million in this quarter, and it has now authorised a new $3 billion share repurchase scheme.
“Our new, multi-year $3 billion share repurchase programme, along with more than $200 million in share repurchases this quarter, demonstrates our confidence in our future growth prospects," said David Klein, Constellation's chief financial officer.
"We have significant capital allocation flexibility to invest in our business and return cash to shareholders, while remaining committed to our leverage target.”
Quarterly Performance
In the third quarter of the year, Constellation's beer business saw net sales increase 7.8% to $1.04 billion, driven by its Modelo and Corona brands.
Meanwhile, sales of wine and spirits fell by 10.3% to $759 million, impacted in part from the group's divestment from the Canadian wine business.
Looking ahead, for the 2018 fiscal year, the company says that its beer business continues to target net sales growth in the range of 9-11%, however, for its wine and spirits business, it is expecting sales to decrease in the range of 4-6%.
Overall, Constellation expects that its end-of-year results will be at the lower end of previous estimates.
“It’s been a dynamic time for our business," said Rob Sands, president and CEO of Constellation.
"In 2017, Constellation was one of the best performers among S&P 500 Consumer Staples stocks driven by the overall strength of our results and the ongoing growth prospects for our business."
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
