Surging sales of Mexican beer helped Constellation Brands trounce Wall Street estimates with its latest results.
Now the alcohol giant looks to keep the growth streak going with a lighter version of Corona, taking direct aim at Michelob Ultra. The new Corona Premier, which has 2.6 grams of carbs and 90 calories per 12-ounce container, is debuting this quarter.
The Mexican brew will get a “significant” TV advertising push in the first half of the year, Constellation said when it released fourth-quarter earnings on Thursday.
The company, whose brands include Robert Mondavi wine and Svedka vodka, has increasingly relied on its Mexican beer imports to generate US sales. Mexico exported 712 million gallons of beer to its northern neighbor last year, with Constellation accounting for much of that volume.
Its comparable earnings amounted to $1.90 a share in the fourth quarter, beating the $1.74 projected by analysts. Sales climbed to $1.77 billion, ahead of the $1.75 billion estimate.
That helped send the shares up as much as 3.6 percent to $228.50 in early trading on Thursday.
Constellation expects earnings of $9.40 to $9.70 a share this year. That compares with an estimate of $9.59. The company also boosted its quarterly dividend to 74 cents from 52 cents a share, a bigger increase than analysts expected.
The question now is whether Corona Premier can knock millennial favorite Michelob Ultra off its pedestal. That beer has been a bright spot for Anheuser-Busch InBev, with the brand’s market share growing for 10 straight quarters.
And Anheuser-Busch has been trying to shore up Michelob Ultra’s position. The company announced a version of the beer last month that’s made with organic grains, an attempt to win over the kind of shoppers who frequent Whole Foods.