Constellation Brands Q3 Net Sales Decreases
Published:07-January-2010
By Staff Reporter
Constellation Brands has reported consolidated net sales of $987.7m for the third quarter of fiscal 2010, a decrease of 4% compared to $1,031.2m for the same quarter previous year.
The decrease was primarily due to the impact of the value spirits divestiture, partially offset by the favorable impact of year-over-year currency exchange rate fluctuations.
Operating income for the quarter was $134.6m compared to $197.7m for the previous year quarter. Net income for the quarter was $44.1m or $0.20 per share, a decline of 47% compared to $84.5m or $0.38 per share for the prior year quarter.
The branded wine organic net sales on a constant currency basis were even compared to last year and included a 3% decrease in North America offset by increases of 12% in Europe and 2% in Australia/New Zealand. The sales increase in Europe was primarily due to higher volumes of lower priced products.
Total spirits organic net sales decreased 2% for the quarter. The decrease was primarily due to a difficult comparison compared to third quarter for fiscal 2009. Spirits organic net sales for the first nine months of fiscal 2010 increased 18% with Svedka vodka net sales increasing more than 40%.
Wines segment operating income decreased $22m compared to the prior year third quarter. This is primarily due to the decrease in US wine sales, divestiture of the value spirits business and a decrease in operating income from the international business.
For the nine month period net sales was $2.66bn compared to $2.92bn for the corresponding period prior year. Operating income for the period was $356.3m compared to $309.9m for the same period last year. Net income for the period was $150.3m compared to $105.4m for the prior year period.
Rob Sands, president and chief executive officer of Constellation Brands, said: "During the quarter, we continued to execute well against our strategic goals of generating cash, paying down debt and reducing costs.
“US branded wine net sales were impacted by continuing economic challenges, higher levels of promotional spending in advance of the holiday selling season, and the expected shift of sales to the second quarter from the third quarter as part of our US distributor network consolidation activities. But, we began to see improving depletion trends later in the quarter."
