Alcoholic drinks company Constellation Brands reported a stronger-than-expected quarterly profit Thursday and raised its full-year earnings outlook, helped by higher sales of branded wine and spirits.
The owner of Robert Mondavi, Vendange and Ravenswood wines reported net income of $72.1 million, or 33 cents per share, for its fiscal second quarter, ended Aug. 31, compared with $68.4 million, or 28 cents per share, a year earlier.
On a comparable basis, the company said it earned 35 cents per share, down from 43 cents per share a year before. But it beat analysts' average estimate of 32 cents per share, excluding items, according to Reuters Estimates.
Net sales fell 37 percent to $892.6 million from $1.42 billion in the prior-year period, as the company recently changed the way it reports revenue for its Crown Imports and Matthew Clark wholesale business joint ventures. Before excise taxes, sales fell to $1.17 billion from $1.71 billion.
The company also said its results were hurt by ongoing softness in Britain, which has been flooded with cheap Australian wine because of an oversupply of grapes, and its strategy of reducing the amount of wine inventory it ships to U.S. distributors.
Sales of the company's spirits, which include Svedka vodka, 99 Schnapps and Meukow Cognac, rose 25 percent, while branded wine sales rose 3 percent. But these gains were overshadowed by the loss of revenue from the imported beer segment and an 82 percent decline in wholesale sales.
In part because of a slightly lower-than-expected tax rate the company raised its full-year outlook, saying it now expects to earn $1.34 to $1.42 per share, excluding items, compared to a prior forecast of $1.30 to $1.40 per share.
Analysts on average had been expecting $1.39 per share, excluding items, according to Reuters Estimates.