Constellation Brands Inc. reports net sales rose 2.4% to $8.820.7 billion in fiscal 202022, ending Feb. 28. The company reported a $40 million loss compared to a $1.998 billion, or $10.44 Class A share, profit a year earlier.
The company said its beer business posted depletion growth of nearly
9%, marking the 12th consecutive year of volume growth, driven by
continued strong demand in off-premise channels, as well as a
return to growth in on-premise channels. When adjusted for two
extra selling days, generated approximately 8% depletion growth.
In IRI channels, the Beer Business significantly outpaced the total
beer category, the high-end segment, and was the No. 1 dollar share
gainer, adding 1.2 market share points, the company said. Modelo Especial achieved nearly 15% depletion growth and became the No. 2 beer brand and No. 1 share gainer in the entire U.S. beer category in dollar sales in IRI channels; Modelo Chelada posted depletion growth of over 30% and solidified its position as the No. 1 Chelada in the U.S. beer market. Corona Extra sustained its reinvigorated growth trajectory, reported depletion growth of 9%, and positioned itself as the No. 3 brand in the high-end.
Operating margin decreased 110 basis points to 40.0%, as benefits from favorable pricing, marketing as a percent of net sales, and mix were more than offset by increased COGS driven by obsolescence, higher brewery and material costs, and increased depreciation.
Turning to CBrands’ wine and spirits segment, the company said, “Increased focus on our higher-end price segments yielded benefits
as our fine wine and craft spirits portfolio achieved double-digit
net sales growth driven by The Prisoner and High West.
• Strong organic net sales growth was driven by favorable price and
double-digit shipment volume growth for Meiomi and
Kim Crawford, which also generated robust mix benefits.
• Meiomi cabernet sauvignon and Kim Crawford Illuminate
sauvignon blanc held the top two spots among new high-end
products released over the last two years in IRI channels.
• Operating margin decreased 180 basis points to 22.7%, as mix
benefits from divestitures and favorable price were more than
offset by increased marketing and SG&A spend as a percent of net
sales and increased COGS driven by freight and warehousing costs.