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MEXICO CITY (Reuters) -Mexican distiller Becle, the world’s largest tequila producer, narrowed down its forecasts for its 2023 sales growth, an executive said on Thursday, after profits slumped over the first three months of the year.
Becle, which produces the popular Jose Cuervo tequilas, now forecasts annual growth in the high single digits, down from a February guidance for “high single digits to low teens.” In an earnings call, executives said they wanted to proceed with caution.
“We just wanted to be cautious on the performance for the rest of year … on an FX neutral basis, knowing what we already know about the first quarter,” Chief Financial Officer Fernando Suarez Gerard said.
Becle posted a nearly 10% slump in first-quarter net profit this week as price increases failed to cushion negative currency exchange effects, high inflation and supply chain issues in Latin America.
Executives on Friday added it was too early to assess the impact of recent price increases in places like Mexico.
The company also said on Friday it would be launching a share buyback program of up to 2 billion pesos ($111 million) at a shareholder meeting later today, as well as a proposed cash dividend payment of 0.49128 peso per share.
In afternoon trading, Becle’s share price was down nearly 5%.
Becle, based in Mexico City, sells Jose Cuervo family tequilas as well as Creyente and 400 Conejos mezcal, Stranahan’s whiskey, Three Olives vodka, Boodles gin and Kraken rum.
While the industry has struggled with extended shortages of glass, used to bottle spirits, Becle executives said these appeared to be easing and should have limited performance impact for the remainder of 2023.
“We are still not out of the woods yet, but we don’t think there should be a very big impact on our portfolio performance due to supply chain this year,” said Olga Limon Montano, Becle’s managing director for Mexico and Latin America.
($1 = 17.9925 Mexican pesos)
