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Alcohol manufacturers have increased prices to offset soaring costs of raw material, freight, packaging as well as rising wages and overhead expenses.
Constellation’s beer business posted an 11% increase in sales in the quarter ended May 31, mainly on strong growth across Modelo Especial, the Modelo Chelada brands as well as Corona Extra.
Modelo Especial dethroned Anheuser-Busch InBev’s Bud Light as the top selling beer in the U.S. in June after the latter faced backlash over a social media promotion with transgender influencer Dylan Mulvaney.
Constellation net sales rose more than 6% to $2.52 billion, beating analysts’ average estimate of $2.47 billion, according to Refinitiv IBES data.
The company has banked on its premium-yet-affordable offerings such as Kim Crawford wine and High West whiskey to push sales at a time when inflation-hit consumers have been tightening their purse strings.
Constellation reiterated its annual adjusted profit per share forecast of $11.70 to $12.00 as steeper costs dented its beer segment operating margins by 220 basis points in the reported quarter.
Shares were down 1% in premarket trading.
The company’s first-quarter profit of $2.91 per share beat analysts’ average estimate of $2.83 as per IBES data from Refinitiv.
