Is the liquor industry recession proof?
Two wineries’ earning results indicate very different answers. Constellation Brands, the largest alcohol maker in the world, saw
more consumers enjoying cocktails despite a troubled economy. The company’s Q1 profit increased 56.4% to $46.6 million, or
$0.20 per share, while sales increased 3.4% to $931.8 million. Excluding one-time restructuring and acquisition-related charges,
Constellation said its net income on a comparable basis rose to 34 cents. In comparison, analysts had expected EPS of $0.31 on sales of $906.1 million. Management has uncorked profits by raising prices and focusing on high-margin wine brands.
In recent years, Constellation has swapped some of its value brands (ie. Almaden and Inglenook) for premium wine brands (ie. Clos du Bois, Wide Horse and Geyser Peak).
In the meantime, its import beers, such as Corona and St. Pauli Girl, have gained popularities.
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