Stung by sluggish sales in bars and restaurants, revenue from its branded wines fell 3 percent in the key North American market.
Beer sales in its Crown Imports wholesale business joint venture with Mexican brewer Grupo Modelo SA fell 10 percent to $499 million and operating profit dropped 26 percent to $91 million. Sales of spirits fell 2 percent, hit by the divestiture of the value spirits business.
“The company’s results were decent given consumer weakness,” said Gimme Credit analyst Kim Noland. She credited its efforts this fiscal year to lower debt by $336 million to $4.1 billion and “initiate a global cost-cutting program appropriate in the current recession.”
The new mechanism aimed to indirectly link domestic prices to global crude prices “in a controlled manner”, after domestic refiners suffered huge losses because of a gap between government-set retail prices and soaring global crude prices.
The benchmark price of gasoline currently sits at 7,100 yuan a tonne and that of diesel 6,360 yuan a tonne, after five price rises and four cuts in the past year.
Based in Victor, 20 miles southeast of Rochester, the company sells about 70 wine brands and liquors such as Paul Masson brandy and Black Velvet Canadian whiskey. It also imports beers such as Negra Modelo from Mexico, Tsingtao from China and St. Pauli Girl from Germany.
After a two-decade acquisition spree, the company sold off cheaper “value” brands to focus on the more lucrative premium end of the wine and spirits markets. Over the last year, its work force fell to 6,600 from 8,000 as it ditched wineries and product lines and consolidated its distribution network.
Excluding one-time costs, Constellation said it earned 54 cents a share, which was 2 cents a share above the average Wall Street estimates. Analysts surveyed by Thomson Reuters also expected lower net sales of $905.3 billion.
Tags: china, china wholesale, wholesale
0