Constellation Brands reported its fiscal 2016 results. The company generated consolidated net sales growth of 9 percent.
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This reflects organic net sales growth on a constant currency basis of eight percent and acquisition benefits from Meiomi and Ballast Point, partially offset by unfavorable currency impact.
Organic net sales for beer increased 13 percent primarily due to volume growth and favorable pricing. Beer depletions grew 12 percent, reflecting strong consumer demand for the beer portfolio.
"The exceptional marketplace results and market share gains delivered by our beer business were driven by Modelo Especial and Corona Extra, and complemented by the solid growth of our remaining stable of beer brands. This performance reflects ongoing excellent commercial execution and best-in-class brand marketing initiatives," said Sands.
Wine and spirits organic net sales on a constant currency basis increased three percent.
This primarily reflects volume growth and favorable mix. Fiscal 2016 net sales benefited from the overlap of a planned U.S. distributor inventory destocking during fiscal 2015, partially offset by the overlap of a "make-whole" distributor payment associated with this activity.
For the year, consolidated comparable basis operating income increased 18 percent.
Beer operating income increased 24 percent primarily due to organic volume growth, favorable pricing and lower cost of product sold, partially offset by increased marketing spend.
The eight percent increase in wine and spirits operating income primarily reflects the benefit of the Meiomi acquisition, lower cost of product sold and organic volume growth, partially offset by higher marketing spend.
For the year, pre-tax comparable adjustments totaled $77 million as compared to $87 million for the prior year. Interest expense for the year totaled $314 million, a decrease of seven percent. The decrease was primarily due to lower average interest rates.
The comparable basis effective tax rate for fiscal 2016 was 29.6 percent compared to 29.5 percent for fiscal 2015.
Constellation Brands has agreed to acquire The Prisoner Wine Company's portfolio of brands from Huneeus Vintners, a fine wine company.
The portfolio includes five fine wine brands led by The Prisoner, a fast growing super luxury wine, and also includes Saldo, Cuttings, Blindfold and Thorn. The transaction is expected to close by the end of April. ■