Constellation hails double-digit Q1 growth

US drinks group Constellation Brands has celebrated a “great start” to its financial year after reporting double-digit net sales and income growth in Q1.

Paul Masson producer Constellation Brands has hailed double-digit growth

The Svedka Vodka and Paul Masson Grande Amber Brandy saw report net sales grow 15% in first quarter of fiscal 2017, hitting US$1.87 billion, while operating income soared 29% to US$553 million.

Constellation benefited from the acquisition of the Ballast Point beer brand and Meiomi wine label, as well as the Cinco de Mayo and Memorial Day holidays.

“With sales and net income up double digits, our first quarter results are setting the stage for fiscal 2017,” said Rob Sands, president and chief executive officer, Constellation Brands.

“We’re off to a great start due to our ability to effectively integrate and grow our recently acquired brands, increase margin across the portfolio, and drive consumer demand through our best in class marketing and sales execution efforts for our core, higher margin, premium brands.

“We also completed a significant expansion milestone at our Nava brewery, bringing our total current capacity to 20 million hectoliters.”

Constellation’s wine and spirits brands increased net sales by 8%, reflecting the acquisition of Meiomi. Its total operating cash flow totaled $346 million, an increase of 68 percent.

“We are pleased with our strong operating cash flow results during the first quarter and remain focused on achieving our full year goal of generating US$1.5 to US$1.7bn of operating cash flow.

“Due to significant ongoing investments in our beer operations, we continue to target free cash flow in the range of $250m to $350m for fiscal 2017.”

In its fiscal 2017 year, Constellation expects its wine and spirits business to grow in the mid-single-digit range and for operating income to grow in the mid- to high-single-digit range.

At the start of this year, Constellation acquired a minority stake in the recently reopened Nelson’s Green Brier Distillery through its new investment arm, Constellation Ventures.