Cuervo sees Q1 profits and volumes slide
Mexico-based drinks group and Jose Cuervo parent Becle saw its 2017 first quarter volume sales tumble 10.5% and net profits fall by a third following its IPO.
While Becle blamed price increases in the US and Canada for the volume falls, value sales climbed 1.8% to M$4.9 billion (US$263 million) for the quarter ended 31 March 2017.
Gross profits increased 8.4% over the period to M$3.2bn (US$171.5m), bolstered by price increases, product mix, and optimised agave sourcing.
The figures are one of the first indications of the company’s performance following its February 2017 IPO.
In terms of brands, Jose Cuervo accounted for 31.6% of total volumes yet saw 12.3% volume and 1.5% value declines. The wider Tequila portfolio, which accounted for 15.0% of volume sales, posted 3.5% value increases.
Other spirits, including Irish whiskey brand Bushmills, comprised 17.7% of the total volume with 6% declines and a 2.4% value uptick.
Net sales in the US and Canada fell 3.5%, with the region representing almost 68% of total sales. Mexico, which accounts for 19.5% of the total business, registered 18% gains, while the rest of the world climbed 10.9%.
“The first quarter progressed largely as expected, with volume growth impacted by anticipated purchases ahead of the January 1, 2017 price increase, particularly in the United States and Canada,” the company said in a statement.
The company also confirmed that it raised M$18bn (US$993.5m) in its February IPO, with 15.0% of the firm now in market hands.