Jose Cuervo Q3 boosted by price increasesBy Nicola Carruthers
Mexican-based drinks group Jose Cuervo has reported a 24.3% net sales increase in its third quarter of 2017, driven by selective price increases and volume growth in all regions.
The Tequila-maker reported its net sales had increased to 5,765 million pesos (about US$31m) in the three months leading to the 30 September 2017.
The US and Canada region represented 63.2% of total net sales for the company.
Net sales in this region increased 28.5% versus the same period last year, largely explained by volume growth and the January price increase, and partially offset by the foreign exchange rate.
Operating profit decreased 5.3% to $1,143 million pesos (about US$59m) due to pressure on production costs related to third party agave purchases, as well as the lower advertising, marketing and promotion (AMP) in the prior year due to seasonality experienced during the third quarter of 2016.
Operating profit during the first nine months of 2017 increased by 15.5% against the same period last year, which represents 27.2% of net sales.
Net Sales of Jose Cuervo Tequila represented 36.7% of total net sales for the third quarter of 2017 and reported an increase in its net sales of 32.4%.
The company’s other Tequila brands represented 23.1% of total net sales and increased by 18.6% compared to the prior year.
Other spirits brands, including Irish whiskey brand Bushmills, represented 20.4% of total net sales in the period with a 25.7% increase.
Net sales of ready-to-drink represented 7.1% of total net sales and reported an increase of 7.9%.
“We delivered strong third quarter net sales growth of 24.3% on volume growth of 15.2%,” the company said in a statement.
“Volume growth was strong in all major regions and across categories. The US and Canada reported significantly accelerated growth as sales trends have begun to normalize after the effects of the price increase earlier this year, while Mexico growth remained robust. We are well positioned for the seasonally strong fourth quarter.”
In February this year, Jose Cuervo International sold around US$790 million-worth of shares in an initial public offering, according to reports.