Beer Business Drives Strong First-Quarter Profits for Constellation Brands

Constellation Brands exceeded Wall Street expectations for first-quarter profit, driven by strong demand for its core beer brands. Despite a slowdown in its wines and spirits business, the company maintained its annual forecasts. Shares of the company rose nearly 3% in premarket trading following the positive results.

The company’s beer business, which includes popular brands like Modelo Especial and Pacifico, experienced a 6.4% increase in volume growth. This growth, coupled with aggressive price increases and lower marketing expenses, helped offset challenges from rising raw material and packaging costs. Constellation Brands also saw its operating margin in the beer business increase to 40.6%.

Despite these challenges, Constellation Brands remains optimistic about the future of its core beer brands. The company reported a comparable profit of $3.57 per share for the quarter, surpassing analysts’ estimates. However, net sales slightly missed expectations at $2.66 billion, primarily due to subdued demand for premium wines and spirits.