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Constellation Brands beats estimates, posts weak outlook
Beverages firm Constellation Brands reported increases in sales and earnings per share last quarter, but issued weaker-than-expected guidance for the next fiscal year. Its net sales increased by 1% to US$2.16 billion in the fourth quarter of its 2025 fiscal year, surpassing Zacks estimates of $2.13 billion. Its comparable diluted net earnings per share were $2.63, above estimates of $2.28. “In a tough socioeconomic environment we are taking decisive actions designed to continue to support our industry-leading Beer Business, reset our cost base, and redefine our portfolio,” according to Constellation Brands. “In fiscal 2025, despite a softer consumer demand backdrop largely driven by what we believe to be non-structural socioeconomic factors, we continued to deliver Enterprise net sales growth, realised substantial comparable operating margin improvement, and achieved double-digit comparable EPS growth.” “Looking ahead, while we expect these non-structural socioeconomic factors affecting consumer demand to gradually stabilise and subside, we remain focused on driving distribution gains, launching disciplined innovation, and deploying incremental marketing investments to support the growth of our Beer Business while continu
Wine
Treasury Wines tanks after H1 result disappoints
Shares in Treasury Wine Estates (ASX: TWE) were around 5% lower in afternoon trading after the winemaker warned investors A) that underperforming commercial wines will continue to be a drogue on profitability and B) cutting its earnings guidance. While earnings were 1% above consensus, net profit after tax missed consensus by 9%. Within its interim update today, the winemaker told the market to expect earnings for FY25 to be around $780 million, at the lower end of the previously guided range of $780 million-$810 million. These two salvos dished up to the market this morning appear to have eclipsed what was an otherwise reasonable result which included a 17% rise in the dividend to 20 cents per share. Rising sales for flagship luxury brand Penfolds and recently acquired high-end Californian winemaker Daou Vineyards drove a 33% uplift in interim profit to $220.9m on the back of a 19.6% increase in 1H FY25 revenue to $1.57bn. Other key results include: Pre-tax earnings, up 35% to $391.4 million. Net sales revenue per case, up 16.1%. Penfolds division increased earnings by 34% to $250.2 million. Treasury America earnings, up 66.9% to $155.3 million, sales up 41%. Treasury America’s luxury portfolio declined
Wine
No stout to tout: British pubs running out of Guinness
The effects of Guinness supply limitations are being felt far and wide, as some British pubs are reporting running out of the iconic Irish stout this week. Guinness's owner Diageo announced last week that it was limiting how much pubs can buy because of "exceptional consumer demand" in Great Britain. The limits only apply to pubs in England, Wales and Scotland, not the Republic of Ireland or Northern Ireland. The Liffey pub in Liverpool usually touts Guinness as their top seller, but has been without the alcoholic drink since the middle of last week. It is one of several pubs up and down the country, saying they have run dry, with some managing to restock but uncertain of how long their stocks will last, especially in the lead up to the festive season. The supply shortage has been accredited to a boost in the popularity of Guinness in the last couple of years, with the beer getting a facelift to its image as it became more popular with young people and women. According to CGA while beer sales in the UK declined 0.5% from July to October of this year, across the same period sales of beer increased by 23.2% for Diageo and sales of Guinness kegs in particularly grew by 20.9%.
Wine
Australian Vintage welcomes back Craig Garvin as CEO
The Board of Australian Vintage Limited (ASX: $AVG) has appointed Craig Garvin as Chief Executive Officer effective from Monday, 14 October 2024. In May this year, the AVL Board terminated Garvin’s contract for “engaging in conduct that, in its view, displayed a lack of judgement and was inconsistent with the values of the company”, and that Garvin’s conduct was not in line with the “high standards expected of [the] Chief Executive Officer”. AVG Chairman James Williamson told the AFR he had no issue with rehiring Garvin. “We have looked at it as a board with a fresh set of eyes,” he said. “People are happy that we can close this chapter.” A release on the AVG site quotes Williamson as saying: "The new Board of Australian Vintage is pleased to welcome Craig back to AVG. His appointment follows an external search that considered a number of exceptional candidates. After a thorough review of the circumstances and processes surrounding his departure from Australian Vintage in May, the Board felt it was important for Craig to be involved in the search process.” “Craig’s track record at AVG, his leadership style and deep understanding of our industry and our partners make him the right person to lead the company. He is a
Wine
Will CEPA unlock next wave of Australian wine investors?
Negotiations on the Australia-United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA) have concluded, marking a significant milestone for the wine industry. The trade agreement opens new avenues for Australian exporters to penetrate the Middle Eastern market, which boasts approximately 58 million consumers and a combined GDP of AU$1.4 trillion. Australia is the second-largest exporter of wine to the UAE by volume, according to IWSR data. The UAE is a crucial emerging market for Australian wine, acting as a pivotal hub for international trade. “The UAE is a vital market for Australian wine, and we are excited about the continued growth opportunities this agreement brings,” said Lee McLean, Chief Executive of Australian Grape & Wine. “The Australia-UAE CEPA offers a platform for ongoing dialogue and cooperation on technical matters to further strengthen trade relations between our countries.” Australian Grape & Wine has commended the Australian Government for achieving this milestone and thanked Ministers Farrell, Watt, and Collins, along with their departments, for their dedicated efforts in securing the agreement. Two-way investment between Australia and the UAE totaled $20.6 billion in 2023, wit