Apr. 09 - Constellation Brands' big bet on beer is paying off, as strong sales of Corona Extra and Modelo Especial drives market share gains. Fred Katayama reports.
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Brouhaha over beer at Constellation Brands.
The alcoholic drinks maker's big bet on beer helped nearly double its quarterly profit. And it grabbed market share with strong sales of Corona Extra and Modelo Especial. Mexican beer is extremely popular in the U.S. That made Constellation's move particularly timely. It acquired those Mexican brands last summer when it bought full control of Grupo Modelo's U.S. business and a key brewery just south of the border.
The company also produces wines and spirits under labels like Mondavi and Svedka. Those sales rose just slightly.
It sees growth of beer sales outpacing wine this year as well, and its profit outlook outpaced analysts forecasts.
RBC analyst Nik Modi sees sustainable growth that'll partly be driven by "share gains in the U.S. beer category by capitalizing on opportunities from the increased Hispanic population."
Investors toasted the results, bidding Constellation's lofty shares even higher at the market open. Constellation's stock has risen 15 percent this year after nearly doubling last year. That's got to make investors "hoppy."
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