Constellation Brands (NYSE: STZ) ended fiscal 2020 on a positive note. The owner of popular imported beer franchises including Corona, Modelo, and Pacifico said on Friday that sales growth sped up in the year's final months, just before COVID-19 began impacting the industry.
Depletions, a measure of consumer demand, rose 11% in the fourth quarter thanks to strong demand for both the Modelo and Corona brands. The company said its Corona hard seltzer launch was well received while demand for Modelo Especial spiked 18%. On the downside, Constellation Brands reported higher advertising sales, which hurt profitability, and the struggling wine segment continued to shrink.
Executives offered no projection about how the coronavirus and related bar and restaurant closings might impact sales in fiscal 2021, which began on March 1. Yet the company said it has a strong financial position, with access to $2 billion of credit and an extra $850 million on the way from its wine and spirits divestment.
"In this time of uncertainty," CFO Garth Hankinson said in a press release, "we believe we have ample liquidity and financial flexibility." Constellation Brands is "focused on prudently navigating the challenging operating environment presented by COVID-19," executives said.
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