Constellation Brands results top estimates on strong Modelo Especial sales

(Reuters) – Constellation Brands (NYSE:) first-quarter results topped Wall Street expectations on Friday, as the Corona beer maker benefited from higher pricing and steady demand for its alcoholic beverages.

Alcohol manufacturers have increased prices to offset soaring costs of raw material, freight, packaging as well as rising wages and overhead expenses.

Constellation’s beer business posted an 11% increase in sales in the quarter ended May 31, mainly on strong growth across Modelo Especial, the Modelo Chelada brands as well as Corona Extra.

Modelo Especial dethroned Anheuser-Busch InBev’s Bud Light as the top selling beer in the U.S. in June after the latter faced backlash over a social media promotion with transgender influencer Dylan Mulvaney.

Constellation net sales rose more than 6% to $2.52 billion, beating analysts’ average estimate of $2.47 billion, according to Refinitiv IBES data.

The company has banked on its premium-yet-affordable offerings such as Kim Crawford wine and High West whiskey to push sales at a time when inflation-hit consumers have been tightening their purse strings.

Constellation reiterated its annual adjusted profit per share forecast of $11.70 to $12.00 as steeper costs dented its beer segment operating margins by 220 basis points in the reported quarter.

Shares were down 1% in premarket trading.

The company’s first-quarter profit of $2.91 per share beat analysts’ average estimate of $2.83 as per IBES data from Refinitiv.