Constellation Brands beats quarterly profit estimates on strong beer business

(Reuters) - Corona beer maker Constellation Brands on Wednesday beat Wall Street estimates for first-quarter profit, helped by strong demand for its core beer brands, which offset the sluggish wines and spirits business.

Shares of the Victor, New York-based company, which maintained its annual forecasts, were up nearly 3% in premarket trading.

The company has seen persistent demand for its core beer brands, including Modelo Especial and Pacifico, although its wines and spirits business, along with the broader consumer industry, saw a slowdown in the United States.

Constellation's beer business, a major revenue contributor, saw a 6.4% depletion in volume growth – the rate at which products are sold – compared with a 5.5% growth last year.

Benefits from aggressive price hikes over the past quarters, lower marketing expenses, and sales growth have helped the company cushion the blow from lingering raw material and packaging costs.

Constellation's operating margin in its beer business rose 260 basis points to 40.6%.

The company reported a comparable profit of $3.57 per share for the quarter ended May 31, beating analysts' estimates of $3.46 per share, as per LSEG data.

It posted net sales of $2.66 billion, slightly below estimates of $2.67 billion, owing to tepid demand for its premium wines and spirits.

(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Tasim Zahid and Shailesh Kuber)