MEXICO CITY, Oct 28 (Reuters) – Mexico’s Becle, the world’s biggest tequila maker and owner of Jose Cuervo, reported a steep drop in third-quarter profit on Wednesday, missing market expectations as weaker demand, a stronger peso and a tougher selling environment weighed on results.
Net profit plunged 85% from a year earlier to 633 million pesos ($35 million), well below the 1.07 billion pesos forecast by analysts polled by LSEG.
• The weak quarter adds to concerns that the tequila boom may be losing some momentum, especially in the United States, Becle’s most important market
• Revenues fell 15% to 9.25 billion pesos, also missing the LSEG estimate of 9.96 billion pesos
• Volumes fell 9% to 5.7 million nine-liter cases
• In the United States and Canada, volumes slipped 3%, though Becle said trends improved from earlier in the year as changes to its distributor network moved forward
• In Mexico, volumes dropped 12%, largely because of the sale of the b:oost energy drink brand
• In the rest of the world, volumes fell 20%, mainly because some shipments were delayed into the fourth quarter
• Volumes of Jose Cuervo – which made up for more than a third of the firm’s total volumes in the quarter – fell 11% from a year earlier
• The company said results were also hurt by the stronger Mexican peso, which reduced the value of overseas sales when converted back into the local currency
($1 = 18.0808 pesos at end-September)
(Reporting by Natalia Siniawski; Editing by Kylie Madry)
