NEW YORK (Reuters) - Constellation Brands Inc
The company, which also sells spirits and beer, affirmed its profit outlook for fiscal 2009.
Net income rose to $44.6 million, or 20 cents per share, in the first quarter, ended on May 31, from $29.8 million, or 13 cents per share, a year earlier.
Excluding restructuring costs, acquisition-related expenses and other items, the maker of Robert Mondavi wine and Svedka vodka said it earned 34 cents per share, beating analysts' average forecast of 31 cents, according to Reuters Estimates.
Net sales rose to $931.8 million from $901.2 million.
Net sales increased 24 percent in the branded wine unit, boosted by double-digit market growth in the United States for lines such as Simi and Kim Crawford. Driven primarily by Svedka, sales in the spirits unit rose 9 percent.
Operating income rose $58 million in the wines segment, but were down $5 million in the spirits unit, as the company cited higher investment behind premium brands, planned marketing increases and higher raw material costs.
Citing expectations for slowing U.S. spirits volume growth, UBS analyst Kaumil Gajrawala said Constellation "may need to accelerate marketing spending through (calendar year 2008) to drive volume."
"For wine, we have not yet seen any macro-economic impact, and we continue to see trading up," Gajrawala said in a note.
Constellation has been trying to realign its wine business. It recently sold value brands like Inglenook and Almaden and bought more expensive ones like Clos du Bois.
The company also imports Corona and Negra Modelo beers through a joint venture with Grupo Modelo
Constellation's joint venture with Modelo "remains intact" for the initial agreement period, which runs through December 31, 2016, Chief Executive Rob Sands said during a conference call.
Constellation stood by its earnings forecast for fiscal 2009, which ends in February. In June it had forecast profit of $1.68 to $1.76 a share, excluding special items.
The company expects net sales for the year to increase in the mid-single-digit percentage range.
Constellation shares were up $1.14, or 5.7 percent, at $21.00 on the New York Stock Exchange. The stock has traded as high as $26.46 and as low as $17.21 in the past year.
(Reporting by Aarthi Sivaraman; Editing by Brian Moss and Lisa Von Ahn)