Tequila giant Becle's Q2 profit plummets 62% as sales slump outside US, Canada (updated)

Becle SAB de CV

25/07/2024 24:31

(Updates with additional detail from report)
       MEXICO CITY, July 24 (Reuters) - Mexico's Becle, the
world's largest tequila producer, on Wednesday posted a 62.5%
drop in its second-quarter net profit, driven by falling sales
outside of the United States and Canada.
    In a filing to Mexico's main stock exchange, the producer of
the Jose Cuervo tequila brand reported a net profit for the
quarter of 497.8 million pesos ($27.2 million), from revenues
that ticked up 0.8% from a year earlier to 11.2 billion pesos.
    The company makes more than half of its sales in the United
States and Canada and just over a quarter in its home market. 
    While net sales in the U.S. and Canada market were up 11.2%
year-on-year, net sales in Mexico and the rest of world region
fell 10.7% and 12.2% respectively on falling volumes. 
        "In the first half of 2024, industry consumption
remained sluggish mainly due to macroeconomic challenges,
inflationary pressures and reduced commercial inventories in key
markets," Becle management said in the filing.
  
        In Mexico, volumes fell in the quarter as the market and
inventories contracted, while in the rest of world region, they
came down as merchants chipped away at already-high inventories,
Becle said.
  
    Becle makes the bulk of its income from tequilas but also
produces a range of spirits such as Creyente mezcal, Stranahan's
whiskey, Kraken rum and Boodles gin. 
        
  
        ($1 = 18.2862 Mexican pesos at end-June)
  

 (Reporting by Brendan O'Boyle; Editing by Kylie Madry)