Mexican Tequila Giant Becle Sees Profit Jump Despite Slowing Demand
Profit Soars Despite Sales Slump
Mexican distiller Becle, the world’s largest tequila producer, reported a 41% increase in net profit for the last quarter of 2023 compared to the previous year, despite a decline in sales in key markets.
Performance and Revenue Figures
The Mexico City-based company, known for its Jose Cuervo family tequilas, as well as mezcal, whiskey, and other spirits, recorded a net profit of 1.96 billion pesos ($115 million) for the fourth quarter. However, revenues decreased by 5% to 13.16 billion pesos, slightly surpassing analysts’ estimates.
EBITDA and Market Trends
Earnings before interest, tax, depreciation, and amortization (EBITDA) dipped by 2% to 2.44 billion pesos, slightly above market expectations. Becle’s management attributed the slowdown in consumer demand for spirits to a normalization of trends following two years of rapid growth.
Outlook and Market Position
The company expressed optimism about potential cost benefits in the coming year, anticipating margin expansion due to reduced supply chain pressures and lower input costs. Becle’s stock has experienced a 25% decline compared to the previous year, largely influenced by currency fluctuations and weakened volumes in the U.S. market.
Industry Challenges
Diageo, a major spirits company, recently replaced its Mexico chief after grappling with unsold inventories in Latin America’s second-largest economy, resulting in a profit warning and a subsequent drop in share value.
Becle’s response to slowing demand and market challenges reflects the resilience and adaptability of the global spirits industry, offering valuable insights into the evolving consumer landscape and the strategies employed by industry leaders to navigate changing market dynamics.
