Why are Becle's shares declining?

Becle's shares have declined due to reduced tequila consumption, a weaker US dollar impacting earnings, and a downturn in the US Hispanic consumer market.

What is impacting Becle's sales?

Sales are impacted by a post-pandemic shift in consumer drinking habits, reduced spending from the US Hispanic demographic due to inflation, and potential issues with US distributor networks.

What are the future prospects for Becle?

Future prospects may improve with the World Cup expected to boost consumer spending, particularly in Mexico, and the company is seen as a potential long-term investment at its current discounted trading price.

Home / Business and Economy / Tequila Slump Hits Jose Cuervo Maker

Tequila Slump Hits Jose Cuervo Maker

27 Feb

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Summary

Becle shares have dropped nearly 14% this year.
Consumer drinking habits have shifted post-pandemic.
A softer US dollar impacts Becle's key market earnings.

Becle, the company behind Jose Cuervo, has seen its shares decline by nearly 14% this year, marking the worst performance in the Mexbol benchmark index. This downturn is attributed to a reduction in tequila consumption among North Americans, a trend that began during the pandemic.

Despite a significant collapse in the price of agave, tequila's primary ingredient, Becle is struggling to offset the impact of softer consumer spending. A weaker US dollar further diminishes earnings from its vital US market. Analysts also point to recent changes in US distributors as a potential factor limiting product availability.

The company recently reported fourth-quarter net income that missed analyst expectations, accompanied by volume declines in Mexico, the US, and Canada. Weakness in the US Hispanic consumer market, typically a major sales driver, is a significant concern, with this demographic reportedly cutting back on spending due to inflation and fewer social gatherings.