Becle shares plunge 14% after profit drops 64% in a weak quarter

Becle, the Mexican spirits company behind José Cuervo tequila, suffered its sharpest stock drop since 2023 on Thursday, October 29, after reporting weak third-quarter results that showed lower sales, a steep profit decline and softer demand across its business.

The shares fell as much as 14% in Mexico City trading. Even after recovering from the session low, the stock remained under heavy pressure and has lost about one-third of its value so far this year, underscoring how difficult the period has been for the world’s largest tequila producer.

Becle said sales fell in every region and across all product lines. The company blamed unfavorable exchange-rate movements and lower shipments outside North America for much of the weakness. The stronger Mexican peso also hurt reported results because revenue generated abroad translated into fewer pesos.

Third-quarter net sales fell 15% from a year earlier to MXN9.3 billion, or nearly $500 million. Operating profit dropped 64%, one of the sharpest declines in the company’s recent results. Becle also said volume was down almost 9% at the companywide level, largely because of the recent sale of noncore assets as it shifts its strategy toward higher-end spirits.

The company said sales tied to José Cuervo fell 21% from a year earlier in the quarter, adding to the pressure on a group that has already been dealing with a broad slowdown in spirits consumption. Becle has been reorganizing its U.S. distribution network at the same time that drinkers have become more cautious about spending and, in some markets, are buying less alcohol overall.

That combination has made the company a close watch point for the wider beverage business. Weakness at the largest tequila producer can signal softer international demand for spirits, while the hit from exchange rates and distribution changes points to margin risks that could also affect other liquor makers, including producers of whiskey, rum and other premium categories.

The results come during a difficult stretch for alcohol companies more broadly. Many producers have faced slower sales as some consumers shift preferences, pay more attention to health and trim discretionary purchases. Premium spirits, which had been a strong growth area for years, have not been immune to that pressure.

Analysts at GBM said changes to Becle’s U.S. distribution network should support a gradual improvement in volume. But they also cautioned that the sector remains under pressure and that weak consumer demand could limit the pace of any recovery.

The U.S. market has been a central issue for Becle. The company has been reworking how its products reach retailers and bars, a move meant to improve performance over time but one that can disrupt shipments in the short term. With demand also cooling, that transition has become harder to manage.

Outside North America, lower shipments were another drag in the quarter. Becle did not report a single bright spot by geography or product family in the summary cited by investors, reinforcing the view that the weakness was broad rather than isolated to one market.

Currency effects added another layer of strain. Because Becle sells heavily outside Mexico but reports in pesos, the peso’s appreciation reduced the local-currency value of foreign sales. That pressure can weigh on earnings even when underlying demand is stable, and it becomes more damaging when volumes are already falling.

The company has tried to reposition itself around premium spirits after selling assets considered nonessential. That strategy is intended to sharpen its focus and improve long-term profitability, but the latest quarter showed the near-term cost of the transition. Lower volume linked to those asset sales was one reason overall shipments declined, though it did not fully explain the size of the drop in profit.

Becle owns more than 30 spirits brands. In addition to José Cuervo, its portfolio includes 1800 tequila, Kraken rum and Bushmills whiskey. The breadth of that lineup means its results are often viewed as a read on demand across several segments of the global spirits market, not only tequila.