Chris Barnes

Chris Barnes asked for clarification on the depletions expectations for the second half, noting that the 1%-2% pricing comment and the expectation for shipments and depletions to track closely seem to imply a material step down in depletions growth for the second half, and requested an unpacking of the drivers behind this.

Answer

CEO Bill Newlands acknowledged unprecedented volatility and mixed results, with high Hispanic zip code areas performing significantly worse than the general market. He noted cautious optimism about hitting bottom but stressed the mixed and volatile environment, particularly in California. He indicated that no radical change in depletions is projected or expected for the back half of the year based on overall guidance.

Chris Barnes followed up on depletions expectations for the second half. He noted that the 1-2% pricing comment and the expectation for shipments and depletions to track closely imply a material step down in H2 depletions growth, and asked for the drivers behind this.

Answer

CEO Bill Newlands declined to give quarter-by-quarter guidance but highlighted unprecedented volatility and mixed results, with significantly worse performance in high Hispanic zip code areas compared to the general market. He expressed cautious optimism about having hit the bottom but stressed ongoing volatility, citing California as a particular problem due to a lack of '4,000 calorie jobs.' He indicated no radical change is projected for H2 based on current guidance.