Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from James Watson with HSBC.
James Watson - HSBC
I will start with volume. I would like a clarification. You said the core shipments through March year-to-date were down 14%, but the underlying volume was down 2%. So we’re looking at so far this year a 12% difference between depletions and shipments. How does that compare to overstock you thought inventories were at the end of the fourth quarter?
Martin Roper
One way to think about how much inventory might have been overstocked is to look at last years shipments, versus depletions, as [audio gap] which will be available to you in the 10-K that we’ll be filing just a little bit later today. From that you will get a good perspective that there was some inventory build last year, probably not that significant on a full-year basis, but if that was to unwind on a quarter basis that might show up.
What we’ve seen in our shipments and orders to date through the end of March is obviously a negative trend significantly greater than the decline in depletions that we’re seeing certainly on a selling day adjusted basis. So, what we tried to do was provide a reference point for you as to how that compared to our depletions over this same time period last year, and obviously that’s just off by a couple of percentage points.
Typically in the first quarter, and indeed in the first half of the year, we would expect to see some wholesaler inventory build up to the peak selling months of July. Frankly, those would continue past through to November and then unwind through Thanksgiving and Christmas. We’re not sure we’re seeing that this year, based on anecdotal evidence and also what our shipments are relative to depletions. We think that’s; probably just indicative of how people are behaving in the current economic climate.
James Watson - HSBC
Okay so we’re seeing that the destocking might be a little more weighted in the first half of the year, especially as that was traditionally when the build up was?
Martin Roper
Yes and when we say destocking, I think, what we’re looking at is what we might have expected inventory build to have been over that period of time and we’re just not seeing it.
James Watson - HSBC
Okay. As far as the slow down we’ve seen in the volume, I was wondering if you could comment on whether that’s focused on premise or off premise, and if there are any specific brands, or geographies that this is weighted and where we’re seeing this coming from.
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