Operator: Thank you. Our next question comes from the line of Lauren Lieberman with Barclays. Please proceed with your question.
Lauren Lieberman: Hi. Can you hear me?
Bill Newlands: We do.
Garth Hankinson: We can.
Bill Newlands: Part two.
Lauren Lieberman: Okay, hooray. Okay, cool. Sorry about that, I don’t know what happened, but just quickly, I was going to ask about wine industry growth. And just against the backdrop of your comments on Woodbridge/SVEDKA, obviously not wine, and then the higher end brands performance. But just as you think about the path forward, not just second half, but into next year and so on, how do you think about wine industry growth, wine versus beer versus spirits? I’m guessing we’ll get into this a bit more the Investor Day, but I was just curious if you could preview a bit your view on kind of that long-term growth in wine? Thanks.
Bill Newlands: Yes, certainly, Lauren. It’s really the tale of two cities. The lower end piece of the business, what we refer to as mainstream, has been very challenged. It’s down mid to high single-digits, which obviously is somewhat challenging for us because we do have significant involvement with that category still even though we have divested a number of brands that played in that category. So that certainly is a very different answer than what I would say to you about the higher end portion of the business, where brands like Naomi and Kim Crawford and High West and Booker and things of that nature are all significantly outperforming our plans and expectations and gaining share. You’re right. We’ll talk about that at Investor Day.
The other thing I keep in mind, unlike beer, which is about 45% in the second half, it’s directly the flip when it comes to wine. That’s 55% in the second half. And as we do, and a disproportionate amount of our business comes from ASPIRA and which much more relates to vintage releases those all tend to occur in the second half which again weights our business toward the back half the year versus the first half the year. And the other one I would just point out which I think is important to recognize. We made the choice as we said early this year that we were going to balance our ships and depletes all year long, as opposed to doing it once in the fourth quarter which is what we did last year That creates a bit of a challenge in the early part of our fiscal year, but gives us a significant improvement proposition in the back half of the year, as that won’t occur as it did last year, creating a disproportionate shipment number in the fourth quarter last year, which won’t be the case and we will be going against a much better proposition this year.
So all in I think the wine business certainly has seen some challenges, but much like we see in the higher end of the beer business. The higher end portion of the category is much stronger and certainly our business in that sector is performing very nicely against category norms. And you’re right we will go into all of that in much more depth during our investor discussion on November 2.
Operator: Thank you. We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Bill Newlands for any closing comments.
Bill Newlands: Thank you, and thank you all again for joining our call today. We’re very pleased with our performance in the first half of fiscal 2024. As anticipated, our beer business further accelerated during its seasonally strongest period of the year to deliver excellent results. In our Wine and Spirits portfolio, our higher-end brands continued to outperform and track channels, and we’re looking forward to an acceleration in the growth of that business over the second half. All told, we remain confident in our outlook for the full year and have tightened the expectations for growth in our beer business at the higher-end of the initial range, while increasing our overall EPS outlook as we drove interest expense lower due to our proactive debt management.
In closing, I would like to encourage you to tune in for our upcoming Investor Day on November 2nd, where we will be sharing our latest perspective on the medium-term outlook for our business. You will find further details on how to access this event through our Investor Relations website at ir.cbrands.com. Thank you again for joining us today, and we look forward to seeing most of you, if not all of you, November 2.
Operator: Thank you. This does conclude today’s teleconference. We appreciate your participation. You may disconnect at this time. Enjoy the rest of your day.
