(Wines&Vines) - Constellation Brands Inc. (NYSE: STZ and STZ.B), reported this morning its first-quarter fiscal 2017 results ending Feb. 28/29, and they were impressive: Net sales were up 15% to $1.87 billion, while operating income was up 29% to $553 million.

“With sales and net income up double digits, our first-quarter results are setting the stage for fiscal 2017,” said Rob Sands, president and chief executive officer of Constellation Brands.

“We’re off to a great start due to our ability to effectively integrate and grow our recently acquired brands, increase margin across the portfolio and drive consumer demand through our best-in-class marketing and sales execution efforts for our core, higher margin, premium brands.”

Sands added, “We also completed a significant expansion milestone at our Nava (Mexico) brewery, bringing our total current capacity to 20 million hectoliters.”

He noted that the increase reflects both organic (internally generated) net sales growth on a constant currency basis of 10% and revenue from acquisitions primarily from Ballast Point (beer) and the Meiomi wine brand. (It also acquired The Prisoner a month before the end of the fiscal quarter.)

Beer rules

In spite of high-visibility wine brand acquisitions—$315 million for Meiomi and $285 million for The Prisoner—the first-quarter numbers show the importance of beer to the company.

Beer supplied 63.8% of revenue, wine and spirits 35.6%, but beer gross profit was 49.7%, and wine and spirits 41.3% gross profit, up 10% over a year ago.

Beer sales were $1.151 million (up 19%), including $42.4 million from San Diego-based craft beer producer Ballast Point, which it acquired for $1 billion on Dec. 16, 2015. Beer revenue on organic sales was $965.8 million, up 15%. Beer operating income increased 22%, primarily due to organic volume growth, favorable pricing and benefit from the Ballast Point acquisition.