* Becle earnings well above expectations * Company open to strategic M&A, divestments * Executives expect strong competition in US, Canada (Recasts, updated throughout with details from call) By Sarah Morland MEXICO CITY, Oct 23 (Reuters) - Shares in Becle , the world's largest tequila maker, surged more than 10% on Thursday, after it posted strong quarterly results boosted by recovering demand in nearly all its markets as well as lower debt and agave costs. The Mexican distiller, which makes the bulk of its income from Jose Cuervo family tequilas as well as a range of mezcals, vodkas, gins and whiskeys, posted a near fivefold increase in net profit, landing well above market expectations. In an earnings call, CEO Juan Domingo Beckmann attributed the strong results partly to the firm's premiumization strategy and said he was confident of Becle's ability to position itself "for sustained growth in 2026," despite a challenging market. Alcohol consumption has been hit worldwide in what some industry groups have attributed to changing consumer habits as customers tighten wallets and opt for healthy alternatives, as well as the commercialization of legal marijuana. Uncertainty over tariff policy in the U.S., as well as a consequent Canadian boycott of foreign brands, also hit Becle's business in both these countries, and together they marked the only region where volumes and sales diminished this quarter. However, Chief Financial Officer Rodrigo de la Maza said the period marked the first quarter of overall volume recovery since the first three months of 2023, and that the company would keep an open mind to possible strategic or value-adding acquisitions. "This was undoubtedly a solid quarter," said analysts at Scotiabank, noting the results put the company on "strong footing for possible M&A, in what has been a decimation of valuations in the spirits world." Becle, which sold off its stakes in Mexican distiller Lalo and energy drinks maker B:oost, will also likely continue to divest from brands not key to its strategy, Beckmann said. In the U.S. and Canada, the only markets which saw a downturn, regional chief Mauricio Vergara said he expected that competition would remain fierce in the foreseeable future. However, he said, Becle would continue to prioritize its premium brand pricing and "refrain from chasing competition on the downside." Becle expects to keep benefiting from cheaper costs of agave - the prickly plant used to make tequila - but said that the last three months of the year should see a less favorable foreign exchange rate. In the third quarter, a stronger peso modestly diminished the peso-value of drinks sold abroad, but it also helped the firm deleverage its dollar-denominated debt. Thursday's gains added over $400 million to Becle's market value and set the stock on track for its best day since early last year, as some 1.3 million shares changed hands. ($1 = 18.3694 Mexican pesos) (Reporting by Sarah Morland; Editing by Brendan O'Boyle and Keith Weir) (The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)
