Shares of Constellation Brands (NYSE: STZ) climbed 6% in Friday morning’s session trading after the Company announced earnings that topped analysts’ expectations. The maker of Corona also raised its 2020 guidance as beer sales continue to drive growth.
Constellation said adjusted earnings for its fiscal first quarter were USD 2.21 a share, ahead of the average estimate of USD 2.04 a share. This number includes a loss from the Company’s 38% stake in Canopy Growth (NYSE: CGC) which shaved 9% off Constellation’s EPS. Revenue jumped 2% to USD 2.1 Billion, beating Wall Street’s estimate of USD 2.07 Billion.
“As we kick off fiscal 20, I’m pleased with our strong start to the year. Our wine and spirits transformation strategy is working led by our collection of Power Brands, which delivered industry leading depletion growth of 4% during the quarter,” said President and Chief Executive Officer, Bill Newlands. Earlier this year Constellation decided to sell 30 of its low-end wine and spirits brands in a USD 1.7 Billion deal with E. & J. Gallo Winery. The transaction, expected to close in the second quarter of fiscal 2020, leaves the Company with customer favorites like Kim Crawford and Meiomi. The Company’s beer segment, which includes Corona and Modelo brands, also outperformed. The beer business delivered 7% depletion growth during the quarter.
For fiscal 2020, Constellation now expects to report full-year adjusted earnings of between USD 8.65 and USD 8.95 per share, up from a prior announcement of USD 8.50 to USD 8.80.
Shares of Constellation Brands have gained nearly 22%% this year versus rival brewer, Anheuser-Busch (NYSE: BUD), up 34 %.