Constellation Brands Top Q2 Estimates

Constellation Brands, Inc. (NASDAQ: STZ) reported its second quarter financial results and topped analysts’ estimates, sending shares 5% higher during Thursday’s pre-market hours.

For the second quarter, Constellation Brands reported net sales of USD 2.29 Billion, increasing 10% year over year and beating analyst’s forecasts of USD 2.24 Billion. The Company reported an EPS of USD 2.87, increasing 16% and topping estimates of USD 2.61.

Beer sales rose to USD 1.53 Billion, increasing 10.5%, beating estimates of USD 1.52 Billion. Wine and spirits sales grew by 9.3% to USD 772 Million, beating estimates of USD 728.9 Million.

The Company reported that its Modelo and Corona brands drove its strong performance for the quarter. While the wine and spirits segment focused on higher retail prices, driven by its Meiomi, Kim Crawford, Simi and Prisoner brands.

“The double digit EPS growth we delivered in the second quarter is top-tier for consumer product companies. Constellation remains the high-end leader and the most significant growth contributor in the U.S. beer market, and we’re seeing strong growth trends for the super-premium plus segment of our wine portfolio.” said Rob Sands, Constellation Brands Chief Executive Officer.

Constellation Brands reported basis results of USD 639 Million unrealized gain for an increase in fair value of its initial investment in Canopy Growth Corporation (NYSE: CGC) Now, USD 1.3 Billion unrealized gain has been recognized since its investment last November.

“Our $4 billion investment in Canopy Growth provides us with a strong foothold in the emerging global cannabis market, which could be one of the most significant growth opportunities of the next decade,” continued Sands.

“Why are you having a beverage on a Friday night? It’s about a social lubricant. I think [Constellation] didn’t view themselves as a beverage company so much as an entity that provides those occasions with some kind of lift if you will — and that’s an easy way to look at cannabis, not as a threat, but as an alternative or additional,” said Canopy Growth Chief Executive Officer Bruce Linton in a Business Insider interview.

Constellation Brands forecasts an adjusted EPS between USD 9.60 to USD 9.75 for fiscal 2019. FactSet analysts forecast an EPS of USD 9.34.

3 Comments
  1. Bill Peters 2 months ago
    Reply

    Hmm. $STZ’s Sands, when asked if either the company itself or Canopy would sell CBD products if farm bill legalizes hemp, said “The answer is both.”

  2. Carlos Nieves 2 months ago
    Reply

    $STZ Took 225.50’s at $2.20 for OCT monthly. Risk reward seems reasonable.

  3. Matt Vadacchino 2 months ago
    Reply

    $STZ into some key price levels and looking good in terrible tape. Remains a top focus. $MCD also.

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