Constellation Brands (NYSE: STZ) Q3 2019 Earnings Call

Constellation Brands (NYSE: STZ) Q3 2019 Earnings Call
Constellation Brands slips on weak 2019 earnings outlook
January 9, 2019

Constellation Brands Inc. (STZ) reported a 38% dip in earnings for the third quarter due to a loss from unconsolidated investments. The results exceeded analysts’ expectations. However, the wine and beer maker lowered its earnings guidance for the fiscal year 2019. Following this, the stock fell over 11% in the premarket session.

Net income plunged 38% to 3.1 million and earnings dropped 36% to .56 per Class A common share. The results were impacted by a loss from unconsolidated investments and a 4 million decrease in the fair value of Canopy investments recognized for the third quarter. Comparable earnings grew 18% to .37 per share.

Net sales increased 9% to .97 billion. The top line benefited from the strong portfolio performance and market share gains from the beer division as well as strong shipment volume growth in the wine and spirits division.

Looking ahead into the fiscal year 2019, the company lowered its earnings guidance to the range of .95 to .05 per share from the prior range of .10 to .25 per share. Comparable earnings outlook was cut to the range of .20 to .30 per share from the previous estimate range of .60 to .75 per share.

For fiscal 2019, the beer business now expects net sales growth to be at the high end of the 9% to 11% range and operating margin to approximate 39%. For the wine and spirits business, the company now expects net sales and operating income to decline low-single digits.

Constellation Brands (NYSE: STZ) Q3 2019 Earnings Call