Constellation Brands (STZ) - Get Constellation Brands, Inc. Class A Report posted modestly lower-than-expected first-quarter earnings but lifted its full-year profit guidance as improving beer sales offset an ongoing slump in its wine and spirits division.
The stock was also boosted by news of an accelerated share buyback program worth around $500 million that closes on July 2.
Constellation Brands said comparable earnings for the three months ended in May, the group's fiscal first quarter, were pegged at $2.33 per share, up 3 cents from the same period last year but a penny shy of the Wall Street consensus forecast. Group revenues, Constellation said, rose 3.2% to $2.026 billion, a tally that again narrowly missed analysts' estimates of a $2.03 billion tally.
Net beer sales rose 14% from last year, the maker of Corona and Model said, while wine and spirits sales were down 22%.
Looking into its 2022 fiscal year, which ends in February, Constellation said it sees comparable earnings in the region of $10 to $10.30 per share, up 5 cents a share from its prior forecast, with net beer sales rising by between 7% and 9% from 2021.
"We're emerging from the pandemic in a position of strength as we kick off our fiscal year," said CEO Bill Newlands. "Our Beer Business delivered double-digit net sales and profit growth and our Wine & Spirits Business is poised to drive accelerated growth and profitability from its portfolio of high-end, industry-leading brands."
Constellation shares were marked 2.2% higher in early trading immediately following the earnings release to change hands at $236.25 each.
Earlier this year, Anheuser-Bush InBev, via its Mexico-based division Grupo Modelo filed a lawsuit against Constellation accusing it of apply the Corona name to products other than beer, a move it said violated terms of their branding agreement.
Constellation now uses the Corona label on its 'Hard Seltzer' product, which helped drive a 7% depletion growth figure over the second quarter.