Published: Sun, April 07, 2019
Markets | By Otis Pena

Corona, Modelo beers drive Constellation beat, wines leave a stain

Corona, Modelo beers drive Constellation beat, wines leave a stain

Constellation Brands Inc. said sales rose in the latest quarter as stronger beer sales helped offset weakness in its lower-priced wine brands. The company's top line growth was driven by a 9.3% rise in its Beer segment's sales to $1.1 billion driven by strength in the Modelo and Corona brand families.

Even though beer consumption drops during the winter months of December-February, Constellation said it took a bigger pie of the USA beer industry and was the top market share gainer for those months.

This buy-in by Constellation Brands means the New York-based firm now owns a 38 percent share in Canopy Growth compared to its previous 10 percent.

Constellation also will soon roll out its new Corona Refresca beverage, a flavored malt beverage targeting women. The Gallo deal totals 28.4 million cases with net sales of $1.1 billion.

We've positioned our wine and spirits business for success with our announced plans to sell a portion of the business, which enables us to continue to strategically focus on our powerhouse, high-margin, high-growth brands.

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Looking ahead to the 2020 fiscal year, the company said that it sees comparable earnings of $8.50 to $8.80 per share, with operating income from its beer division rising between 7% and 9%, while wine and spirits are expected to see a net decline in sales of 25% to 30%. During the same quarter in the prior year, the business earned $1.90 earnings per share.

"We're comfortable with the divestiture".

It was reported last month that Constellation was nearing a deal to sell off some of its underperforming lower-end wine brands. Altman has a stake in the brewer.

Based in Victor, N.Y., the company believes that industry leadership involves a commitment to brand building, our trade partners, the environment, our investors and to consumers around the world who choose our products when celebrating big moments or enjoying quiet ones. Gallo for $1.7 billion, Constellation has unveiled its results for the fiscal year through February.

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