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Constellation Brands Inc. (STZb.N), owner of Corona Beer and Modelo, surpassed analysts' estimates for the fourth quarter, boosting new CEO Bill Newlands, who is restructuring the portfolio. alcohol of the company to support its growth.
The company reported comparable earnings per share of $ 1.84, exceeding analysts' average estimate of $ 1.71.
Key ideas
-The company announced on Wednesday its intention to get rid of some of its low-end brands of wines and spirits to focus on more premium lines selling at $ 11 or more. The growth of the alcoholic beverages sector, like some other consumer segments, comes from buyers buying upscale options. The profits of the wine and spirits unit will drop by up to 35% in this year once the assets are liquidated.
-Newlands, which just took power in March, is under pressure to prove that it can support the growth of Constellation's beer business, which is anchored in Mexican brands. The unit will see net sales growth of between 7% and 9% in fiscal year 2020, he said, in line with the high-single-digit targeted rate announced in February.
-Constellation strengthened its profile last year by investing in Canopy Growth Corp., the world's most valuable marijuana company. But it is still early for this business. Constellation said it will still take at least a year before its investment in weeds increases its revenue. Canopy sells pot in Canada and targets the US hemp market.
Market reaction
Constellation shares rose 2.7% to $ 184.51 at 9:47 am in New York.
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