On an unadjusted basis, the company reported a net loss of $525.2 million or $2.77 per share for the three-month period, compared to a profit of $1.15 billion or $5.87 per share in the second quarter of 2019.
Sales up 2%
There was a 2% increase in net sales to $2.34 billion during the quarter, which was in line with the market’s prediction.
“The winning streak for our beer business continues with Modelo Especial generating the most growth in the entire U.S. beer category. Our Wine & Spirits innovation pipeline is primed to launch impactful product introductions, as we head into the key selling season this fall,” said CEO Bill Newlands.
Outlook
Meanwhile, the management revised its full-year earnings forecast to the range of $0.55 per share to $0.75 per share, and the outlook for adjusted earnings to $9.00-$9.20 per share. The revised forecast assumes the closure of the Wine and Spirits transaction at the end of the third quarter and completion of the Black Velvet transaction in November.
The full-year cash flow target has been revised up to $2.2 billion and free cash flow estimate to $1.3-$1.4 billion. It continues to expect the beer business to register a 7-9% growth in net sales and operating income in fiscal 2020.
Stock Buyback
During the quarter, the company repurchased around 266,000 shares for $50 million. It also agreed to sell the Black Velvet Canadian Whisky business to Heaven Hill Brands for $266 million.
Related: Constellation Brands Q1 2020 Earnings Call Transcript
ADVERTISEMENT
Constellation Brands shares have gained 22% so far this year, continuing the recovery that began towards the end of 2018. The stock lost about 3% early Thursday immediately after the earnings announcement, after closing the last session lower.