Constellation has been experiencing weakness in its wines
and spirits business for a while and the impact of the recent divestitures in
this division and its future growth plans are areas to keep an eye on.
In the first quarter of 2020, the company beat analysts’ expectations. Net sales grew 2% to $2.1 billion while adjusted EPS rose 0.5% to $2.21. Sales grew 7% in Beer and fell 8% in Wines and Spirits.
Also read: Cal-Maine Foods Q1 2020 Earnings Report
For fiscal year 2020, Constellation expects reported EPS of
$4.95-5.25 and adjusted EPS of $8.65-8.95. In the beer business, the company
expects net sales and operating income growth of 7-9%. In the wine and spirits
business, net sales is expected to drop 20-25% while operating income is
expected to decline 25-30%.
Shares of Constellation Brands have gained 26% year-to-date and 4% in the past three months. The majority of analysts have rated the stock as Buy and it has an average price target of $227.62.