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Factors to Note Before Constellation Brands (STZ) Q1 Earnings
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Constellation Brands, Inc. (STZ - Free Report) is scheduled to release first-quarter fiscal 2022 results on Jun 30, 2021. The alcoholic beverage bigwig is likely to deliver top and bottom-line growth in the to-be-reported quarter.
The Zacks Consensus Estimate for the company’s fiscal first-quarter earnings is pegged at $2.38, indicating 3.5% growth from the year-ago quarter’s reported figure. However, the consensus mark has moved down 2.5% in the past seven days. The consensus mark for revenues is pegged at $2.05 billion, suggesting a 4.5% increase from the prior-year quarter’s reported figure.
In the last reported quarter, the alcohol behemoth delivered an earnings surprise of 22.2%. Moreover, its bottom line beat estimates by 18.4%, on average, over the trailing four quarters.
Constellation Brands has been gaining from the strength in shipments and robust depletion growth at the company’s beer business. Depletion volume at the beer business benefited from robust off-premise channel sales, which more than offset the declines in the on-premise channel due to the coronavirus outbreak. Solid portfolio depletions and market-share have been the result of continued strength in the Modelo brand. The persistence of the trends is likely to have aided the company’s beer business’s sales in the to-be-reported quarter.
Additionally, it has been capitalizing on the opportunities in the fast-growing hard seltzer category. The Corona Hard Seltzer, launched in early 2020, has achieved the number four position in the category and is currently the second-fastest moving hard seltzer. Moreover, it continues to maintain strong incrementality levels at nearly 90%. The initiatives and product launches will strengthen Constellation Brands’ competitive position in the hard seltzer category, broaden its distribution reach, and enhance market share in the high-end U.S. beer market. This is likely to get reflected in the company’s top and bottom-line results for the fiscal first quarter.
On the fourth-quarter fiscal 2021 earnings call, management revealed plans to invest in the next phase of capacity expansion in Mexico. This is expected to help meet the demand for the high-end Mexican beer portfolio, including the emerging Alternative Beverage Alcohol sub-space, which includes hard seltzers. Benefits from the investments are expected to get reflected in the beer business’ results for first-quarter fiscal 2022.
Additionally, the company’s wine & spirits premiumization strategy is playing out well, as evident from the accelerated growth rates for Power Brands. The high-end Power Brands, including Kim Crawford, Meiomi and The Prisoner Brand Family, have been witnessing double-digit growth.
Also, the company has been making investments to fuel growth of its Power Brands through innovation, capitalizing on priority and consumer trends, with successful product introductions like the Prisoner Cabernet Sauvignon and Chardonnay varietals, SVEDKA and High West ready-to-drink cocktails, Ruffino wine spritzer, and Meiomi Cabernet Sauvignon. Gains from the investments and trends are expected to get reflected in organic sales for the wine & spirits segment in the fiscal first quarter.
However, the impacts of adjustments related to loss from the Canopy Growth deal and other activities are likely to have been headwinds. In the last reported quarter, Constellation Brands’ share of Canopy Growth’s equity earnings and related activities reflected a loss of $258 million on a reported basis and a loss of $37.4 million on a comparable basis. Furthermore, higher cost of goods sold and an increase in marketing spend in both segments have been hurting the company’s comparable operating income.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Constellation Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Constellation Brands has a Zacks Rank #3 and an Earnings ESP of -1.19%.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat:
PepsiCo, Inc. (PEP - Free Report) currently has an Earnings ESP of +1.33% and a Zacks Rank #3.
Philip Morris International Inc. (PM - Free Report) presently has an Earnings ESP of +0.33% and a Zacks Rank #3.
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Factors to Note Before Constellation Brands (STZ) Q1 Earnings
Constellation Brands, Inc. (STZ - Free Report) is scheduled to release first-quarter fiscal 2022 results on Jun 30, 2021. The alcoholic beverage bigwig is likely to deliver top and bottom-line growth in the to-be-reported quarter.
The Zacks Consensus Estimate for the company’s fiscal first-quarter earnings is pegged at $2.38, indicating 3.5% growth from the year-ago quarter’s reported figure. However, the consensus mark has moved down 2.5% in the past seven days. The consensus mark for revenues is pegged at $2.05 billion, suggesting a 4.5% increase from the prior-year quarter’s reported figure.
In the last reported quarter, the alcohol behemoth delivered an earnings surprise of 22.2%. Moreover, its bottom line beat estimates by 18.4%, on average, over the trailing four quarters.
Constellation Brands Inc Price and EPS Surprise
Constellation Brands Inc price-eps-surprise | Constellation Brands Inc Quote
Key Factors to Note
Constellation Brands has been gaining from the strength in shipments and robust depletion growth at the company’s beer business. Depletion volume at the beer business benefited from robust off-premise channel sales, which more than offset the declines in the on-premise channel due to the coronavirus outbreak. Solid portfolio depletions and market-share have been the result of continued strength in the Modelo brand. The persistence of the trends is likely to have aided the company’s beer business’s sales in the to-be-reported quarter.
Additionally, it has been capitalizing on the opportunities in the fast-growing hard seltzer category. The Corona Hard Seltzer, launched in early 2020, has achieved the number four position in the category and is currently the second-fastest moving hard seltzer. Moreover, it continues to maintain strong incrementality levels at nearly 90%. The initiatives and product launches will strengthen Constellation Brands’ competitive position in the hard seltzer category, broaden its distribution reach, and enhance market share in the high-end U.S. beer market. This is likely to get reflected in the company’s top and bottom-line results for the fiscal first quarter.
On the fourth-quarter fiscal 2021 earnings call, management revealed plans to invest in the next phase of capacity expansion in Mexico. This is expected to help meet the demand for the high-end Mexican beer portfolio, including the emerging Alternative Beverage Alcohol sub-space, which includes hard seltzers. Benefits from the investments are expected to get reflected in the beer business’ results for first-quarter fiscal 2022.
Additionally, the company’s wine & spirits premiumization strategy is playing out well, as evident from the accelerated growth rates for Power Brands. The high-end Power Brands, including Kim Crawford, Meiomi and The Prisoner Brand Family, have been witnessing double-digit growth.
Also, the company has been making investments to fuel growth of its Power Brands through innovation, capitalizing on priority and consumer trends, with successful product introductions like the Prisoner Cabernet Sauvignon and Chardonnay varietals, SVEDKA and High West ready-to-drink cocktails, Ruffino wine spritzer, and Meiomi Cabernet Sauvignon. Gains from the investments and trends are expected to get reflected in organic sales for the wine & spirits segment in the fiscal first quarter.
However, the impacts of adjustments related to loss from the Canopy Growth deal and other activities are likely to have been headwinds. In the last reported quarter, Constellation Brands’ share of Canopy Growth’s equity earnings and related activities reflected a loss of $258 million on a reported basis and a loss of $37.4 million on a comparable basis. Furthermore, higher cost of goods sold and an increase in marketing spend in both segments have been hurting the company’s comparable operating income.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Constellation Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Constellation Brands has a Zacks Rank #3 and an Earnings ESP of -1.19%.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat:
The Simply Good Foods Company (SMPL - Free Report) has an Earnings ESP of +8.84% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
PepsiCo, Inc. (PEP - Free Report) currently has an Earnings ESP of +1.33% and a Zacks Rank #3.
Philip Morris International Inc. (PM - Free Report) presently has an Earnings ESP of +0.33% and a Zacks Rank #3.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
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