Constellation Brands Q1 Profit Down 27% Due to Restructuring Expenses (STZ)
Wine and spirit maker, Constellation Brands Inc. (NYSE: STZ) announced on Tuesday that its fiscal first-quarter profit fell 27% as expenses linked to restructuring outweighed improvement in the revenue and higher number of shipments.
However, the Company lifted its full-year adjusted earnings guidance by 5 cents to a range of $2.60 to $2.90 a share.
Just last month Constellation paid Anheuser-Busch InBev NV about $5.3 billion to acquire Grupo Modelo SAB’s 50% stake in Crown Imports LLC, a joint venture which imports Corona and several other Mexican beer brands in the U.S.
Constellation Brands is now the third largest beer company in the U.S. In spite of the fact that most Americans prefer wine and liquor over beer, the demand for imported beer is strong in the U.S. Imported brands such as Budweiser and Miller are immensely popular in the U.S.
For the fiscal first quarter ended May 31, Constellation Brands reported a net income of $52.9 million or 27 cents a share compared to a profit of $72 million or 38 cents a share, in the year earlier quarter.
Stripping out onetime expenses such as restructuring costs, earnings slipped to 38 cents from 40 cents a share.
Net sales climbed 6.1% to $673.4 million. Total shipments increased 6.1%.
Analysts’ consensus estimate was earnings of 40 cents a share on sales of $674 million.
Gross margin narrowed to 38% from 39.5%.
Shares of Constellation Brands Inc fell 3.57% to $51.25 on Tuesday.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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