Constellation Brands releases an upbeat earnings report for the fourth quarter

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Apr 4, 2020
Updated: Apr 28, 2020
  • Constellation Brands made £1.68 of earnings per share in the fourth quarter.
  • The company posted a 6% increase in net sales in Q4 to £1,550.86 million.
  • The beverage company refrained from giving 2021 financial guidance.

Constellation Brands (NYSE:STZ) released its quarterly financial results on Friday which topped the analysts’ estimate. Despite the stronger than expected earnings report, the international beverage company declined by around 7% in the stock market in the morning session. Much of the loss was later regained in the day with the stock closing around 2.5% down on Friday.

In the first three months of 2020, the stock has dropped over 31% versus a 36.2% decline in the industry at large.

Constellation Brands Topped Analysts Estimate For EPS In Q4

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In its financial report on Friday, Constellation Brands said that it made £1.68 of earnings per share that translates to a 12% increase as compared to its EPS (earnings per share) in the same quarter last year. Analysts had forecast the company to make £1.32 of earnings per share in the recent quarter. The aforementioned accounted for 9.78 pence of equity loss attributed to Canopy Growth CGC.

At £1,550.86 million, the company posted a 6% increase in net sales in the fourth quarter as compared to £1,498.78 million that was recorded in last year’s Q4.

In terms of its beer business, Constellation Brands recorded an 8.9% increase in sales to £967.81 million ascribed to a 7.2% improvement in shipment volume and a broader 10.8% increase in overall depletion.

At £583 million, its unit that deals in wine and spirits posted a 1.2% increase in sales in the fourth quarter. Organic net sales for this unit recorded a 3.7% growth in the recent quarter. Despite a 0.6% decline in depletions and a 1.4% drop in shipment volume, a 1.4% growth in organic shipment volume was reported in Q4.

On an adjusted basis, the beverage maker printed £791.93 million in gross profit that marks an 8% growth as compared to the comparable quarter last year. Its comparable operating income saw a 2% growth and was recorded at £487.94 million in the fourth quarter.

Constellation Brands Refrained From Giving 2021 Financial Guidance

Citing the rising uncertainty due to the ongoing Coronavirus pandemic, the company refrained from giving its financial guidance for 2021. Constellation Brands also highlighted in its statement on Friday that it ended the last year with £66.34 million in cash and cash equivalents. At the end of February 2020, the company had £9136.76 million worth of long-term debt. Its total shareholders’ equity was noted at £9887.37 million.

According to Constellation Brands, it generated £2.12 billion in operating cash flow in fiscal 2020 while its free cash flow on an adjusted basis was posted at £1.47 billion.

Just a day earlier on Thursday, the beverage company had also declared 61 pence/share of quarterly dividend for Class A stock while the Class B was eligible for 55 pence/share.

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