Constellation Brands Swung to 2Q Loss Driven by Cannabis Venture
October 06 2022 - 9:16AM
Dow Jones News
By Sabela Ojea
Constellation Brands Inc. swung to a loss in the fiscal
second-quarter over its investment in the cannabis venture Canopy
Growth Corp.
The brewer of Corona beer for U.S. consumers on Thursday said it
recorded a loss for the three months ended Aug. 31 of $1.15
billion, or $6.30 a share, compared with a profit of $1.5 million,
or 1 cent a share, a year earlier.
Stripping out one-time items, including Canopy's losses,
Constellation's adjusted earnings per share were $3.17. Analysts
surveyed by FactSet had forecast adjusted earnings of $2.82 per
share.
Constellation Brands, which owns 36% of Canopy's total
shareholding and is the cannabis company's top stakeholder, said it
booked a $1.06 billion impairment charge for the quarter for Canopy
after evaluating the equity -method investment in the company.
Excluding Canopy, Constellation Brands said per-share earnings for
the quarter would have been $3.33.
The alcoholic-beverages company's net sales rose 12% to $2.86
billion, or $2.66 billion after excise taxes. Analysts surveyed by
FactSet had been forecasting sales of $2.51 billion.
Beer sales for brands such as Corona and Modelo grew 15%
year-over-year to $2.14 billion for the fiscal quarter, the company
said, adding that it plans to invest in its Mexico-based capacity
to support long-term growth across its high-end Mexican beer
portfolio.
Constellation's wine and spirits sales increased slightly to
$515.8 million from $509.8 million, the company said.
The board declared a quarterly cash dividend of 80 cents a
share.
Constellation Brands on Thursday also said it has agreed to sell
to the Wine Group LLC some of its mainstream and premium wine
brands, including "Cooper & Thief" and "the Dreaming Tree," as
it shifts its strategy toward fine wine brands and craft
spirits.
Write to Sabela Ojea at sabela.ojea@wsj.com
(END) Dow Jones Newswires
October 06, 2022 09:01 ET (13:01 GMT)
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