A worker stacks cases of Constellation Brands Corona beer for delivery at Euclid Beverage LLC’s warehouse in Peru, Illinois.
Daniel Acker | Bloomberg | Getty Images
Constellation Brands shares fell Thursday after the wine, beer and spirits company reported ongoing supply chain costs offsetting sales growth in its beer category.
The stock closed up nearly 9% on Thursday.
The company, which makes Corona beer and Svedka vodka, also lowered its profit outlook for the fiscal year. Constellation said it now forecasts earnings of $11 to $11.20 per share for the year, up from its previous guidance of $11.20 to $11.60 per share.
For the three months ended November 30, Constellation’s beer segment reported net sales growth of 8% year over year, driven by continued growth of its Modelo Especial and Modelo Chelada brands.
However, the company cited higher costs for raw materials, packaging and logistics, brewery expansions and marketing offsetting the growth in beer sales.
In a conference call with analysts Tuesday morning, Chief Executive Officer Bill Newlands added that toward the end of the fiscal third quarter, the company’s beer business was hit by a “recent set of headwinds,” including poor weather and economic conditions in California.
Operating margin in the beer business fell to 37.5% during the quarter from 41.3% a year earlier.
The company said it plans to continue raising prices on its beer products to offset higher operating costs plaguing its supply chain.
In the third quarter, Constellation’s net income fell to $467.7 million, or $2.52 per share, from $470.8 million, or $2.48 per share, a year earlier.
https://www.cnbc.com/2023/01/05/constellation-brands-stz-q3-earnings.html Constellation Brands (STZ) Q3 results