Constellation Brands (STZ) 2021 Q4 Financial Performance Review

The history of Constellation Brands Inc (NYSE:STZ) dates back to 1945 when founder Marvin Sands established Canandaigua Industries to sell bulk wine to bottlers in New York. Over the years, the company grew by expanding into new territories and partly by acquisitions.  Today, Constellation Brands is one the biggest producer of alcoholic beverages including beer, wine, and spirits. It is also the biggest importer of beer in the U.S. in terms of sales.

Constellation stock hasn’t gained much value in recent months amid the negative impact of Covid-19 on its sales. Restaurants, bars, and other gathering venues are operating at limited capacity, and as a result, demand for Constellation’s alcoholic beverages has dropped. Constellation stock rose about 15 percent in 2020, while it is nearly flat in terms of price change on a year-to-date basis.

The weak demand also weighed on its fourth-quarter results, though the company managed to beat expectations. Constellation recently reported earnings of $382.9 million, or $1.95 per share for the three months ended February 28, down from $398.4 million, or $2.04 per share in the comparable period of 2020.

Excluding certain items, the company reported adjusted earnings of $1.82 per share, as compared to $2.06 per share in the year-ago quarter. Analysts on average were looking for earnings of $1.58 per share. Revenue for the quarter inched up 3 percent to $1.953 billion, just above the consensus forecast of $1.9 billion.

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Speaking on the results, CFO Garth Hankinson said, “Constellation’s performance remained strong and resilient throughout the pandemic, driving record cash flow results for the year. In fiscal 2022, we expect to continue to have significant capital allocation flexibility, which will enable ongoing progress in returning cash to shareholders while making strategic investments to support long-term growth opportunities.”

Constellation also issued its earnings outlook for fiscal 2022. The company expects to report an adjusted profit in the range of $9.95 per share to $10.25 per share for the year, as compared to analysts’ average forecast of $10.43 per share.