Beer, Wine Outlook Is Strong: Constellation Brands CEO
Shares Constellation Brands surged more than 4 percent on Friday leaving the stock up 75 percent for the year after the wine, beer and spirits maker beat on earnings and raised its outlook.
Constellation Brands said it expects full-year earnings of between $2.00 and $2.10 per share versus an earlier forecast of $1.93 to $2.03 per share as it continues to build out its brand portfolio.
The company’s wine portfolio, which includes Robert Mondavi and Ravenswood, has been growing.
“People are buying more wine and the wine category is very robust in general,” Constellation Brands CEO Rob Sands told CNBC.
The company's imported Mexican beer business is also growing, with Sands pointing to strong interest from both the Latino and general population. "Those things favor continued growth in our beer business,” he said.
Constellation, which competes with companies like Anheuser-Busch Inbev , Sam Adams and Molson Coors in the beer business, will improve its position, after it buys the remaining half of its Crown Imports joint venture with Grupo Modelo. The deal will give it full control of distributing Corona Extra beer, the best-selling import, in the U.S.
"That's a a powerfully accretive deal for them" and has been one reason for the stock's massive run-up this year, D.A. Davidson analyst Tim Ramey told CNBCon Friday.
"We've also seen a really nice turn in the wine business," he added as pricing has firmed up.
(Disclosure: D.A. Davidson makes a market in Constellation Brands.)
-By Justin Menza, CNBC News Writer
Questions? Comments? Email us at consumernation@cnbc.com.
