Constellation Brands Inc. on Oct. 3 reported second-quarter earnings for fiscal 2020 that beat analysts' expectations and raised its full-year non-GAAP EPS estimates.
The Victor, N.Y.-based maker of beer and wine posted comparable, or non-GAAP, EPS of $2.72 for the company's fiscal second quarter ended Aug. 31, above the S&P Global Market Intelligence mean consensus analyst estimate for normalized EPS of $2.62.
The company also said it booked a $484.4 million loss on a reported basis, or $54.7 million on a comparable basis, on its investment in cannabis producer Canopy Growth Corp. The comparable figure is higher than the $38.5 million non-GAAP loss that Constellation forecast in August. On a GAAP basis, the loss and an $839 million decrease in the fair value of the Canopy investment swung Constellation's reported loss per share to $2.77 for the quarter.
The Svedka distiller raised its comparable EPS expectations for fiscal 2020 to a range of $9.00 to $9.20, excluding equity losses from Canopy Growth, from previous guidance of comparable EPS in a range of $8.65 to $8.95. Constellation said the guidance is based on the assumption that it will close the sale of its low-cost wine and spirits business at the end of the third quarter of fiscal 2020 and close the sale of the Black Velvet Canadian Whisky brand at the beginning of November 2019.
Fiscal 2020 net sales for wine and spirits will decline between 15% and 20% over the previous year, and operating income will drop approximately 25%, reflecting the sale of a portion of Constellation's portfolio.
Constellation, the No. 3 beer-maker in the U.S., said comparable net income attributable to the company for the quarter was $529.4 million, down 6% from the same quarter in 2018. Analysts expected Constellation Brands to post $509.82 million in net income excluding exceptions, according to Market Intelligence.
Net sales for the quarter were $2.34 billion, a 2% increase over the previous year.
Constellation said it repurchased approximately 266,000 shares of common stock for $50 million.
Shares in Constellation Brands declined about 3% to $200.69 in early trading Oct. 3. The alcohol company reported earnings before U.S. markets opened.
