A summer of boozy brunches is taking shape as the global economy continues its recovery from the COVID-19 pandemic.
“We are seeing a lot of people return to the on-premise, which is obviously good for us,” Constellation Brands CEO Bill Newlands said on Yahoo Finance Live.
To be sure, signs of a bar recovery appeared on the top and bottom lines of the maker of Corona and Modelo beer.
Constellation Brands said this week that sales in its fiscal fourth quarter rose 8% from a year ago. Despite inflationary pressures in areas like labor and packaging, the company’s operating profits increased 17% year over year.
Beer sales rose 14% in the quarter, a quicker pace than the 11% gain for the full fiscal year. Wine sales dropped 7% from a year ago.
“Modelo is on fire,” Newlands added.
Here is how Constellation Brands performed compared to Wall Street profit forecasts:
Constellation issued relatively upbeat guidance for its new fiscal year.
For the full fiscal year, Constellation is looking for beer sales growth of 7% to 9% and for wine sales to drop 1% to 3%. The company sees earnings of $11.20 to $11.50 a share for the year. Analysts had expected $11.27 a share.
“Altogether, we walk away from Constellation’s FY4Q22 earnings seeing the company’s FY23 outlook as relatively conservative, especially as it relates to beer profits/margin. While we agree the cost environment remains challenging across the supply chain, demand in beer remains remarkably robust, the company has reasonably solid visibility into its cost structure from hedges implemented, and its planned pricing actions are admittedly ‘judicious’ — leaving opportunities for greater price/mix and margin upside as the year progresses,” said Deutsche Bank analyst Steve Powers.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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