Constellation Brands (NYSE: STZ) reported fourth quarter earnings Thursday that exceeded financial analysts’ expectations. The performance in Q4, fiscal year 2021 for the beverage maker, was the result of improved sales of its Corona Hard Seltzer in the US and better margins on wine and spirits.
Significant to note is that Constellation counts Alternative Beverage Alcohol (ABA), including hard seltzer, in its Beer category. The earnings conference call scheduled for later today could shed light on subcategory performance.
The company had been shedding low-margin wine and spirits brands in a strategic move to improve margins results.
Constellation’s Q4, which ends in February each year, had diluted net earnings of $1.95 per share, which beat the consensus forecast by 25%, which expected $1.56. It’s still a year over year decline of 5.3%, but the improvement points to better times ahead.
Revenue in the last quarter was also better than predicted. Revenue of $1.953B was up 2.63% vs the same period last year, but $1.87B was forecast.
A further 1.1% could be added to the most recent quarter when comparing to prior year. Last year was a leap year, so the reporting period included 90 selling days, versus 89 days this year.
The company reported a sharp increase in marketing expenses for the quarter. Marketing as a percent of net sales was 12.5% versus 8.7% for fourth quarter fiscal 2020.
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