Corona Importer Rallies After Cinco de Mayo Fuels EarningsBy and
CEO cites execution during holidays for market-share gains
Company hikes full-year profit forecast on higher beer sales
Cinco de Mayo is working out pretty well for Constellation Brands Inc.
The importer of Corona beer and other Mexican brands said brisk sales during holidays let it gain market share last quarter. That helped earnings top estimates and sent shares up as much as 7.5 percent on Thursday -- the biggest rally in almost three months.
“The first-quarter results for our beer business are a testament to the ongoing growth opportunities we have for our iconic portfolio of brands,” Chief Executive Officer Rob Sands said in a statement. “Excellent execution during the Cinco de Mayo and Memorial Day holidays led to significant share gains.”
Constellation, which also sells wine and liquor brands such as Svedka vodka, has been increasingly relying on beer to fuel growth. Its focus on Mexican brands had been seen as a liability after the election of President Donald Trump, who pledged to build a new wall between the U.S. and Mexico, but investors have shrugged off the threat this year.
The shares climbed to a record high of $197.41 on Thursday. They rose 5.2 percent to $193.29 at 2:48 p.m. in New York. Even before the gain, they were up 20 percent this year.
Constellation boosted its forecast for comparable profit per share to $7.90 to $8.10 for the full year, up from a prior estimate of $6.55 to $6.65. Profit during the quarter was $2.34 a share, exceeding analysts’ forecast of $1.98.
Wine and spirits sales fell 4 percent due to the divestiture of the company’s Canadian wine business.