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Cramer's 3 Highlights From Constellation Brands' Beat-And-Raise Q2

Cramer's 3 Highlights From Constellation Brands' Beat-And-Raise Q2

Alcoholic beverage maker Constellation Brands, Inc. (NYSE: STZ) reported beat-and-raise second-quarter results Thursday.

What Happened

Constellation Brands said it earned $2.87 per share in Q2 on revenue of $2.3 billion versus expectations of $2.60 per share and $2.25 billion. By segment, beer sales rose 10.5 percent from the same quarter a year ago to $1.5271 billion, and wine and spirits sales rose 9.3 percent to $772 million.

Operating income rose 9 percent from a year ago to $765 million. The company highlighted a $639-million unrealized gain from its investment in Canopy Growth Corp (NYSE: CGC).

Why It's Important

Constellation's earnings report is particularly encouraging for several reasons, Jim Cramer said during CNBC's "Squawk on the Street" segment. They are: 

  • A re-acceleration in beer, especially in Corona and Corona Premier.
  • Operating margins are no longer a concern and hit a record high of 41.3 percent.
  • A "comeback" in wine.

What's Next

Constellation lifted its full-year 2019 EPS outlook to a range of $9.60-$9.75 versus expectations of $9.30 per share.

The guidance implies it is the only company within the entire packaged goods sector that is increasing estimates "across the board," Cramer said. 

Constellation said its multibillion-dollar investment in Canopy Growth is "one of the most significant growth opportunities of the next decade," according to Cramer.

This telegraphs CEO Rob Sands' desire to be the "king" of the space over time, as he is one of the most impressive "forward thinkers" in the space," Cramer said.

Related Links:

Jefferies: Constellation Brands Is Our Top Large-Cap Growth Idea

Cowen: Constellation Brands Stakeholders Have Reason To Be Confident In Canopy Growth

Public domain photo via Wikimedia. 


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