Constellation Brands‘ (NYSE:STZ) stock fell in the wake of its fiscal fourth-quarter earnings report. Investors looked past the good news the company announced on market share and profits to focus instead on the beer giant’s prediction of rising costs ahead. Constellation Brands will spend more in areas like marketing and packaging in fiscal 2022, according to executives, along with huge outlays in its Mexican brewery expansion project. But these costly initiatives will bolster the company’s already dominant position in the U.S. beer industry, management said in a conference call with Wall Street analysts. Let’s look at some highlights from that discussion.

“The U.S. beer category is healthy and exhibiting strong growth led by the high-end segment,” CEO Bill Newlands stated. Constellation Brands estimates that the retail segment of U.S. beer (which excludes bar and restaurant sales) grew at a 15% clip during 2020 as the pandemic disrupted traditional demand trends. But the premium niche, which includes imported brands like Modelo and Corona, grew more than 25%. The Modelo franchise was a standout this past year, rising to the third spot in the U.S. sales chart. Corona and its variations, including low-calorie Premier and the hard seltzer iteration, helped keep overall beer sales in solidly positive territory even as demand in the restaurant and bar segment plunged more than 50%.

Read the full article.

JOIN OUR FREE NEWSLETTER

Remain an expert and save time ? Take few seconds to complete the registration form. Click here !