Constellation Brands Inc raised its full-year profit forecast and topped Wall Street estimates for second-quarter sales and profit on Thursday, as it benefited from strong demand for Corona beers during the summer, sending shares up 4%.
The company launched the first major addition to the Corona franchise in nearly three decades earlier this year, the low-carb, low-calorie Corona Premier, aimed at seducing millennial consumers as it battles competition from craft beers.
Corona Premier and Corona Familiar, a product launched for Hispanic markets, have both continued to exceed expectations, Constellation said.
These additions, and its slightly more expensive brand Modelo, drove beer sales up about 11% to $1.53 billion (€1.32 billion) in the second quarter. Its wine and spirits business, which sells Nobilo and Meiomi wines, also reported 9.3% sales growth.
For the year ending February 2019, the Victor, New York-based company now expects to post an adjusted profit of between $9.60 and $9.75 per share, compared to its earlier forecast of $9.40 to $9.70 per share.
Constellation has also been in the spotlight as one of the first beverage makers to tap into Canada's lucrative marijuana market, investing an additional $4 billion in cannabis producer Canopy Growth in August.
Other companies, including rival Molson Coors Brewing, have been looking at ways to introduce cannabis-related products in Canada, with an eye to the possibilities if and when a wave of legalisation reaches more U.S. states.
Constellation said the investment in Canopy, which is expected to close at the end of October, would reduce profit for fiscal 2019 by $0.25 to $0.30 per share. It did not disclose further details on expenses related to the deal.
Net income attributable to the company rose to $1.15 billion (€0.99 billion), or $5.87 per share, in the three months ended Aug. 31, from $501.6 million, or $2.49 per share, a year earlier.
Excluding items, Constellation earned $2.87 per share, topping analysts' estimate of $2.59 per share, according to Thomson Reuters I/B/E/S.
Net sales rose 10.1% to $2.30 billion (€1.99 billion), also above the estimate of $2.25 billion (€1.95 billion).