LONDON, UK / ACCESSWIRE / July 11, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Constellation Brands, Inc. (NYSE: STZ), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=STZ, following the Company's reporting of its financial results for the first quarter fiscal 2018 on June 29, 2017. The wine, liquor, and beer Company outperformed market expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For its first quarter fiscal 2018, Constellation Brands generated consolidated net sales of $1.94 billion, up 3% on a y-o-y basis. The Company's organic net sales growth was 7%, partially offset by the net impact of the Canadian wine business divestiture fewer acquisition benefits.

Constellation Brands' consolidated reported operating income totaled $568 million for Q1 FY18, up 3% on a y-o-y basis, while comparable basis operating income surged 22% to $669 million. The Company's comparable adjustments affecting operating income totaled a net loss of $101 million compared to a net gain of $4 million for the same period last year. For the reported quarter, the Company recorded $87 million non-cash impairment charge to the trademarks associated with the Ballast Point business driven by the performance of the portfolio.

Constellation Brands' net income for Q1 FY18 totaled $402.8 million, or $2.00 per share, compared to $318.3 million, or $1.55 per share, for Q1 FY17. The Company's adjusted EPS was $2.34, ahead of Wall Street's expectations of $1.98 per share.

Segment Results

During Q1 FY18, Constellation Brands' net sales for beer increased 8% on a y-o-y basis driven by volume growth and favorable pricing. Wine and spirits net sales decreased 4% in the reported quarter as a 6% increase in organic net sales driven primarily by benefits from the mix, price and volume growth was more than offset by the net impact of the Canadian wine business divestiture fewer acquisition benefits.

Constellation Brands' Beer operating income increased 22% on a y-o-y basis in Q1 FY18, primarily due to lower cost of product sold, volume growth, and favorable pricing. The Company's wine and spirits operating income grew 22% on the back of favorable mix and pricing, acquisition benefits, and volume growth, partially offset by the Canadian wine business divestiture.

Operating Cash Flow and Free Cash Flow

For Q1 FY18, Constellation Brands' operating cash flow totaled $382 million, an increase of 10% on a y-o-y basis. The Company's free cash flow for the reported quarter totaled $165 million compared to $177 million for the prior year's same quarter. This reflects higher operating cash flow, more than offset by higher capital expenditures.

Canadian Wine Business Divestiture

Constellation Brands completed the sale of its Canadian wine business to Ontario Teachers` Pension Plan in December 2016. For Q1 FY17, net sales and operating income which are no longer part of the wine and spirits segment results post the sale of the Canadian wine business totaled $90 million and $10 million, respectively. For fiscal 2017, through the date of divestiture, net sales and operating income for the divested business totaled $311 million and $50 million, respectively.

Quarterly Dividend

On June 28, 2017, Constellation`s board of directors declared a quarterly cash dividend of $0.52 per share of Class A Common Stock and $0.47 per share of Class B Common Stock, payable on August 23, 2017, to stockholders of record as of the close of business on August 09, 2017.

Outlook

For FY18, Constellation Brands is forecasting reported earnings in the range of $7.55 - $7.75 per share and comparable earnings in the band of $7.90- $8.10 per share. For FY18, the Company's beer business continues to target net sales growth in the range of 9%-11% and operating income growth is now targeted in the range of 13%-15%. For the wine and spirits business, the Company continues to expect net sales to decrease in the range of 4%- 6% and operating income to be flat.

Stock Performance

On Monday, July 10, 2017, the stock closed the trading session at $193.82, rising slightly by 0.16% from its previous closing price of $193.52. A total volume of 914.32 thousand shares has exchanged hands. Constellation Brands' stock price surged 13.76% in the last three months, 29.70% in the past six months, and 16.77% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have rallied 26.42%. The stock is trading at a PE ratio of 25.78 and has a dividend yield of 1.07%. At Monday's closing price, the stock's net capitalization stands at $37.85 billion.

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