LONDON, UK / ACCESSWIRE / October 6, 2016 / Active Wall St. announces its post-earnings coverage on Constellation Brands Inc. (NYSE: STZ). The company reported its financial results for the second quarter fiscal 2017 (Q2 FY17) on October 05, 2016. The Victor, New York-based company reported 17% and 19% y-o-y rise in its net sales and net income respectively, for Q2 FY17, outperforming market consensus estimates. Register with us now for your free membership at: http://www.activewallst.com/register/.

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Earnings Reviewed

In Q2 FY17, Constellation Brands' net sales surged to $2.02 billion from $1.73 billion recorded at the end of Q2 FY16. Net sales numbers for Q2 FY17 beat market consensus estimates of $1.96 billion. During the period, net sales were boosted by organic net sales growth of 13% on a constant currency basis and acquisition benefits.

The global beer producer's GAAP net income grew to $358.9 million, or $1.75 per diluted share, in Q2 FY17 from $302.4 million, or $1.49 per diluted share, in the prior year's comparable quarter. Furthermore, the company's Q2 FY17 non-GAAP net income surged to $364.4 million, or $1.77 per diluted share, from $317.6 million, or $1.56 per diluted share, in the year ago quarter. Non-GAAP net income for the reported period outperformed market consensus estimate of $1.66 per diluted share. The company reported a better-than-expected quarter results primarily driven by a strong consumer demand across various business segment.

Operational Metrics

In the quarter ended on August 31, 2016, Constellation Brands' operating income grew 27% y-o-y to $611 million from $620 million in the last year. The company's Q2 FY17 operating margin also surged 250 basis points to stand at 30.2% of net sales compared to 27.7% of net sales in Q2 FY16. In the reported quarter, its Beer segment's operating income increased 27%, primarily on organic volume growth, favorable pricing, and the Ballast Point acquisition, and was partially offset by higher marketing investment.

Segment Performance

Constellation Brands' Beer segment net sales for Q2 FY17 rose 20% y-o-y to $1.22 billion from $1.02 billion reported in Q2 FY16. The segment's Q2 FY17 shipment volume also increased 15% y-o-y to 73.9 million from 64.0 million in Q2 FY16.

The company's Wine and Spirits segment net sales grew 12% y-o-y in Q2 FY17 to $798.7 million from $713.9 million in Q2 FY16. Furthermore, the segment's reported shipment volume of $18.2 million in Q2 FY17, which was 7.1% higher than 17.0 million recorded in Q2 FY16.

Cash Matters and Balance Sheet

During the six months ended August 31, 2016, the company cash flow from operations increased to $1.05 billion from $803.1 million in the last year's comparable period. Furthermore, free cash flow for the first six months of fiscal 2017 totaled $676 million compared $508 million in the first six months of fiscal 2016. The company had cash and cash equivalents worth $177.3 million on August 31, 2016, which was above $83.1 million as on close of books on February 29, 2016.

Dividend

The company's Board of Directors declared a quarterly dividend of $0.40 per share of Class A Common Stock and $0.36 per share of Class B Common Stock, which will be payable on November 22, 2016, to all the shareholders on records as on November 08, 2016.

Acquisition Spree

On August 03, 2015, the company bought the Meiomi wine brand along with its assets. The company acquired Home Brew Ballast Point on December 16, 2015. Moreover, on April 29, 2016, Constellation purchased "The Prisoner Wine Company" portfolio of brands. Adding to its acquisition list, the company announced in its earnings release that it has agreed to purchase the Utah-based High West Distillery for approximately $160 million.

Earnings Guidance

For its full year FY17 outlook, the marketer of wine and spirits expects EPS to be in the range of $6.25 per share to $6.40 per share. For the year ending February 28, 2017, the company anticipates its beer business net sales to grow in the range of 16% to 17% with operating income growth in high teens. The company's management expects wine and spirits segment to report net sales growth in mid-single digit with mid to high single-digit growth range in the segment's operating income.

Stock Performance

Constellation Brands' share price finished yesterday's trading session at $168.60, advancing 1.66%. A total volume of 4.5 million shares exchanged hands, which was higher than the 3 months average volume of 964.53 thousand shares. The stock has advanced 7.67% and 29.60% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the company have gained 19.21%. The stock is trading at a PE ratio of 33.85 and has a dividend yield of 0.95%.

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