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Constellation Brands’ Q4 Sales: Analysts’ Expectations

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Fourth-quarter expectations

Constellation Brands’ (STZ) sales have beat analysts’ expectations for four consecutive quarters. The company’s sales in the third quarter, which ended on November 30, 2018, rose 9.5% to $1.97 billion and beat analysts’ forecast of $1.91 billion. Constellation Brands’ third-quarter sales were driven by the continued demand for its Mexican beer portfolio. The beer segment’s third-quarter sales rose 16.0% to $1.2 billion due to the performance of the Modelo and Corona brands. The brands benefited from innovations and strong distribution gains. The wine and spirits segment’s sales rose 0.4% to $762.8 million in the third quarter. The impact of higher pricing was partially offset by an unfavorable product mix.

Analysts expect Constellation Brands’ sales in the fourth quarter of fiscal 2019 to fall 1.8% to $1.73 billion due to tough comparisons with the fourth quarter of fiscal 2018. Softness is expected in US depletion trends in the wine and spirits segment.

Constellation Brands’ net sales grew 8.6% to $6.3 billion in the first nine months of fiscal 2019 due to a 12.3% rise in the beer segment’s sales to $4.1 billion and 2.4% growth in the wine and spirits segment’s sales to $2.2 billion.

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Fiscal expectations

Constellation Brands expects the beer segment’s sales growth to be at the high end of its guidance range of 9%–11% in fiscal 2019. Following the third-quarter performance, Constellation Brands’ outlook for the wine and spirits segment’s sales reflects a decline in the low-single digits.

Analysts expect Constellation Brands’ net sales to rise 6.1% to $8.1 billion in fiscal 2019 due to the strong beer business. Anheuser-Busch InBev’s (BUD) revenues fell 3.2% to $54.6 billion in 2018 on a reported basis. Anheuser-Busch InBev’s organic revenues rose 4.8% in 2018 due to premiumization and revenue management initiatives.

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