Beer Is The Only Thing Constellation Brands Does Not Have To Worry About
Portfolio Pulse from Upwallstreet
Constellation Brands (NYSE:STZ) reported Q3 financials below expectations due to high inflation affecting demand for its high-priced spirits. Sales were $2.47 billion, missing estimates of $2.54 billion. Organic net sales for premium wines and spirits dropped 7%, with an expected annual drop of 7-9%. Beer sales grew 4%, benefiting from smaller pack sizes and competitor Anheuser-Busch InBev's (NYSE:BUD) social media backlash. Boston Beer (NYSE:SAM) reported flat revenues but is innovating with new flavors. Constellation faces challenges with high packaging costs, competition, and operating expenses but maintains its fiscal 2024 profit forecast.
January 12, 2024 | 2:57 pm
News sentiment analysis
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NEGATIVE IMPACT
Anheuser-Busch InBev faced consumer backlash from a social media campaign, which may have benefited Constellation Brands' beer sales.
The negative publicity from BUD's social media campaign could lead to a short-term negative impact on its stock as consumers may shift to competitors like STZ.
CONFIDENCE 75
IMPORTANCE 50
RELEVANCE 60
NEGATIVE IMPACT
Molson Coors Beverage Company, like Constellation Brands, has resorted to price hikes to manage rising production costs.
Price hikes by TAP to mitigate rising costs could negatively impact demand in the short term, potentially leading to a negative impact on the stock.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 50
NEUTRAL IMPACT
Boston Beer reported flat YoY revenues but is focusing on product innovation with new flavors and plans to launch vodka-based hard tea.
While SAM's flat revenue indicates no significant growth, its innovation efforts could maintain investor interest, leading to a neutral short-term impact.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
Constellation Brands reported lower than expected Q3 results with a notable decline in premium wines and spirits sales, but beer sales grew. Maintained fiscal 2024 profit forecast.
Despite the miss in Q3 sales, the maintained profit forecast and growth in beer sales could balance investor sentiment, leading to a neutral short-term impact.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100