Corona and Modelo Are Shrinking While Pacifico and Victoria Are Booming. Here's What That Means for Constellation Brands Stock.
Constellation showed some key green shoots as it aims to return to steady growth.
Amid a tough period for beer and alcohol companies, Constellation Brands (NYSE:STZ) posted stronger-than-anticipated earnings in its second quarter. Yet, the stock remained unchanged on Wednesday as investors remain cautious about challenges in the beer industry. The company, renowned for selling Corona and Modelo domestically, disclosed organic revenue expansion of 6% to $2.63 billion, exceeding forecasts of $2.54 billion.
Nevertheless, delving deeper into the figures, the growth figures appeared less robust than they may appear. Beer shipments, indicating sell-in to distributors and recorded as revenue, grew by 5.5%, while depletions, reflecting consumer demand and measuring sales from distributor to retailer, declined by 0.6%. CEO Nicholas Fink clarified that purposeful distributor restocking to replenish inventory contributed to the robust growth in shipments.
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