USA – American beverage company, Constellation Brands reported a loss of US$525.2 million during its second quarter ending August impacted by a US$484 million loss on an investment in Canopy Growth, a Canadian cannabis company.
Post transaction, Canopy reported in its first-quarter earnings that it recorded total loss of US$960 million, including a US$900 million charge related to warrants from its investor agreement with Constellation Brands.
Outside of the investment in cannabis, Constellation reported improved performance in the beer category. Modelo sales grew 15% during the quarter, and Corona Refresca and Corona Premier also posted strong growth.
Constellation recorded a 2% rise in net sales to US$2.34 billion boosted by a 7.4% growth in sales across its beer business. However, wine and spirits net sales declined by 8.9%.
“The winning streak for our beer business continues with Modelo Especial generating the most growth in the entire US beer category, while Corona remains the number 1 high-end beer brand family,” said Constellation CEO Bill Newlands.
“This powerful combination gives us confidence in high-single-digit beer growth for years to come. Our wine and spirits innovation pipeline is primed to launch impactful product introductions, as we head into the key selling season this fall.”
Constellation chief finance officer David Klein added, “We continue to deliver impressive beer business operating performance and cash flow results.
“The share repurchases we made during the quarter reflect the confidence we have in our long-term business model, and our ongoing commitment to return cash to shareholders.”
The company has also unveiled plans of launching a new Corona-brand seltzer product next year. The spiked seltzer Constellation plans to launch will come in four flavors, at least initially: tropical lime, mango, cherry and blackberry lime.
“We believe that seltzers are here to stay and will therefore accelerate the volume shift into category from the low end to the high end,” Bill Newlands said.