Shares of Constellation Brands (NYSE: STZ), the parent company behind well-known global alcoholic brands including Corona, Modelo, Robert Mondavi among others, hit a new 52-week high of $173.55 on Wednesday after the company reported its second quarter results.
Constellation said that it earned $1.77 per share in the quarter on revenue of $2.02 billion. Wall Street analysts were expecting the company to earn $1.66 per share on revenue of $1.97 billion.
Net income for the quarter rose 19 percent from a year ago to $359 million as the company reported an organic growth of 13 percent on a constant currency basis.
Investors have come accustomed to Constellation’s earnings report which more often than note include a top-and-bottom line beat. This is also reflected in the fact that its stock is higher by nearly 20 percent since the start of 2016, more than 25 percent over the past year and a staggering 838 percent return over the past five years.
“During the second quarter, our beer business contributed 60% of IRI category dollar growth for the U.S. beer industry and continues to outperform the high end of the market, with accelerating growth trends versus the previous quarter, and overall share gains driven by Corona Extra and Modelo Especial,” Rob Sands, president and chief executive officer, Constellation Brands in a press release. “Strong consumer demand and excellent marketplace execution helped us to win the July 4th holiday. These excellent results are driving the upward revision to our EPS target for the year. In addition, Ballast Point continues to expand distribution and achieved strong, double-digit depletion growth for the quarter.”
Looking forward to the full fiscal year 2017, the company now expects to earn $6.30 to $6.45 per share. This represents an increase from the prior guidance management offered which was for an earnings per share in the range of $6.25 to $6.40.
In conjunction with Constellation’s second quarter earnings print, the company also announced it has entered into an agreement to acquire High West Distillery, including all of its operations and portfolio of alcoholic brands.
The High West portfolio includes well known brands of whiskey, including Prairie Bourbon, Double Rye! And the Rendezvous Rye and Campfire, a blend of scotch, bourbon and rye whiskey.
The acquisition gives Constellation Brand direct exposure to the high-end craft whiskey segment and a brand that has achieved double-digit volume growth on a year-over-year basis for the past three years.
The transaction is expected to close by the end of the month.