By Dhirendra Tripathi
Investing.com – Constellation Brands (NYSE: STZ ) rose 2.7% Wednesday on strength in its beer business.
Net sales and profit growth in beer was in the double digits as the company reaped the surge in demand after a year of the pandemic. It gained market share, led by Modelo Especial, Corona Extra, and Corona Hard Seltzer Variety.
Driven by a 7% to 9%increase in beer sales for the ongoing fiscal 2022 ending February 28, the brewer expects its adjusted EPS to come between $10 and $10.30.
The company also strengthened its ongoing share repurchase program.
Under an accelerated share repurchase, Constellation will repurchase $500 million of its class A common stock in the second quarter. The repurchased shares will form part of the treasury stock.
The price for shares will be paid primarily with cash on hand and will be completed under the company’s current share repurchase authorization, which has approximately $3.4 billion remaining.
The share buyback is in line with the alcohol maker’s plan to return $5 billion to shareholders through fiscal 2023.
Net loss widened by five times to $908.1 million from $177.9 million in last year's quarter ended May 31.
Constellation lost $2.33 a share in the first quarter on revenue of $2.02 billion in the year-ago quarter. Revenue rose 3.3% to $2.03 billion. Analysts were looking for EPS of $2.36 on revenue of $2.03 billion.
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