Constellation Brands, which distributes and markets Corona beer, is the fourth-largest brewer and second-largest wine maker in the U.S. market.AMY SANCETTA
Constellation Brands Inc on Friday reported a lower-than-expected quarterly profit due to higher marketing and transportation costs, leading the Corona beer maker to maintain its full-year earnings forecast that missed estimates.
The company’s shares fell 5 per cent in premarket trading.
Constellation said higher freight costs, the rising U.S. dollar and increased marketing hit the first-quarter operating margin of its beer business by 230 basis points at 37.8 per cent.
The company said marketing expenses rose 1.1 per cent as it had to make upfront investments to promote its new beers, Corona Premier and Corona Familiar.
The maker of Robert Mondavi wine and Svedka vodka reaffirmed its full-year earnings forecast of US$9.40 to US$9.70 per share, well under analysts’ estimate of US$9.73, according to Thomson Reuters.
Net income attributable to the company rose to US$743.8-million, or US$3.77 per Class A share, in the first quarter ended May 31, from US$398.5-million, or US$1.98 per share, a year earlier.
Excluding items, the company earned US$2.20 per share, missing analysts’ average estimate of $2.43.
Net sales rose 6 per cent to US$2.05-billion.