Constellation Shares Surge as Modelo Growth Drives Earnings Beat

(Bloomberg) — Constellation Brands Inc. jumped the most in almost three months as sales outpaced expectations and the producer of Modelo and Corona beer raised its guidance for the full year.The company now sees profit for the full year at $8.65 to $8.95 per share — 15 cents higher than the previous range. Revenue in the company’s first quarter of $2.1 billion also beat analysts’ average estimate.Key InsightsModelo has remained a standout even as U.S. consumers turn away from other big beer labels. Constellation has boosted its advertising budget to back the brands, and this is paying off as Modelo picked up market share.The beer growth is of extra importance to Constellation since it’s selling off roughly 30 wine and spirits brands. The company will rely more heavily on its Mexican beer going forward.Constellation said its profit in the quarter would have been higher if not for a loss on its investment in Canopy Growth Corp., the world’s most valuable marijuana company. While Canopy’s revenue is growing as the cannabis industry takes shape north of the border, it has yet to post a profit. The pot push has raised Constellation’s profile among investors.Market ReactionConstellation shares rose as much as 6.6% to $200.59 — the most since April 4. The stock had gained 17% this year through Thursday’s close.Get MoreFor more financial details, click here.For company statement, click here.–With assistance from Karen Lin.To contact the reporter on this story: Craig Giammona in New York at cgiammona@bloomberg.netTo contact the editors responsible for this story: Anne Riley Moffat at, Jonathan RoederFor more articles like this, please visit us at©2019 Bloomberg L.P.