Upcoming AWS Coverage on Castle Brands
LONDON, UK / ACCESSWIRE / January 9, 2017 / Active Wall St. announces its post-earnings coverage on Constellation Brands, Inc. (NYSE: STZ). The Company reported its financial results for the third quarter fiscal 2017 (Q3 FY17) on January 05, 2017. The Victor, New York-based Company reported a 10% and 50% y-o-y rise in its net sales and net income for Q3 FY17, outperforming market consensus estimates. Register with us now for your free membership at:http://www.activewallst.com/register/.
One of Constellation Brands' competitors within the Beverages - Wineries & Distillers space, Castle Brands, Inc. (NYSE: ROX), is estimated to report earnings on February14, 2017. AWS will be initiating a research report on Castle Brands following the release of its next earnings results.
Today, AWS is promoting its earnings coverage on STZ; touching on ROX. Get our free coverage by signing up to:
In Q3 FY17, Constellation Brands' net sales surged to $1.81 billion from $1.64 billion recorded at the end of Q3 FY16. Net sales numbers for Q3 FY17 beat market consensus estimates of $1.78 billion. During the period, net sales for beer rose 16% y-o-y with 12% y-o-y growth in organic net sales, primarily driven by volume growth and favorable pricing, and the acquisition benefit from Ballast Point.
The global beer producer's GAAP net income attributes to Constellation Brands grew to $405.9 million, or $1.98 per diluted Class A share and $1.82 per diluted Class B share, in Q3 FY17 from $270.5 million, or $1.33 per diluted Class A share and $1.22 per diluted Class B share, in the prior year's comparable quarter. Furthermore, the Company's Q3 FY17 non-GAAP net income attributed to Constellation Brands surged to $403.3 million or $1.96 per diluted class A share and from $289.1 million, or $1.42 per diluted class A share, in the year ago same quarter. Non-GAAP net income for the reported period outperformed market consensus estimates of $1.72 per diluted share.
In the quarter ended on November 30, 2016, Constellation Brands' gross profit came in at $891.4 million compared to $733.5 million in Q3 FY16. Operating income grew 19% y-o-y to $534.0 million during Q3 FY17 from $447.3 million in the last year. The Company's Q3 FY17 operating margin also surged 220 basis points to stand at 29.5% of net sales compared to 27.3% of net sales in Q3 FY16.
Constellation's Beer segment net sales for Q3 FY17 rose 16% y-o-y to $964.6 million from $831.3 million reported in Q3 FY16. The shipment volume also increased 12.3% y-o-y in FY17 to 57.7 million from 51.4 million in Q3 FY16.
The Company's Wine and Spirits segment's net sales grew 5% y-o-y in Q3 FY17 to $845.9 million from $809.2 million in Q3 FY16. Furthermore, the segment reported shipment volume of $18.3 million in Q3 FY17 which was marginally below the $18.4 million recorded in Q3 FY16.
Cash Matters and Balance Sheet
During the nine months ended November 30, 2016, the Company cash flow from operations increased to $1.42 billion from $1.09 billion in the last year's comparable period. Furthermore, the free cash flow for the first six months of fiscal 2017 totaled $824.1 million compared $577.8 million in the first nine months of fiscal 2016. The Company had cash and cash equivalents worth $197.3 million on November 30, 2016, which was above $83.1 million as on close of books on February 29, 2016.
Dividend and Share Repurchase
The Company's Board of Directors has declared a quarterly dividend $0.40 per share of Class A Common Stock and $0.36 per share of Class B Common Stock, which will be payable on February 23, 2017, to all the shareholders on records as on February 09, 2017.
During Q3 FY17, the Company repurchased 2.4 million shares of common stock for $367 million. It has bought back 5.4 million shares for $823 million through December 31, 2016, under its share repurchase program. Furthermore, in November 2016, the Company's Board of Directors authorized a new share repurchase program of up to $1 billion of the Company's common stock in addition to then existing $1 billion share repurchase program. As of December 31, 2016, the Company has fully utilized its prior $1 billion share repurchase authorization and has $847 million remaining under its new share repurchase authorization.
In its outlook for full year FY17, the marketer of wine and spirits expects GAAP EPS to be in the range of $7.55 per share to $7.65 per share. For the year ending February 28, 2017, the Company anticipates its beer business net sales to grow in the range of 16% to 17% with operating income growth in high teens. The Company's management expects wine and spirits segment to report net sales growth in mid-single digit with mid- to high-single digit growth range in the segment's operating income.
At the closing bell, on Friday, January 06, 2017, Constellation Brands' stock climbed 1.83%, ending the trading session at $149.44. A total volume of 4.44 million shares were traded at the end of the day, which was higher than the 3-month average volume of 1.91 million shares. In the last month and previous twelve months, shares of the Company have advanced 0.99% and 0.85%, respectively. The Company's shares are trading at a PE ratio of 27.77 and have a dividend yield of 1.07%.
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