Constellation Brands (NYSE: STZ) this morning reported its first quarter 2022 financial results. The company reported net sales of $2.03 billion, along with a net loss of $908.1 million attributable to the company.
Sales were up on a year over year basis from $1.96 billion to $2.03 billion on a net basis. Gross profits on these sales amounted to $1.12 billion, with the company then managing to eek out an operating income of $75.1 million, after SG&A expenditures of $378 million and an impairment of a brewery in construction of $665.9 million.
The impairment was a result of “the current state of activities in Mexicali.” The company is reportedly working with government officials to pursue various forms of recovery of the capitalized costs related to the brewery.
As a result of the impairment, and a loss from unconsolidated investments of $899.2 million, the company posted a net loss attributable to the firm of $908.1 million, or a loss of $4.74 per share. The firm indicated that on a “comparable basis” it posted earnings per share of $2.33.
Despite the net income loss, the company posted a notable $716.0 million in operating cash flow.
In terms of outlook, the company is expecting to post fiscal year 2022 earnings per share of $2.70 to $3.00 per share. On a comparable basis, which excludes Canopy Growth, the company estimates that it will post earnings per share of $10.00 to $10.30. This EPS is off the back of operating cash flow between $2.4 to $2.6 billion. The guidance also does not take into consideration the changes in value of the firms investment in Canopy.
In terms of Canopy Growth, the company continues to have a major impact on the results of Constellation. The firm recorded a $745 million decrease in the fair value of the company during the quarter, while the company recorded a $155.8 million loss related to the firms share of Canopy’s losses for the period.
Constellation Brands last traded at $232.00 in premarket trading on the NYSE.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
