A worker stacks cases of Constellation Brand’s Corona beer for distribution at the Euclid Beverage LLC warehouse in Peru, Illinois.
Daniel Acker | Bloomberg | Getty Images
shares of Nakshatra Brand On Thursday the wine, beer and spirits company reported ongoing supply chain costs offset sales growth in its beer category.
The stock closed down nearly 9% on Thursday.
The maker of Corona Beer and Svedka Vodka has also cut its earnings estimates for the financial year. Constellation said it now anticipates earnings of $11 to $11.20 per share for the year, up from its previous guidance of $11.20 to $11.60 per share.
For the three months ended November 30, Constellation’s beer segment reported 8% year-over-year net sales growth, driven by continued growth of its Modelo Especial and Modelo Chelada brands.
However, the company cited higher costs from raw materials, packaging and logistics, brewery expansion and marketing, which offset the increase in beer sales.
In a conference call with analysts Tuesday morning, Chief Executive Officer Bill Newlands said “a series of recent constraints” affected the company’s beer business, including poor weather at the end of the fiscal third quarter and economic conditions in California.
Its operating margin in the beer business declined to 37.5% during the quarter, from 41.3% a year ago.
The company said it plans to continue offering price increases on its beer products to match higher operating costs affecting its supply chain.
For its third quarter, Constellation’s net income fell to $467.7 million, or $2.52 per share, from $470.8 million, or $2.48 per share, a year earlier.