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Constellation Brands Raises Earnings Outlook - Quick Facts

Constellation Brands, Inc. (STZ) has increased its fiscal 2020 comparable basis earnings per share outlook to $9.00 - $9.20. Analysts polled by Thomson Reuters expect the company to report profit per share of $8.43, for the fiscal year. Analysts' estimates typically exclude special items. The beer business continues to target 7 percent to 9 percent net sales and operating income growth for fiscal 2020. The wine and spirits business now expects fiscal 2020 net sales and operating income to decline 15 percent to 20 percent and approximately 25 percent, respectively. Shares of Constellation Brands were down 3 percent in pre-market trade on Thursday.

Also, the company raised its fiscal 2020 operating cash flow target to approximately $2.2 billion and free cash flow projection to $1.3 - $1.4 billion. As a result of the Wine and Spirits and Black Velvet transactions, a cost reduction plan is expected to be implemented for fiscal 2020 and 2021 to address stranded costs.

For the second-quarter, the company reported comparable basis earnings per share of $2.72, including Canopy Growth equity losses of $0.20, a decline of 5 percent from prior year. Excluding Canopy Growth equity losses, comparable basis earnings per share was $2.91, for the quarter, up 1 percent year-on-year. On average, 17 analysts polled by Thomson Reuters expected the company to report profit per share of $2.60, for the quarter.

Second-quarter comparable net sales were $2.34 billion, an increase of 2 percent from prior year. Analysts expected revenue of $2.34 billion, for the quarter. The company's Wine and spirits business performance continues to be impacted by transition activities with distributors.

On October 2, 2019, Constellation's board declared a quarterly cash dividend of $0.75 per share of class A common stock and $0.68 per share of class B common stock, payable on November 22, 2019, to stockholders of record as of the close of business on November 8, 2019.

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