By Will Feuer
Constellation Brands Inc. posted higher first-quarter sales and swung to a profit as demand for beer remained strong amid surging transportation, brewing and raw-material costs.
The Victor, N.Y.-based beer, wine and spirits maker logged net income attributable to the company of $389.5 million for the three months ended May 31, compared with a loss of $908.1 million a year earlier. Earnings were $2.06 a share, compared with a loss of $4.74 a share.
The company's year-ago loss included a $665.9 million impairment charge for brewery construction in progress in Mexico.
Excluding one-time items, Constellation posted adjusted earnings of $2.66 a share. Analysts polled by FactSet were expecting adjusted earnings of $2.52 a share.
Sales rose to $2.54 billion, before excise taxes, from $2.19 billion last year. Analysts surveyed by FactSet were expecting sales of $2.17 billion.
The company saw 21% growth in beer sales and 2% growth in wine sales, it said. The company said that its operating margin in both its beer and wine business contracted as an increase in cost of goods sold outpaced price increases and other efforts to protect profits.
Also in the recently ended quarter, Constellation Brands recognized a $22 million decrease in the fair value of its 2017 investment in cannabis company Canopy Growth Corp. Constellation Brands has recognized a $556 unrealized loss since its initial investment in the company.
Write to Will Feuer at Will.Feuer@wsj.com
(END) Dow Jones Newswires
June 30, 2022 07:56 ET (11:56 GMT)Copyright (c) 2022 Dow Jones & Company, Inc.