Corona and Modelo Are Shrinking While Pacifico and Victoria Are Booming. Here's What That Means for Constellation Brands Stock.
Constellation showed some key green shoots as it aims to return to steady growth.
Overview
Against a challenging backdrop for beer and alcohol stocks, Constellation Brands (NYSE:STZ) reported better-than-expected results in its second-quarter earnings report. However, the stock was trading flat on Wednesday morning, showing that investors are still concerned about headwinds in the beer industry.
The company, which is best known as the domestic seller of Corona and Modelo, reported organic revenue growth of 6% to $2.63 billion, which easily beat expectations at $2.54 billion.
Details
However, looking under the hood, the growth numbers were not as strong as they might seem. Beer shipments, which measure sell-in to distributors and are recorded as revenue, rose 5.5%, while depletions, which better reflect consumer demand and measure sales from the distributor to the retailer, were down 0.6%. CEO Nicholas Fink explained that intentional distributor restocking to rebuild inventory drove the strong growth in shipments.
Source
Originally published at www.fool.com.