Constellation Brands’ shares took a hit on Wednesday following release of its 3rd quarter earnings report.
The stock fell more than 12%, dropping $21.40 to $150.94 a share.
On an adjusted basis, the 3rd quarter earnings per share and revenue numbers beat Wall Street estimates. Earnings per share came in at $2.37 with net income of $303 million and revenues totaled $1.97 billion.
But the company also cut its guidance for the fiscal year. Constellation’s President and Chief Operating Officer, Bill Newlands, who will succeed Rob Sands as CEO in March, says that the company’s beer business continues to outperform the U.S. beer market by a wide margin.
But he says the company is disappointed with the performance of the wine and spirits business. He says Constellation is facing challenges with the low end of that portfolio and they are pursing strategic alternatives to deal with that.
Constellation also says it wrote down the value of its stake in the Canadian cannabis company, Canopy Growth by $164 million in the 3rd quarter.
During a conference call with investors, Sands said that Constellation “continues to be one of the best growth stories in the industry, “ led by its high-end beer business, and he says overall, the company’s business is strong and has excellent prospects for future growth.