Reuters: Constellation Brands Forecast Weak; Shares Slump
Constellation Brands Inc (STZ.N) forecast earnings for its current fiscal year well below Wall Street estimates, as it spends more to market new wines, sending its shares down as much as 13.9 percent and making it the top loser on the New York Stock Exchange.
The world's largest branded wine maker said it expects sales this year to grow in line with the U.S. wine and spirits industry, which is thawing out as the economy recovers and more people go to bars and restaurants.
But profit growth will be tempered by marketing and sales investments, said the company, which has added wines like Simply Naked, Primal Roots and The Dreaming Tree to a portfolio that already includes Robert Mondavi and Ravenswood.
The company also cited a sharp drop in free cash flow this year due to the absence of tax benefits that boosted cash flow in fiscal 2012.
Constellation said on Thursday that it expected earnings of $1.93 to $2.03 per share, excluding one-time items, for fiscal 2013, which began March 1.
That compares with analysts' average estimate of $2.23 per share, according to Thomson Reuters I/B/E/S. Constellation earned $2.34 per share in fiscal 2012.
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