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Constellation Brands (NYSE:STZ) fell 8.37% on Thursday to its lowest level in ten months after profit guidance came in lower than anticipated. Higher costs for raw materials, packaging and logistics, and brewery expansions cut into FQ3 EPS as well as the full-year profit outlook.
Weighing in on the STZ numbers, Morgan Stanley noted that overall STZ depletions do appear to be slowing and the incremental news is that untracked channels slowed more than expected. Analyst Dara Mohsenian also said the Modelo depletion result was soft. "While STZ raised the low end of its FY22 beer net sales and operating income growth guidance, FY guidance implies further deterioration in F4Q," he warned.
Beer and spirits stocks reacted negatively to the STZ update. Within the alcoholic beverage sector - Molson Coors (TAP) fell 3.27%, Duckhorn Portfolios (NAPA) peeled off -2.80%, Brown-Forman (BF.A) declined 2.77%, Boston Beer (SAM) was down 2.11%, and Anheuser-Busch InBev (BUD) showed a 1.65% drop.
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