Constellation Brands up on upbeat quarterly results
STZ•Constellation Brands beat second-quarter profit and sales estimates, as demand for Modelo Especial and Victoria helped offset challenges in the alcohol industry. The company will pay $75 million at closing for SpikedAde, with up to $278 million more tied to performance and capital-allocation priorities.
1. Results and outlook
Constellation Brands shares rose as much as 3.96% after the company beat second-quarter profit and sales estimates. It said on its earnings call that if positive September trends continue, it expects to land at the high end of its outlook range.
2. SpikedAde acquisition
The company will pay $75 million at closing for SpikedAde, a vodka-based ready-to-drink brand, plus up to $278 million over five years tied to the brand's performance and capital-allocation priorities. J.P. Morgan called the acquisition potentially interesting while noting the brand and category are nascent; BNP Paribas analyst Kevin Grundy said it gives new CEO Nick Fink an opportunity to demonstrate scaling of growth areas.
