Constellation Brands tops Wall St. estimates for latest quarter; company moves ahead with shareholder changes
Constellation Brands is reporting a strong quarter while it also moves ahead with changes in its corporate structure.
The locally-based beer, wine and spirits company is reporting fiscal 1st quarter profits of $389 million, with sales of nearly $2.4 billion, which is around a 17% increase in revenue.
Results for the quarter topped Wall Street estimates.
During a call with analysts, Constellation Brands CEO Bill Newlands said that even with inflation and other concerns about the economy, it hasn’t had a big impact on sales at this point.
“While consumers are reporting increasing concerns about the economy, these concerns have not yet translated into significant behavior change for beverage alcohol shoppers, particularly for our major brands,” said Newlands.
Constellation Brands is also moving ahead with some changes in the company’s corporate structure.
It will eliminate a class of stock, the Class B common stock, which will see the Sands family relinquish some of their voting power. But it’s expected they will still be Constellation’s largest shareholder even after this move.
Also, Rob Sands, who is now Executive Chairman of the board will retire from that role and become non-Executive Chairman. Richard Sands, who was Executive Vice Chairman, will continue on as a board member.
CEO Bill Newlands said this simplified structure will provide a solid foundation as Constellation Brands continues to pursue its growth initiatives. He also said it will result in cost savings for the company and align voting rights with the economic interests of all shareholders.
The reclassification of the stock will be subject to shareholder approval.