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Constellation Brands posts a loss related to its investment in a cannabis company

Oct 3, 2019

Credit Constellation Brands

Victor-based Constellation Brands on Thursday reported a fiscal second-quarter loss of $525 million, after reporting a profit in the same period a year earlier.

Sales totaled just over $2.3 billion, up about 2% compared to last year.

The loss for Constellation is related to a $484 million loss involving its share of the investment the company has at Canopy Growth, the Canadian cannabis company.

CEO Bill Newlands told investors on a conference call Thursday that it was an excellent quarter for Constellation, driven by strong performance in the beer business. 

He says the company’s wine and spirits segment is being affected by activities related to the transition involved with Constellation’s earlier announcement that it would sell some brands to E.J. Gallo in a $1.7 billion deal.

Newlands says the company remains “bullish” on the move to focus on premium wine and spirits brands.

Constellation Brands' shares fell about 6% on Thursday, closing at $194.26.