Friday, Jun 29th 2018

Beer Outperformance Negated by Marketing Spend

Update

Constellation reported mixed Q1 results with strong sales but slightly weaker than expected profits. Importantly, the company showed strong execution and market share gains for both the Corona and Modelo brands, both of which were Top 5 market share gainers in the beer category in the period.

The company's earnings missed expectations due to elevated marketing investments the company made in its Corona Premier and Familiar brands.

These beer brands are seeing outstanding distribution trends and the company wants to drive increasing velocity of these products on store shelves. However, in the near term these marketing investments created some headwinds to STZ's profits.

Per management: "The Mexican beer business is performing incredibly strongly and we see no issues there."

We view these brand investments as wise and in-line with our thesis. However, short-term focused investors viewed this as slightly disappointing, hence the stock down 4% today.

The fundamentals of STZ's distribution moat, secular growth trends in beer, and strong management team are not impacted by short-term results.

As of this writing, STZ was a portfolio holding of Titan. This security may cease to be a portfolio holding at some point in the future.
Back to Research ↗

Learn with titan

Investment articles and resources

Become the smartest investor you've ever been through straightforward, easy-to-read investment articles.

How to Start Saving for a House in Your 20s


What Happens to Your 401(k) If You Get a Divorce?


How to Start Retirement Planning in Your 20s


How to Build Wealth in Your 30s

Let's Get Started

Ready to become a client?

Create an account with us in two minutes.

Or scan to get the app

We're building the best investment platform, ever

Titan Global Capital Management USA, Inc ("Titan") is an investment adviser registered with the Securities and Exchange Commission (“SEC”). By using this website, you accept our Terms of Use and Privacy Policy. Titan’s investment advisory services are available only to residents of the United States in jurisdictions where Titan is registered. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections are hypothetical in nature and may not reflect actual future performance. Account holdings are for illustrative purposes only and are not investment recommendations. The content on this website is for informational purposes only and does not constitute a comprehensive description of Titan’s investment advisory services.

Refer to Titan's Program Brochure for more information. Certain investments are not suitable for all investors. Before investing, consider your investment objectives and Titan’s fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Brokerage services are provided to Titan Clients by Titan Global Technologies LLC and Apex Clearing Corporation, both registered broker-dealers and members FINRA/SIPC. For more information, see our disclosures. Contact: 508 LaGuardia Place NY, NY 10012. Information provided by Titan Support is for informational and general educational purposes only and is not investment or financial advice. Check the background of these firms on FINRA's BrokerCheck.

© Copyright 2022 Titan Global Capital Management, Inc. All Rights Reserved.