STZ Black Book presentation today
We are hosting a Black Book presentation today at 12:30 PM ET. Constellation Brands historically has outperformed the S&P 500 in Quad 4. On an absolute basis Quad 4 is the second-best quad for Constellation Brands' share price performance. We will outline our investment case for STZ being an outperformer over the short and long term. STZ is a top Best Idea Long.
Our Black Book will cover the following topics:
- A preview of Q1 results
- What to expect from the Sands' offer for their voting rights
- Rumors of a tie-up with Monster Energy and the most likely scenarios
- A review of recent off-premise and on-premise trends
- An update on the wine and spirits sectors
- What does hard seltzer 2.0 look like for Constellation Brands
- A Canadian cannabis market update for Canopy Growth
- A review of the company's competitive moat
- Where we see upside and downside in the financial model
Wine DTC Shipments grow (VWE, NAPA)
DTC wine shipments grew 8% YOY in May to $339M after a small decrease in April. Volumes fell 4% to 691,714 cases. The average price of a bottle increased 12% to $40.87. Shipment value was 20% above May 2019’s level. The wine DTC channel is at the higher end due to the cost of shipping. Americans spent more than $4B on DTC wine shipments in 2021. DTC shipments benefited from the shift to at-home wine consumption, but has still grown in 2022 while other pandemic habits like online grocery has fallen. Vintage Wine Estate’s wine clubs continue to be a growth driver.
Wine sales are steady (VWE, NAPA)
Sales of domestic table wine and sparkling wines in the off-premise channel decreased 5% in the four-week period ended May 21. Volumes decreased 7%, reflecting a modest price/mix. That represents a deceleration from the 3% decrease in April. In the past 52 weeks, wine sales decreased 6% while volumes decreased 10%. Overall wine sales grew 9% in the U.S. in May, flat with April’s 9% growth. Wine sales continue to grow in the e-commerce, winery tasting room, and on-premise channels while the off-premise channel has difficult comparisons with more at home consumption in 2021.
