Below is the transcript of the Constellation Brands, Inc. (NYSE:STZ) Q3 2015 Earnings Conference Call, held on Thursday, January 08, 2015, at 10:30 am EST.
Constellation Brands, Inc. (NYSE:STZ) is a leading international producer and marketer of beer, wine and spirits with operations in the U.S., Canada, Mexico, New Zealand and Italy. In 2013, Constellation was one of the best performing stocks in the S&P 500. Constellation is the number three beer company in the U.S. with high-end, iconic imported brands including Corona Extra, Corona Light, Modelo Especial, Negra Modelo and Pacifico.
Company Executives:
Rob Sands, President and Chief Executive Officer
Patty Yahn-urlaub, Vice President of Investor Relations
Bob Wright, Chief Financial Officer
Robert Ryder, Executive Vice President and Chief Financial Officer.
Analysts:
Nick Mouldy, RBC Capital Markets
Brian Blaney, Bank of America
Dara Mohsenian, Executive Director, US Beverage/Household Products Sectors at Morgan Stanley
Judy Hong, Managing Director at Goldman Sachs
Kim Brainy, Capital Research Group
Mark Forsberg, People’s Financials
Caroline Levy, Beverage and HPC Analyst at CLSA
Operator:
Ladies and Gentleman thank you for standing by, and Welcome to the Constellation Brands [NYSE: STZ] Third Quarter since whole year 2015, our news conference call. All lines have them please unmute to prevent any background noise. After the speaker’s remarks there will be a question and answer session. If you’d like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. If your question has an answer and you wish to remove yourself from the queue, press the pound key. We ask before that you’ve pick-up your hands that to allow optimal sound quality, thank you. I now turn the call over to Patty Yahn-urlaub Vice President of Investor Relations
Patty Yahn-urlaub, Vice President of Investor Relations:
Thank you Lorrie Good Morning everyone and welcome to constellation’s third quarter’s fiscal 2015 conference call. I’m here to this morning with Rob Sands, our President and Chief Executive Officer, and Bob Wrighter our Chief Financial Officer. This call complements our new series, which is then furnace to the STC. During this calling may discuss financial information on the gap comparable organic in constant currency basis. However discussions will generally focus on comparable financial result. Reconciliations between the most directly comparable gap measure and needs and other 9 gap financial measures are included in the new release, or otherwise available on the company’s website at www.cbrands.com.
Please also be aware that we may make forward looking statements during this call. All those statements will present our best as to estimates and expectations actual results could differ materially from our estimates and expectations. For detail less risk factor that may impact our company’s estimate. Please refer to the news releases and constellations at STC filing. And now I’d like to turn the call over to Rob.
Rob Sands President and Chief Executive Officer:
Thanks Patty and Good morning and Happy New Year to everyone hope everybody got the chance to enjoy some of our great products over the Holiday with their family and friends. Welcome to our discussion of Constellation’s third Quarter Fiscal 2015 Sales and earnings results. Before we get started with the review of the quarter, I believe it’s worth noting that we posted another year of exceptional Stock Price Performance, with Constellations stock increasing almost 40% per calendar year 2014. And this is the third consecutive year that Constellation was one of the best performing stocks in the SMP 500 consumer’s stable index. Our stock price has been on fire increasing almost 400% during the 3 year time horizon beginning in calendar 2012. This tremendous stock price appreciation is being driven primarily by our beer business which has incredible momentum and we believe strong potential for future growth, and we’re making smart investments now to ensure that we have the quality, capacity, control and flexibility to help us to meet demand for our iconic beer brands well into the future.
In addition to our on growing brewery expansion in Nava, Mexico, we recently begun implementing our Multi-faceted glass sourcing strategy which includes the acquisition of ABI’s as state of the art glass plant which is located adjacent to our Nava brewery. The formation of 50-50 joint ventures with Holland’s Illinois the world’s leading glass container producer to own, operate and expand the Nava glass plan and the execution of a glass supply agreement with Mexican glass manufacturer Vitro which will begin to wrap up glass supply in fiscal 2016. Overall we believe this comprehensive sourcing strategy provides an optimal solution for this essential component of our beer production process.
Our third quarter brewery results are evidence of the great momentum we are currently experiencing for the business as we achieve depletion growth of 8% with strong underlying sales growth. These results are some of the best in the industry. In fact constellation’s beer business generated the vast majority of total U.S industry volume growth in IRI channels during the third quarter. We are growing both volume and our dollar share in the industry at the time when overall beer growth is lack luster for the U.S beer market. Our entire Mexican portfolio including Corona Light, Pacifico, Negro Modella and Victoria are all delivering strong growth which is leading to record sales results brand by brand
