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Will Constellation Brands continue its winning streak?

Published:  02 October, 2014

Constellation Brands is set to release its second quarter financials today, and with over 51.9% share-price growth over the past year, the question on everyone's mind is can it continue?

Analysts expectations are high for the company and estimate an adjusted earnings per share of USD$1.15, which is up from the 96 cents it delivered a year ago.

The beer, wine and spirits conglomerate has had a stellar 12 month performance. Constellation's first quarter results for fiscal year 2015 beat expectations and prompted the company to raise its financial expectations for the year.

The sustained growth the company has had quarter after quarter is primarily due to the consolidation of Crown Imports' commercial beer business which added an additional USD$868 million to incremental sales last year. Net sales were up 127% year on year, with Q1 2015 sales up 14%. Constellation had a joint venture with Anheuser-Busch InBev which sold its stake to Constellation in 2013. By buying up the Crown Imports business, Constellation acquired five of the top 15 imported beer brands and nearly half of the US beer imports by volume, according to the Wall Street Journal.

The company continues to see brand acquisition as a smaller part of its growth strategy. In August the company also announced its plans to acquire the Casa Noble Tequila brands. The deal was completed last month for an undisclosed amount.

Additionally Constellation is investing internally to help further position itself for growth. The company is currently investing in expanding its brewery in Nava, Mexcico which is expected to be completed in fiscal 2017.

Despite the optimism around the company, the stock price closed down 2.18% yesterday at USD$85.26 per share.  Perhaps the company's luck has run out?