Constellation Brands Inc. (NYSE:STZ) Q3 2018 Earnings Conference Call - Final Transcript

Jan 05, 2018 • 10:30 am ET

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Constellation Brands Inc. (NYSE:STZ) Q3 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to the Constellation Brands' Third Quarter 2018 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode. Following the prepared remarks, the call will be opened for your questions. Instructions will be given at that time. [Operator Instructions] I will now turn the call over to Patty Yahn-Urlaub, Senior Vice President of Investor Relations. Please go ahead.

Executive
Patty Yahn-Urlaub

Thank you, Laurie. Good morning, and welcome to our Third Quarter Fiscal 2018 Conference Call. I'm here this morning with Rob Sands, our President and Chief Executive Officer, and David Klein, our Chief Financial Officer. As a reminder, reconciliations between the most directly comparable GAAP measure and any non-GAAP financial measures discussed on this call are included in our news release or otherwise available on the company's website at www.cbrands.com. Please refer to the news release and Constellation's SEC filings for risk factors which may impact forward-looking statements we make on this call.

Before turning the call over to Rob, similar to prior quarters, I would like to ask that we limit everyone to one question per person, which will help us to end our call on schedule. Thanks in advance, and now, here's Rob.

Executive
Rob Sands

Thank you, Patty, and good morning and happy new year. I hope you enjoyed the holidays and had the opportunity to include some of our fine Constellation products in your celebrations with family and friends. As I reflect on 2017, I am reminded that it has been a dynamic time for our business.

We posted another year of exceptional stock price performance, with Constellation stock increasing almost 50% for the calendar year 2017 versus the S&P 500, which grew about 20% for the year. Over all stars, Constellation was one of the best performers among the S&P 500 consumer staple stocks.

I believe our excellent stock price performance continues to be driven by our strong financial results and the ongoing growth prospects for our business. The confidence in our future business prospects compels us to seek Board authorization for a new multiyear $3 billion share repurchase program subsequent to the recent repurchases of more than 200 million of our outstanding shares.

I'm also excited about our recent investment in Canopy Growth Corporation, the largest publicly-traded cannabis supplier in the world and a leader in the medical cannabis market in Canada. Founded in 2014, based in Ontario, Canopy Growth is one of the earliest commercial players in Canada's legal cannabis market and has a global presence via numerous joint ventures and partnerships. Canopy is traded on the Toronto Stock Exchange and currently has a market cap in the $5 billion range. This investment provides Constellation with a first-mover advantage for a potentially significant emerging consumer opportunity and aligns with our long-term strategy to identify, meet, and stay ahead of evolving consumer trends and market dynamics while maintaining focus on our core total beverage alcohol business.

Our plan is to jointly collaborate with Canopy in a number of areas. Initially, we will be learning the