Constellation Brands Inc. (NYSE:STZ) Q4 2020 Earnings Conference Call - Final Transcript

Apr 03, 2020 • 10:30 am ET


Constellation Brands Inc. (NYSE:STZ) Q4 2020 Earnings Conference Call - Final Transcript


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Welcome to the Constellation Brands Q4, Full Year FY 20 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Patty Yahn-Urlaub, Senior Vice President of Investor Relations. Please go ahead.

Patty Yahn-Urlaub

Thanks Josh. Good morning and welcome to Constellation's year end fiscal 2020 conference call. And here this morning is Bill Newlands, our CEO; and Garth Hankinson, our CFO. 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 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 Bill, similar to what we've done in 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 time.

Thanks in advance and now here's Bill.

Bill Newlands

Thank you, Patty. Let me add my welcome as well. Let me quickly frame up the key themes you're going to hear from Garth and me today. First, we delivered strong performance in fiscal '20 led by our Beer business, which generated double-digit operating income for the year with accelerating IRI trends as Q4 progressed. And that momentum has continued in the early stages of fiscal '21. We have ample brewing capacity to continue fueling the growth of our Beer business in the medium-term and we're working with local authorities and government officials in Mexico to ensure we have ample long-term capacity as our business continues to grow and evolve.

Second, our high-end Power Brands, and successful new product launches fueled performance in fiscal '20 that drove accelerating depletion trends in Q4 for our Wine & Spirits business as our premiumization strategy continues to take hold. And third, our strong performance and financial discipline generated record cash flow, reduced our outstanding debt and build solid momentum heading into fiscal '21. We'll talk in more detail about each of these areas. But before we go any further, I'd like to take a minute to address current circumstances related to the COVID-19 outbreak. First and foremost, our thoughts and prayers go out to those affected by this terrible virus and to the first responders and healthcare professionals working to help those in need. We sincerely hope the increased efforts to more fully contain this virus gain strong traction soon.

With this in mind, we operate with a customer-focused mindset, a genuine concern for people and a desire to make a positive difference in our communities that is core to our DNA, even more important today as our industry and communities face substantial hardships. As such, Constellation along with a number of our brands has committed more than $2.5 million toward COVID-19 relief efforts that will directly benefit our business partners and communities now and through their recovery. Specifically, we are supporting the National Restaurant Association Educational Foundation