At the end of last week, Constellation Brands (NYSE:STZ) reported its financial results for the second quarter. The company performed well in most areas but was negatively impacted by its investment in Canopy Growth (TSX:WEED) (NYSE:CGC), sinking STZ stock. CGC stock is also falling this morning.
Here's what we know.
Mixed Q2 Report Sends STZ Stock Down
For the most part, Constellation Brands performed well during the second quarter. However, its struggles to sell its wine portfolio and its investment in Canopy Growth caused the New York-based company to see some troubles in the quarter. When the market became aware of this on October 3, 2019, STZ stock dropped around 6%.
The Constellation Brands Q2 report touched on several things, such as total sales increasing to $2.3 billion during the quarter. For perspective, this is is a 2% increase. Still, this section of the report got swept under the carpet, as the majority of the market focused on Constellation Brands reporting a loss of $484 million on its Canopy Growth investment. This focus on the loss of more than $400 million sent STZ stock down Thursday, as well as Monday morning.
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At the time of writing, STZ stock is trading at $191.97 on the New York Stock Exchange, which puts the stock down 0.91%.
The Bigger Picture
It's unclear whether STZ stock will continue to trade down Monday; or whether Constellation Brands will continue seeing negative impacts because of its investment in Canopy Growth. What we do know, however, is that Constellation Brands has yet to give up, remaining positive about its full-year earnings, and having things to look forward to, such as waiting to be approved to sell its wine portfolio to E&J Gallo Winery.
So, keep an eye on this company. There's bound to be a lot happening over the next few months. What do you think about the Constellation Brands Q2 earnings report? Was it a mistake to purchase a stake in Canopy Growth?
Featured image: PixaBay
