Shares of Constellation Brands (STZ) slipped nearly 6% on Thursday after the company reported weaker-than-expected third-quarter sales following the divestiture its U.K. and Australian wine businesses.
The premium wine company said it earned $101 million, or 52 cents a share, during the quarter, which is down 24% from last year. Excluding special items, the company earned 50 cents, just below average analyst estimates of 52 cents, according to a Thomson Reuters poll.
Revenue for the three-month period was $701 million, down 27% year-over-year and missing the Street’s view of $720.4 million.
Constellation, which makes wines under the Robert Mondavi Brands and liquors such as Svedka Vodka, attributed the decline to the divestiture of the Australian and U.K. wine business and consolidation of U.S. distributors that led to an overlap of inventory during the quarter.
Despite the weaker results, the company reaffirmed its fiscal earnings guidance and lifted its cash flow guidance by $100 million to a range of $700 million to $750 million, a reflection of cost saving initiatives and new products.
“Our third quarter results were generally consistent with our expectations for the business and reflect continuing progress,” Constellation CEO Rob Sands said in a statement.
The Victor, N.Y.-based company sees earnings in the range of $2 to $2.10 a share, which is in line with average estimates of $2.06.