Stock Market News: Constellation Brands, Norwegian Cruise Line

Norwegian Cruise Line‘s (NYSE:NCLH) CEO believes it will be at full capacity by April 2022. Motley Fool analyst Alicia Alfiere analyzes that story, discusses an ongoing dilemma investors face with their portfolios, and shares a stock on her watch list.

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This video was recorded on Oct. 6, 2021.

Chris Hill: It’s Wednesday, October 6th. Welcome to Market Foolery. I’m Chris Hill. With me today, Alicia Alfiere. Thanks for being here.

Alicia Alfiere: So glad to be here, Chris.

Chris Hill: We’ve got travel. We’re going to talk about which stocks in your portfolio you should be adding to, but we’re going to start with the business of alcohol. It was a mixed second-quarter report for Constellation Brands (NYSE:STZ), the seller of beer, wine, and spirits, had profits that were solidly lower than expected. Revenue was higher and they raised revenue guidance for the full fiscal year. Let’s start here. What stood out to you in this report?

Alicia Alfiere: Yeah. Well, first, revenue net sales grew five percent year-over-year to total 2.4 billion. Pretty impressive here. Interestingly enough, this growth is being driven by their core beer brands, not seltzer or alternative beverage products like we’ve seen for other alcoholic brands. Let’s talk about their beer because I think there’s some interesting things in here. Second quarter sales grew here 14 percent year-over-year, and they have seen strong growth for their core imported beer brands. Their beer business outpaced the total beer category in the high-end segment. Modelo Especial and Corona Extra have been really driving a lot of the growth here, and the company is really excited about Modelo specifically and their growth potential. They’ve said that Modelo Especial was the number 1 brand in the higher-end beer category and the number 1 share gainer in the entire US beer category. They have a lot of growth here. But as you said, you know what? It was a complicated quarter. The company was really dealing with some supply chain issues. They’ve said that one of the biggest issues for their supply chain was the strong ongoing demand that they’ve been seeing for their products, but they don’t expect those short-term supply issues to impact their long-term goals and they’re expecting more normal levels of inventory by the end of the year. Those are some positives that we’ve been seeing here

Chris Hill: Yeah. I think this is a tricky one because Bill Newlands took over as CEO late spring of 2019. It was clear pretty quickly that he was going to be doing things differently than the previous CEO. I’m not trying to make excuses for him, but he was starting to execute on that plan and the pandemic hit. I…