Constellation Brands, Inc. (STZ) has reported a 50.06 percent jump in profit for the quarter ended Nov. 30, 2016. The company has earned $405.90 million in the quarter, compared with $270.50 million for the same period last year. On an adjusted basis, net profit for the quarter was $403.30 million, when compared with $289.10 million in the last year period.

Revenue during the quarter grew 10.36 percent to $1,810.50 million from $1,640.50 million in the previous year period. Gross margin for the quarter expanded 452 basis points over the previous year period to 49.24 percent. Total expenses were 70.51 percent of quarterly revenues, down from 72.73 percent for the same period last year. This has led to an improvement of 223 basis points in operating margin to 29.49 percent.

Operating income for the quarter was $534 million, compared with $447.30 million in the previous year period.

However, the adjusted operating income for the quarter stood at $531.60 million compared to $475.80 million in the prior year period. At the same time, adjusted operating margin improved 36 basis points in the quarter to 29.36 percent from 29 percent in the last year period.

"It has been another dynamic quarter for our business and I am proud of our impressive financial results and recent accomplishments," said Rob Sands, president and chief executive officer, Constellation Brands. "We sold our Canadian wine business as part of our strategy to focus on premium, margin accretive, growth opportunities. We increased our functioning brewery capacity and innovation flexibility to support our fast-growing, high-end Mexican beer portfolio with the purchase of the Obregon brewery operation in Mexico. We strengthened our premium wine and spirits portfolio with the acquisitions of Charles Smith Wines and High West Distillery, and we repurchased a significant number of our shares. Our business has never been stronger and the future prospects across our beer, wine and spirits portfolio are compelling," said Sands.

For fiscal year 2017, Constellation Brands, Inc. expects diluted earnings per share to be in the range of $7.55 to $7.65 and expects diluted earnings per share to be in the range of $6.55 to $6.65 on adjusted basis.

The company has spent $1,149.10 million cash to meet investing activities during the nine month period as against cash outgo of $827.70 million in the last year period.

The company has spent $146.40 million cash to carry out financing activities during the nine month period as against cash inflow of $122.20 million in the last year period.

Cash and cash equivalents stood at $197.30 million as on Nov. 30, 2016, down 59.84 percent or $294 million from $491.30 million on Nov. 30, 2015.

Working capital drops significantly

Constellation Brands, Inc. has witnessed a decline in the working capital over the last year. It stood at $808.20 million as at Nov. 30, 2016, down 47.52 percent or $731.90 million from $1,540.10 million on Nov. 30, 2015. Current ratio was at 1.31 as on Nov. 30, 2016, down from 1.80 on Nov. 30, 2015.

Cash conversion cycle (CCC) has decreased to 88 days for the quarter from 184 days for the last year period. Days sales outstanding were almost stable at 40 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 105 days for the quarter compared with 184 days for the previous year period. At the same time, days payable outstanding went up to 57 days for the quarter from 40 for the same period last year.