Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Constellation Brands Inc., profitability ratios
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
- Gross Profit Margin
- The gross profit margin exhibited a generally upward trend over the six-year period, increasing from 48.14% in 2017 to 53.37% in 2022. A slight decline was observed in 2020 at 49.76%, but the margin recovered thereafter, reaching its highest level in 2022. This suggests an improvement in cost management or pricing power over time, despite some fluctuations.
- Operating Profit Margin
- The operating profit margin demonstrated a fluctuating downward trend overall. Starting at 32.73% in 2017, it declined to 26.43% by 2022. Notable decreases occurred in 2019 and 2020, with a recovery in 2021 to 32.4%, followed by another drop in 2022. This pattern may indicate variability in operating expenses or challenges in maintaining operational efficiency.
- Net Profit Margin
- The net profit margin showed considerable volatility throughout the period. It rose from 20.94% in 2017 to a peak of 42.33% in 2019, suggesting exceptional profitability that year. However, sharp declines followed, with negative margins recorded in 2020 (-0.14%) and 2022 (-0.46%), indicating periods of losses. The margin rebounded moderately to 23.19% in 2021, but the instability suggests challenges in sustaining net profitability.
- Return on Equity (ROE)
- ROE followed a similar pattern to net profit margin, increasing from 22.28% in 2017 to a high of 28.82% in 2018, before experiencing a marked drop to -0.10% in 2020. A partial recovery was noted in 2021 (14.69%), followed by a decline back to negative territory (-0.34%) in 2022. This trend reflects fluctuations in the company's ability to generate shareholder returns, impacted by periods of negative net income.
- Return on Assets (ROA)
- ROA increased from 8.25% in 2017 to a peak of 11.75% in 2019, indicating improving asset utilization. However, it turned negative in 2020 (-0.04%), recovered somewhat in 2021 (7.37%), and declined again in 2022 (-0.16%). This variability highlights inconsistent profitability relative to asset base, aligning with the broader profitability challenges observed.
Return on Sales
Return on Investment
Gross Profit Margin
Constellation Brands Inc., gross profit margin calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Gross profit | 4,707,300) | 4,466,000) | 4,151,900) | 4,080,300) | 3,817,200) | 3,529,400) | |
| Net sales | 8,820,700) | 8,614,900) | 8,343,500) | 8,116,000) | 7,585,000) | 7,331,500) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 53.37% | 51.84% | 49.76% | 50.27% | 50.33% | 48.14% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Coca-Cola Co. | 58.14% | 60.27% | 59.31% | — | — | — | |
| Mondelēz International Inc. | 35.92% | 39.19% | 39.30% | — | — | — | |
| PepsiCo Inc. | 53.03% | 53.35% | 54.82% | — | — | — | |
| Philip Morris International Inc. | 64.10% | 68.06% | 66.65% | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × 4,707,300 ÷ 8,820,700 = 53.37%
2 Click competitor name to see calculations.
- Gross Profit
- The gross profit demonstrated a consistent upward trend over the six-year period, increasing from $3,529,400 thousand in 2017 to $4,707,300 thousand in 2022. This reflects steady growth in the company's ability to generate profit after accounting for the cost of goods sold.
- Net Sales
- Net sales also increased each year, rising from $7,331,500 thousand in 2017 to $8,820,700 thousand in 2022. The growth in net sales was moderate but steady, indicating positive sales performance and expansion in revenue over time.
- Gross Profit Margin
- The gross profit margin showed a generally increasing pattern except for a slight dip in 2020. It started at 48.14% in 2017, rose to 50.33% in 2018, then remained relatively stable at around 50% until 2020. From 2021 onward, the margin improved significantly, reaching 53.37% in 2022. This suggests enhanced efficiency in managing production costs relative to sales or an improvement in pricing strategy.
Operating Profit Margin
Constellation Brands Inc., operating profit margin calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Operating income | 2,331,700) | 2,791,100) | 2,154,500) | 2,412,200) | 2,284,500) | 2,399,400) | |
| Net sales | 8,820,700) | 8,614,900) | 8,343,500) | 8,116,000) | 7,585,000) | 7,331,500) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 26.43% | 32.40% | 25.82% | 29.72% | 30.12% | 32.73% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Coca-Cola Co. | 25.37% | 26.67% | 27.25% | — | — | — | |
| Mondelēz International Inc. | 11.22% | 16.20% | 14.50% | — | — | — | |
| PepsiCo Inc. | 13.33% | 14.04% | 14.32% | — | — | — | |
| Philip Morris International Inc. | 38.56% | 41.32% | 40.66% | — | — | — | |
| Operating Profit Margin, Sector | |||||||
| Food, Beverage & Tobacco | 19.83% | 21.93% | 21.81% | — | — | — | |
| Operating Profit Margin, Industry | |||||||
| Consumer Staples | 8.44% | 8.48% | 8.17% | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
Operating profit margin = 100 × Operating income ÷ Net sales
= 100 × 2,331,700 ÷ 8,820,700 = 26.43%
2 Click competitor name to see calculations.
- Net Sales
- Net sales exhibited a consistent upward trend over the observed period. From February 28, 2017 to February 28, 2022, net sales increased from $7,331,500 thousand to $8,820,700 thousand. This reflects steady growth in revenue, indicating the company's ability to expand its market presence or increase sales volume over time.
- Operating Income
- Operating income showed some fluctuations during the period. It started at $2,399,400 thousand in 2017, decreased to a low of $2,154,500 thousand in 2020, and then recovered to $2,791,100 thousand in 2021 before declining again to $2,331,700 thousand in 2022. These variations suggest challenges in maintaining stable profitability despite the growth in net sales.
- Operating Profit Margin
- The operating profit margin experienced variability throughout the years. It began at 32.73% in 2017, dropped to its lowest point of 25.82% in 2020, and rose again to 32.4% in 2021 before falling back to 26.43% in 2022. This pattern indicates fluctuating operational efficiency and cost management relative to sales, with a notable dip around 2020, possibly reflecting increased expenses or pricing pressures.
- Overall Trends
- Although net sales consistently increased, operating income and operating margin did not follow a parallel upward trend. The divergence between sales growth and profitability metrics suggests that the company encountered periodic challenges in cost control or operational efficiencies. The significant dip in operating income and margin in 2020, followed by partial recovery and subsequent decline in 2022, may warrant closer examination of expense trends, pricing strategies, or market conditions during these years.
Net Profit Margin
Constellation Brands Inc., net profit margin calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income (loss) attributable to CBI | (40,400) | 1,998,000) | (11,800) | 3,435,900) | 2,318,900) | 1,535,100) | |
| Net sales | 8,820,700) | 8,614,900) | 8,343,500) | 8,116,000) | 7,585,000) | 7,331,500) | |
| Profitability Ratio | |||||||
| Net profit margin1 | -0.46% | 23.19% | -0.14% | 42.33% | 30.57% | 20.94% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Coca-Cola Co. | 22.19% | 25.28% | 23.47% | — | — | — | |
| Mondelēz International Inc. | 8.63% | 14.97% | 13.37% | — | — | — | |
| PepsiCo Inc. | 10.31% | 9.59% | 10.12% | — | — | — | |
| Philip Morris International Inc. | 28.49% | 29.00% | 28.08% | — | — | — | |
| Net Profit Margin, Sector | |||||||
| Food, Beverage & Tobacco | 15.68% | 17.28% | 16.69% | — | — | — | |
| Net Profit Margin, Industry | |||||||
| Consumer Staples | 6.11% | 6.21% | 6.22% | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
Net profit margin = 100 × Net income (loss) attributable to CBI ÷ Net sales
= 100 × -40,400 ÷ 8,820,700 = -0.46%
2 Click competitor name to see calculations.
- Net Income (Loss) Attributable to CBI
- The net income shows a general upward trend from 2017 to 2019, increasing from approximately $1.5 billion in 2017 to about $3.4 billion in 2019. However, in 2020, there is a significant decline where the net income turns negative, recording a loss of $11.8 million. This negative trend partially recovers in 2021 with net income rising to nearly $2 billion, but then declines again to a loss of $40.4 million in 2022. The fluctuations indicate volatile profitability during the later years with notable losses in 2020 and 2022.
- Net Sales
- Net sales exhibit a consistent growth pattern over the six-year period. Starting at approximately $7.3 billion in 2017, sales increase steadily each year, reaching about $8.8 billion in 2022. This continuous rise in revenue suggests sustained demand or expansion in sales activities, despite the fluctuations seen in net income.
- Net Profit Margin
- The net profit margin follows a pattern similar to net income. It rises significantly from 20.94% in 2017 to a peak of 42.33% in 2019, indicating improved profitability efficiency during that period. In 2020, the margin falls sharply to a slightly negative value (-0.14%), reflecting the net loss for that year. It recovers to 23.19% in 2021 but then declines again to a negative margin of -0.46% in 2022. This volatility underscores challenges in maintaining profitability despite growing sales.
Return on Equity (ROE)
Constellation Brands Inc., ROE calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income (loss) attributable to CBI | (40,400) | 1,998,000) | (11,800) | 3,435,900) | 2,318,900) | 1,535,100) | |
| Total CBI stockholders’ equity | 11,731,900) | 13,598,900) | 12,131,800) | 12,551,000) | 8,046,100) | 6,891,200) | |
| Profitability Ratio | |||||||
| ROE1 | -0.34% | 14.69% | -0.10% | 27.38% | 28.82% | 22.28% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Coca-Cola Co. | 39.59% | 42.48% | 40.14% | — | — | — | |
| Mondelēz International Inc. | 10.11% | 15.21% | 12.89% | — | — | — | |
| PepsiCo Inc. | 51.96% | 47.48% | 52.92% | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | — | |
| ROE, Sector | |||||||
| Food, Beverage & Tobacco | 51.06% | 53.84% | 55.44% | — | — | — | |
| ROE, Industry | |||||||
| Consumer Staples | 32.10% | 31.40% | 30.98% | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
ROE = 100 × Net income (loss) attributable to CBI ÷ Total CBI stockholders’ equity
= 100 × -40,400 ÷ 11,731,900 = -0.34%
2 Click competitor name to see calculations.
- Net income (loss) attributable to CBI
- Net income experienced a significant upward trend from 2017 to 2019, rising from 1,535,100 thousand US dollars to a peak of 3,435,900 thousand US dollars in 2019. However, in 2020, the company recorded a loss of 11,800 thousand US dollars, marking a sharp reversal in profitability. This was followed by a recovery in 2021 with a net income of 1,998,000 thousand US dollars, before another loss of 40,400 thousand US dollars occurred in 2022.
- Total CBI stockholders’ equity
- The stockholders' equity showed consistent growth from 2017 through 2021, increasing from 6,891,200 thousand US dollars to 13,598,900 thousand US dollars. In 2022, however, stockholders’ equity declined to 11,731,900 thousand US dollars, interrupting the upward trajectory.
- Return on Equity (ROE)
- Return on equity followed the pattern of net income with strong performance between 2017 and 2019, achieving 22.28%, 28.82%, and 27.38%, respectively. ROE turned slightly negative at -0.1% in 2020, reflecting the net loss for that year. Although it improved to 14.69% in 2021, it declined again to -0.34% in 2022, indicating a challenging profitability environment in recent years.
Return on Assets (ROA)
Constellation Brands Inc., ROA calculation, comparison to benchmarks
| Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | Feb 28, 2019 | Feb 28, 2018 | Feb 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income (loss) attributable to CBI | (40,400) | 1,998,000) | (11,800) | 3,435,900) | 2,318,900) | 1,535,100) | |
| Total assets | 25,855,800) | 27,104,800) | 27,323,200) | 29,231,500) | 20,538,700) | 18,602,400) | |
| Profitability Ratio | |||||||
| ROA1 | -0.16% | 7.37% | -0.04% | 11.75% | 11.29% | 8.25% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Coca-Cola Co. | 10.29% | 10.36% | 8.87% | — | — | — | |
| Mondelēz International Inc. | 3.82% | 6.41% | 5.24% | — | — | — | |
| PepsiCo Inc. | 9.67% | 8.25% | 7.66% | — | — | — | |
| Philip Morris International Inc. | 14.67% | 22.06% | 17.98% | — | — | — | |
| ROA, Sector | |||||||
| Food, Beverage & Tobacco | 9.51% | 10.44% | 9.04% | — | — | — | |
| ROA, Industry | |||||||
| Consumer Staples | 8.95% | 8.75% | 8.24% | — | — | — | |
Based on: 10-K (reporting date: 2022-02-28), 10-K (reporting date: 2021-02-28), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-02-28), 10-K (reporting date: 2018-02-28), 10-K (reporting date: 2017-02-28).
1 2022 Calculation
ROA = 100 × Net income (loss) attributable to CBI ÷ Total assets
= 100 × -40,400 ÷ 25,855,800 = -0.16%
2 Click competitor name to see calculations.
- Net income (loss) attributable to CBI
- The net income exhibited a generally volatile pattern over the six-year period. Starting at 1,535,100 thousand USD in 2017, it increased significantly in the following two years, peaking at 3,435,900 thousand USD in 2019. However, in 2020, the company experienced a sharp reversal, recording a net loss of 11,800 thousand USD. In 2021, the net income rebounded to 1,998,000 thousand USD, but again turned negative in 2022 with a loss of 40,400 thousand USD. This suggests periods of profitability interrupted by notable losses, indicating potential operational or market challenges during the losses.
- Total assets
- Total assets increased steadily from 18,602,400 thousand USD in 2017 to a peak of 29,231,500 thousand USD in 2019. After this peak, there was a gradual decline over the next three years, reaching 25,855,800 thousand USD in 2022. The asset growth up to 2019 implies expansion or acquisition efforts, while the subsequent decreases may reflect asset disposals, impairments, or a strategic downsizing.
- Return on Assets (ROA)
- ROA mirrored the net income trend, starting at 8.25% in 2017 and increasing to a high of 11.75% in 2019, indicating improving operational efficiency and profitability relative to asset base. The metric drastically fell to -0.04% in 2020, coinciding with the reported loss that year. There was a partial recovery to 7.37% in 2021 before declining again to -0.16% in 2022. This pattern aligns with the net income fluctuations and suggests challenges in asset utilization and profitability during the years with losses.