Scotland soccer fans may have drunk Boston dry recently, but beer enthusiasts in general don’t seem to have regained their old buzz.

At least, that’s what Constellation Brands’ latest earnings would lead you to believe. The alcohol giant, which is the US importer of the popular Modelo and Corona beers, reported net sales of $2.43 billion in its fiscal first quarter, below the $2.52 billion from a year earlier (but higher than the $2.39 billion analysts had expected). However, its profit was $653.8 million, up from $516.1 million a year earlier.

Is a Comeback Brewing?

Constellation Brands’ results offer insight not only into the US beer industry at large but, more specifically, premium imported beer. Its Mexican beer portfolio accounts for most of its revenue. While Constellation experienced weaker demand last year from its Hispanic customers, those figures started to rebound in the fiscal fourth quarter, the company said in April.

But its business model means that sales aren’t all that matters. Aluminum prices recently hit a four-year high amid the war in the Middle East, causing headaches for manufacturers of cars, building materials and, of course, beer. Investors and analysts will likely be listening for any comments from company leaders during this morning’s post-earnings call on margins and whether the popularity of brands like Modelo will be able to offset pressures.

The alcohol industry could use some good news. It’s been a bad few years for bars as demand for alcohol took a dive (pun intended). Last year, a Gallup survey found that the percentage of adults who say they consume alcohol hit an all-time low of 54% amid health concerns, higher costs of living and a generational shift that has younger generations less interested in drinking.

But when it’s time to celebrate (or commiserate), people still make it to the bar. The World Cup proves that:

• As of the week ending June 20, which includes the first 21 US-hosted matches, on-premise beer sales are up 5.5% nationally as people gather, according to data the Beer Institute shared with The Daily Upside. (The dataset captures 88.1% of total US beer industry volume.)
• On-premise beer sales specifically in World Cup host markets have climbed 15.4% year-over-year.

Gas or Beer? Constellation CEO Nicholas Fink and CFO Garth Hankinson suggested that the sharp surge in gas prices could be keeping Americans from the beer aisle. “While we saw a resurgence of purchasing behavior amidst a more normalized start to the quarter, these financial pressures then drove a more discerning and value-conscious consumer mindset, most notably within lower-income households, contributing to a deceleration in retail food and beverage volume trends as the quarter progressed,” they said.

For a company whose name sounds like a painfully eco-conscious chocolate bar, AeroVironment had a pretty tasty Tuesday.

Shares in the dronemaker (not candymaker) closed up 19% as an earnings report that blew away Wall Street’s forecasts marshaled a fierce rally. It couldn’t have come at a better time.

Droning On

AeroVironment had a rough few innings leading into its quarterly report. ​​Earlier this year, the US Space Force canceled a $1.7 billion contract for the firm to supply high-tech antennas for military satellites, prompting a 17% plunge for the stock. (On Tuesday, securities law firm Bleichmar Fonti & Auld said a class action suit has been filed alleging AeroVironment was not forthcoming about the “significant likelihood” of competition for the contract; AeroVironment didn’t reply to a request for comment.)

Last month, AeroVironment disclosed an $89 million accounting error that impacted its reporting for the nine months leading to January 31, adding its earnings reports for that period “should no longer be relied upon.” This week came the relief: AeroVironment reported Monday that revenue in its latest quarter more than doubled year-over-year to $642 million, a supersonic leap beyond Wall Street’s $556 million projection. Net income more than tripled to $63.2 million, or $1.25 per share. While its full-year sales forecast of $2.2 billion was slightly below what analysts had hoped, many remain convinced that AeroVironment is a worthy investment. It makes offensive and defensive drones, which conflicts in Ukraine and Iran have highlighted as critical weapons of modern warfare, as well as energy weapons and space comms equipment through its acquisition of BlueHalo last year. Even though it lost the Space Force contract, a government-backed windfall could be in store:

• The White House requested $67 billion in supplemental military funds to cover costs for the conflict in Iran and is seeking an unprecedented $1.5 trillion defense budget for the 2027 fiscal year.
• The budget follows up on an executive order in which the White House ordered the US to expand military drone manufacturing.

Domino Drone Effect: On Tuesday, dronemakers Kratos and Red Cat rose 6.2% and 3.2%, respectively, while drone components supplier Unusual Machines rose 16%, no doubt because investors were encouraged by AeroVironment’s big sales number. As for AeroVironment, the average target price out of 18 analysts is $251, implying a 50% upside. Life is a box of chocolates if you’re in the drone-making business.

If any sequence of sounds captures the 1990s, it’s a cacophony of screeches and beeps that’ll make any dog tilt its head, followed by AOL’s iconic, “You’ve got mail.”

Just like bucket hats and baby tees, ’90s staple AOL is making a bit of a comeback. The once-dominant dial-up internet provider is headed back to the Nasdaq today under its parent company Bending Spoons, a Milan-based firm that bought AOL in January.

Bending Spoons hopes to raise more than $1.6 billion in its US IPO for a top-end valuation of nearly $19 billion. The debut will test investors’ appetite for software at a time when AI is the shiny, new toy.

Building the Buddy List

Bending Spoons has acquired more than 50 companies since its 2013 founding, scooping up familiar brands including video platform Vimeo, file-sharing service WeTransfer and ticket seller Eventbrite. Bending Spoons is behaving like “Property Brothers” for old-school internet properties, buying and revitalizing companies it thinks have untapped potential.

The company has a rinse-and-repeat approach:

• Bending Spoons is known for squeezing revenue from its acquired companies by cutting employee headcount, sending in its own engineers to overhaul platforms and raising prices. Earlier this year, Vimeo reportedly laid off most of its staff, including its entire video team, in the second round of layoffs since Bending Spoons took over. Previously, Bending Spoons gutted three-quarters of WeTransfer’s employees.
• The ruthless strategy has yielded small profits: After a loss of $137,000 last year on $2.6 billion in revenue, Bending Spoons netted $28 million in first-quarter earnings from sales of $601 million. It’s also bringing $4.4 billion in debt it’s used to finance deals into its IPO.

Big Spoon: Bending Spoons wants to keep buying companies, with CEO Luca Ferrari saying in 2024 that the firm had more than 5,000 companies in its consideration pipeline. Former employees and customers of the beloved and nostalgic companies Bending Spoons has bought have vented frustrations about the firm’s sweeping changes. The Italian company may find out how far it can bend spoons before they break.