Investors have a few good reasons to look forward to Constellation Brands' (NYSE:STZ) upcoming earnings report. The company has been winning market share for years thanks to its premium imported beer franchises. Constellation's wine and spirits segment, meanwhile, should see faster growth now that management has sold off most of its weaker brands. Then there's the aggressive investment in the marijuana space, which could pay off as Canopy Growth (NYSE: CGC) moves toward profitability.

With those promising trends in mind, let's look at what shareholders can expect in Constellation Brands' fiscal second-quarter report on Thursday, Oct. 3.

Friends drinking beer at a bar.

Image source: Getty Images.

Beer and wine updates

CEO Bill Newlands in late June called Constellation's beer portfolio a "cornerstone of growth" in the broader industry, and it's not hard to see why executives are so bullish about their collection of imported brands like Corona, Modelo, and Pacifico. Depletion volume, a measure of sales trends, was up 7% to kick off fiscal 2020. Anheuser-Busch InBev (NYSE:BUD), in contrast, posted a slight volume decline in its latest quarter.

Still, the consumer staples giant's growth has slowed from the 9% rate the company managed through the full fiscal-year 2019, and so investors will be watching for signs of stabilization or a slight uptick in beer depletion volumes.

As for wine and spirits, that segment is likely to be held back by the weaker brands that Constellation hasn't yet sold off, though that $1.7 billion transaction is nearly complete. In the meantime, management will break out the performance of the remaining portfolio, which last quarter grew at 4% and delivered operating margin of around 26% of sales. Both of those metrics are below their long-term targets, but they each represent encouraging steps in the right direction.

Cash and capital spending

In the past two years, Constellation Brands has poured billions of dollars into upgrading its capacity and integrating more parts of the manufacturing process, like glass production, into the business. That capital spending has made the company more efficient, which is pushing cash flow higher. At the same time, cash production is rising thanks to the winding down of that spending boost.

All of this should add up to operating cash flow of at least $2 billion this year, much of which will find its way back to shareholders. CFO David Klein confirmed back in June that Constellation plans to return $4.5 billion to investors through stock repurchases and dividends over the next three fiscal years.

The updated outlook  

With half of the fiscal year behind it, management will be in position to clarify its outlook on Thursday. As it stands now, that forecast calls for the beer business to grow sales and profits between 7% and 9%, while the wine division sinks by as much as 25% due to brand divestments.  

In addition to a clearer forecast for these metrics, look for Constellation Brands to discuss the financial implications of its massive investment in Canopy Growth. These should include non-charges to reflect movements in the pot stock's share price. But more importantly, they'll include updates on how management plans to use the warrants that allow for increased investments if the marijuana market develops as quickly as it hopes it will.