Constellation Brands (NYSE:STZ) had a transformative year in 2020. In addition to the huge demand shifts that it endured along with peers like Boston Beer, volatility came from brand divestments, acquisitions, and huge bets on recreational marijuana.

These changes can make it difficult to separate the signal from the noise in Constellation Brands' operating results, so let's take a closer look at the metrics that will show how strong the business is when the company announces fiscal third-quarter earnings results on Jan. 7.

A man shops for beer in a supermarket.

Image source: Getty Images.

Market share

Most investors who follow the stock are expecting sales to land at $2.2 billion compared to $2 billion a year ago. But that revenue number will be impacted by Constellation's many acquisitions and divestment, and so it pays to follow consumption metrics in both its beer and wine segments.

Last quarter, the beer division notched a 5% boost in depletions, a measure of sales to consumers, which put Constellation Brands ahead of beverage giants like Anheuser-Busch InBev (NYSE: BUD) but well behind Boston Beer. Strong demand at supermarket chains for its premium imported brands like Corona and Modelo helped the company offset slumping sales at restaurants and bars, and that trend likely continued in the period that ran through late November.

In addition to beer market-share results, look for CEO Bill Newlands and his team to update investors on the launch of its hard seltzer brand. Management also said it expected to get the supply chain back to normal operating levels this quarter, which would show up in higher shipment volumes as compared to depletions

Cash and margins

Constellation Brands' wine segment might show another small drop following last quarter's 3% depletion decline. But look for the company to highlight progress in what executives call their "power brands" that include Kim Crawford and Meiomi wines. Success in this premium niche is crucial to lifting the overall segment's operating margin over time. Gains here might not be as dramatic as last quarter's 3-percentage-point boost, but Constellation Brands should still flex its pricing muscles in this report on its way toward achieving the 30% margin the company is targeting by fiscal 2023.

As an acquisition-focused business that's planning huge investments in production capacity, the company's cash flow is a crucial figure to watch. Its performance there has been strong in 2020, despite pressure from management's equity holdings in the marijuana giant Canopy Growth. Operating cash flow held steady over the past six months at $1.4 billion, and free cash flow jumped 10% in the fiscal second quarter. More success here will allow Constellation Brands to pay down debt while investing in areas like its Mexican brewery network.

Looking ahead

The fragile industry environment might convince management to decline to issue a detailed outlook for the rest of fiscal 2021. But investors should still learn whether the company is expecting beer sales to rise by around 8% in the context of steady profit margins. We'll see if executives still believe the wine segment will achieve modest growth while boosting profitability this year .

And Constellation Brands' cash performance this quarter will determine whether the company can still afford, as management predicted, to send about $5 billion of cash directly to shareholders this year through an even split between dividends and stock buybacks. That cash might help cushion investors' returns through a difficult start to fiscal 2022 for the global bar and restaurant business.