Good morning, and welcome to the Constellation Brands first quarter fiscal year 2023 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Patty Yahn-Urlaub, Senior Vice President of Investor Relations for opening remarks. Please go ahead, Patty. Thanks, Kevin. Good morning and welcome to Constellation's Q1 fiscal 2023 conference call. I'm here this morning with Bill Newlands, our CEO, and Garth Hankinson, our CFO. As a reminder, reconciliations between the most directly comparable GAAP measure and any non-GAAP financial measures discussed on this call are included in our news release or otherwise available on the company's website at www.cbrands.com. Please refer to the news release and Constellation's SEC filings for risk factors which may impact forward-looking statements we make on this call. Before turning the call over to Bill, similar to prior quarters, I would like to ask that we limit everyone to one question per person, which will help us to end our call on time. Thanks in advance, and now here's Bill. Thank you, Patty, and good morning, everyone. Before we get started today, I wanted to take a minute to recognize Patty, who after 15 years with Constellation, has elected to retire next month. We appreciate Patty's commitment in helping shepherd our investor relations function since joining the company in 2007. On behalf of all of our team here at Constellation, we thank Patty for her many contributions to our success over the years, including managing our relationships with a number of folks on this call. We wish her the very best in retirement. Effective July 1, leadership of our IR function will transition to Joe Suarez, who joined Constellation last November as Vice President of Investor Relations. Joe previously served as Managing Director at Teneo, a global CEO advisory firm. Prior to his time there, Joe also served in a range of commercial, governance, finance, and investor relations roles for a couple of major players in the global resources sector. We look forward to the continued success of our investor relations function under Joe's leadership. With that, let's move on to a discussion of our first quarter results. We're off to a strong start in our new fiscal year, thanks to the solid fundamentals of our business, the disciplined execution of our strategy, and the relentless commitment of our Constellation Brands team, as well as that of our distributors and retail partners. Our performance in Q1 fiscal 2023 continued to build momentum in three key areas tied to our long-term goals. First, our beer business once again delivered industry-leading share gains with Modelo Especial and Corona Extra taking the number one and number four spots among share gaining brands across tracked channels. The business achieved an important milestone, having reached more than 5 full points in shares gained over the last five years. Coming back to Q1, our beer business delivered net sales growth of 21% and added nearly 15 million cases in incremental shipment volume. As anticipated, these significant increases were partly driven by the lapping of supply challenges as a result of severe weather impacts in Q1 fiscal 2022. For clarity, shipments and depletions in our current quarter were roughly equal on an absolute basis. Importantly, our shipments mainly were underpinned by continued strong demand for our authentic Mexican beers, our consistent and balanced approach to pricing, and the effective ramp-up of new brewing capacity from our organic growth investments. Second, our wine and spirits business outperformed the U.S. wine and spirits category in tracked channels where we gained share supported by strong performance of our higher-end brands. Our wine and spirits business grew net sales by 2% and saw overall U.S. depletions increase by over 1%, with the premium wine and fine wine and craft spirits portions of our portfolio achieving 8% and 16% depletion growth, respectively, with brands like Meiomi, The Prisoner, High West, and Casa Noble delivering double-digit depletion growth rates. Third, our sustained and strong operating performance and cash flow generation enabled us to continue to deliver against our established capital allocation priorities. Our balance sheet remains strong. We continue to invest behind the momentum of our beer business with a focus on growth and flexibility, and we exceeded our planned $500 million accelerated share repurchase activity with an additional $800 million in buybacks. In fact, we have now fulfilled the share buyback portion of the $5 billion goal in cash returns to shareholders that we promised. Now let's discuss in more detail our beer business performance. We maintained our number one position as the number one supplier in high-end beer in the U.S. and achieved depletion growth of almost 9% in the quarter, consistent with our expectations and our growth profile target. As for Memorial Day, which celebrations took place within the quarter, we were the number one share gainer for that holiday, capturing 1.5 share points of total beer and 2.3 points of high-end beer in the U.S. tracked channels. In the on-premise, our beer business achieved a 30% depletion growth rate across the portfolio and delivered double-digit growth for the Corona and Modelo brand families, as well as Pacifico. As mentioned, Modelo Especial remained the number one share gainer in tracked channels, adding over 1.2 points in incremental share, nearly double the incremental share of the second largest gainer. Overall, Modelo Especial delivered the total depletion growth above 15% for the quarter. Our Modelo Chelada brand family grew in line with our medium-term double-digit CAGR expectations, achieving over 39% depletion growth in the quarter. The national release of our new Limón y Sal 12 oz 12-pack helped this popular flavor of our Chelada brand deliver the 15th largest share gain across the entire U.S. beer category in tracked channels. Although it is still very early days for our other Modelo innovations, we are encouraged by the initial data we're seeing in test markets, particularly for Oro. We continue to be encouraged by the sustained healthy growth of Corona Extra. This brand delivered over 4% depletion growth for the quarter, and as mentioned earlier, was the number four share gainer in the U.S. beer market in tracked channels. We continue to expect modest growth for Corona Extra in fiscal 2023. Pacifico delivered depletion growth of more than 20% for the quarter. We continue to expect Pacifico to grow in line with our medium-term 10%-15% total annual volume growth forecast in fiscal 2023. All in, our beer business delivered strong net sales growth for the quarter, and this in turn supported a double-digit increase in operating income. Looking ahead, we're confident that our beer business remains well-positioned to deliver against our net sales and operating income growth targets for fiscal 2023, despite the ongoing inflationary pressures affecting consumers. We'll continue to take appropriate pricing and cost management actions to ensure we maintain both the growth algorithm of our brands and our industry-leading margins. We'll also continue to support our consumer-led innovation and brand building efforts throughout the remainder of the year, which will include the launch of our Fresca Mixed Vodka Spritz and Tequila Paloma flavors in early September. We continue to make progress with our brewing capacity additions, including our new brewery to be built in the state of Veracruz. During the quarter, we were pleased to have formally announced the location of our new brewery with the President of Mexico, Andrés Manuel López Obrador, as well as with both the governor of the state of Veracruz and the mayor of the city of Veracruz, along with federal, state, and municipal authorities. The new brewery will be located in the Port of Veracruz, one of the most prominent seaports in the region, and will have ample access to water and necessary resources and a highly capable workforce, as President López Obrador himself has stated. We look forward to continuing the remarkable journey of our strong performance of our beer business with a focus on both growth and flexibility as we deploy the investments needed to meet steadily rising demand for our products. Now let's move on to wine and spirits. Our strategy to increasingly focus on higher-end brands aligned with ongoing consumer-led premiumization trends continues to enhance the commercial performance of our wine and spirits business. The premium wine, fine wine, and craft spirits portions of our portfolio all significantly outperformed their corresponding categories in tracked channels. Meiomi, The Prisoner, and Kim Crawford remained the driving forces behind our premium and fine wine growth, with continued share gains in tracked channels and strong increases in depletions. In craft spirits, our High West and Casa Noble brands delivered dollar sales growth ahead of the competition. We maintained share in mainstream wine with Woodbridge primarily driving that performance. Our innovation efforts also continued to produce excellent results, with Meiomi Red Blend becoming the second largest new product growth contributor in the wine category in just over a quarter since its launch. We are seeing incremental growth from the expansion of our wine and spirits brands into international markets, with particularly significant gains of more than 60% in international shipment volumes for our fine wine and craft spirits products. As with our beer business, we continue to closely monitor the state of consumer and remain disciplined in our approach to ensure we balance both pricing and growth across our wine and spirits portfolio as economic conditions further evolve. That said, while consumers are reporting increasing concerns about the economy, these concerns have not yet translated into significant behavior change for beverage alcohol shoppers, particularly for our major brands. Total beverage alcohol servings per capita in the U.S. have remained and are expected to remain stable, with growth of 1%-2% based on population growth expectations. Against that backdrop, we are encouraged by the continued strength of our high-end beer and wine and spirits brands in the first quarter of this fiscal year, and remain confident in our ability to drive additional growth for both businesses over the medium term. To that end, we are accelerating our investments in digital capabilities to further support future growth. These investments will be focused on securing the talent and enhancing the technologies needed to further optimize our marketing efforts and reinforce our leading position in three-tier e-commerce and DTC sales, as well as unlock value from enhancements to our procurement, supply chain management, plant operations, and back-office activities. Online beverage alcohol sales remain over 4 point times the pre-COVID rates, and we are seeing great traction with our DTC and three-tier e-commerce efforts, having outperformed the competition by 3.5 points in these channels over the first quarter. We are now planning additional investments as part of these efforts this fiscal year and expect the total impact of this digital business acceleration program to ultimately result in incremental earnings to be realized over the coming years, driven by more effective marketing as well as more efficient supply chain procurement, data and analytics, and operations platforms. Garth will provide additional details in just a few minutes. Beyond the growth we continue to expect from our businesses, which will be further supported by our digital business acceleration program, we also continue to believe that our ownership position in Canopy represents a compelling opportunity in a developing industry with significant long-term growth potential. Within that context, we think Canopy's focus on premiumizing its cannabis branded portfolio to improve performance in Canada is appropriate, and we are also supportive of its efforts in the U.S. to strengthen the distribution of its emerging CPG brands and build a competitive THC ecosystem as Canopy continues to gain traction. Canopy's agreements with Acreage, TerrAscend, Wana, and Jetty position it to quickly scale operations across the U.S. upon federal legalization. We continue to support Canopy through our strategic relationship, sharing our experience and capabilities to support the continued advancement of their U.S. strategy, specifically in the areas of commercial sales, marketing, and operations. As announced yesterday, part of our holding in Canopy's convertible debt will be transitioned into equity, which will reduce Canopy's debt while maintaining our share of equity ownership without putting additional capital at risk. On a separate note earlier today, we also announced that our board of directors has approved a proposal to eliminate our Class B common stock. After an extensive review and analysis by the special committee, and with the special committee's recommendation, our board agreed that it is in the best interest of the company and all Constellation shareholders to eliminate the Class B common stock. Under the proposal, owners of our Class B common stock, which are primarily the Sands family, would convert those shares into Class A common stock and receive $64.64 per share in cash, which equates to a total amount of $1.5 billion. The transaction requires shareholder approval, including approval of a majority of the issued and outstanding shares of Class A common stock not held by the Sands family or their affiliates, executive officers of the company, or directors that also hold Class B common stock. Once shareholder approval is received, we expect that the proposal would deliver a number of corporate governance and other benefits, including the elimination of the higher vote Class B common stock, including the associated voting control of the Sands family and a reduction in the concentration of voting power. A simplification of the company's equity capital structure to better align the voting rights and interests of all shareholders. A broader appeal of our shares to a larger base of investors who prefer single voting class common stock structures. Operating cost savings associated with executive salary and certain benefits, as well as administrative savings from maintaining the Class B common stock. We expect the executive salary and benefits cost savings will be about $15 million-$20 million per year. Using the $17.5 million midpoint of that cost savings range and our current trading multiple of approximately 21x PE, that equates to roughly $300 million of value on a tax-affected basis. Other corporate governance benefits include a rotation of the lead independent director position on the board at the next available normal cycle opportunity. Finally, a shift to majority voting in uncontested elections from the current plurality standard that are for our board of directors and the adoption of a board anti-pledging policy. We will be seeking the approval of shareholders at a special meeting, and a proxy statement including all details of the proposal will be available ahead of that special meeting. In the meantime, the announcement we made this morning related to the proposal can be found on our company website, cbrands.com. At this point, we will be unable to comment further or provide additional information on the proposal during today's call beyond what is available in that announcement. In closing, I once again want to recap the three highlights I shared earlier on our performance in the first quarter of fiscal 2023. First, our beer business continued to achieve industry-leading share gains driven by our high-performing Modelo Especial, Modelo Chelada, Corona Extra, and Pacifico brands, delivering overall strong financial results with double-digit growth for both net sales and operating income. Second, our wine and spirits business outperformed the U.S. wine and spirits category in tracked channels, particularly through the strong performance of our higher-end brands, and also grew net sales in the quarter. Third, we continued to deliver against our established capital allocation priorities, including through the $1.3 billion return to shareholders in share repurchases through June and dividends for the first quarter of this year. We are now at over 90% of our $5 billion promised goal. We were very encouraged by the continued strength of our business in the first quarter of this fiscal year and remain confident in our ability to drive sustained growth over the medium term. With that, I'd now like to turn it over to Garth, who will give you more detail of our financial results in the quarter. Garth? Thank you, Bill, and good morning, everyone. Fiscal 2023 is off to a great start. We're executing against our business strategy, and we're on track to achieve our targeted financial performance goals for the year. Our beer business achieved double-digit net sales and operating income growth, and our wine and spirits business is progressing as marketplace momentum accelerates for the portfolio. In addition, our strong cash flow results enabled us to accelerate and complete our share buyback goal as we repurchased 5.3 million shares for $1.3 billion through the first four months of our fiscal year. As a reminder, one of our key capital allocation priorities has been to return $5 billion to shareholders through combination of dividends and share repurchases by the end of fiscal 2023. To date, we've completed the share repurchase portion of this commitment well in advance of our year-end target. As such, we are now forecasting weighted average diluted shares outstanding of approximately 186.5 million for fiscal 2023, which includes share repurchases through June only. As is typical, since we do not know the timing and cadence of future share repurchase activity, any additional share repurchases have been excluded from our guidance assumptions. Now let's review Q1 fiscal 2023 performance in more detail, while we're generally focused on comparable basis financial results. Starting with beer. Net sales increased 21%, primarily driven by shipment volume growth of over 17% from ongoing robust demand for our core portfolio and favorable price. As a reminder, we're seeing a favorable shipment volume overlap versus last year's Q1, which was impacted by supply shortages and missed shipping days as a result of severe weather events impacting Texas and Northern Mexico. Depletion growth for the quarter came in at nearly 9%, driven by the continued strength of Modelo Especial and Corona Extra, as well as the return to growth in the on-premise channel. Q1 shipments were generally aligned with cases depleted as distributor inventories remained at normal levels. The on-premise channel grew more than 30% in Q1 and now accounts for approximately 13% of our depletion volume versus 11% in Q1 fiscal 2022, when the on-premise channel continued to be somewhat affected by the pandemic. Moving on to beer margins. As expected, beer operating margin decreased 260 basis points to 40.2%, primarily driven by the expected impact of inflationary headwinds, leading to increased COGS for transportation and material costs, including pallets, cartons, steel, corn, and aluminum. Additional factors include higher depreciation and brewery costs associated with planned capacity additions at our Obregón production facility in Mexico. These headwinds were partially offset by the favorable overlap from two items. One, fixed cost absorption related to increased production levels compared to last year's Q1, driven by the weather events I just mentioned. And two, decreased obsolescence primarily related to hard seltzers. On an absolute dollar basis, marketing investments increased versus prior year. However, due to favorable top-line leverage, marketing as a percent of net sales decreased 40 basis points to 9% versus prior year. We continue to expect marketing as a percent of net sales to be in the 9%-10% range for the year. For full year fiscal 2023, we continue to target net sales growth of 7%-9%, which includes 1-2 points of pricing within our Mexican product portfolio and operating income growth of 2%-4%. This implies an operating margin of approximately 38% for the year. Throughout the remainder of the year, gross margin will be negatively impacted as benefits from price and our cost savings agenda are expected to be more than offset by the following COGS headwinds. First, elevated inflationary pressures will continue throughout fiscal 2023 across numerous cost components, but largely driven by aluminum, cartons, wood pallets, and steel. In addition, we'll see increased logistic costs for fuel and freight rates for truck and rail. Second, we're expecting incremental brewery costs driven by labor inflation in Mexico, as well as increased headcount and training expenses to support our continued capacity expansion initiatives at both Nava and Obregón. Third, as a result of these brewery expansion plans, the step up in depreciation expense will continue as additional capacity is planned to come online throughout the fiscal year. Moving to wine and spirits. Q1 fiscal 2023 net sales increased 2%, driven by a combination of increased shipments and favorable price and mix. Q1 depletion growth was driven by double-digit contributions from Meiomi, The Prisoner brand family, High West, and Casa Noble. Operating margin decreased 330 basis points to 19.6% as mix and price benefits, combined with a favorable inventory adjustment, were more than offset by higher COGS, driven by inflationary headwinds, including higher material costs for grapes and glass, as well as increased transportation and warehousing costs. SG&A and marketing increased as a percent of net sales versus the prior year, primarily driven by increased headcount and marketing initiatives to support key growth areas of our business. For full year fiscal 2023, the wine and spirits business continues to expect net sales to decline 1%-3%, with an increase of 4%-6% in operating income, implying operating margins of about 24% for fiscal 2023. Despite muted Q1 margin results, we expect to achieve our wine and spirits margin goals for the year through a combination of the following initiatives that are primarily weighted to the second half of the year. We expect ongoing premiumization and mix improvement, driven primarily by our fine wine business and the timing of the vintage transition for these products. We have planned incremental pricing actions beginning in the second quarter. A strong New Zealand vintage coming online is projected to drive volume and enhanced margins. Finally, we expect to see big benefits from our ongoing cost savings initiatives. Now let's proceed with the rest of the P&L. This is a good point to provide additional detail regarding the digital business acceleration initiative that Bill outlined a few minutes ago. Constellation is already an emerging digital business today with impressive progress in key areas such as DTC, three-tier e-commerce, and digital marketing. The digital business acceleration effort will help to create a more cohesive digital strategy and is an entirely new way of doing business that is designed to enable us to become best in class, initially in the areas that include procurement, end-to-end supply chain planning, and marketing optimization. The implementation of our new SAP platform last year enabled a framework for us to proceed with this initiative, which is expected to add $35 million-$40 million in corporate expense this year. As a result, our initial corporate expense guidance increased from $230 million to a range of $265 million-$270 million. We expect to start to see some benefits from these investments later this year. Our fiscal 2023 EPS comparable guidance of $11.20-$11.50 remains unchanged despite the lower share count. Corporate expenses as a percent of net sales remains at about 3%, which is at the level it had been trending during the SAP implementation. In fact, the Q1 increase in corporate expense of approximately $7 million was primarily driven by investment spending for our digital business acceleration initiative. You can expect to see the majority of the remaining fiscal 2023 spend for this project to occur in Q2. Comparable basis interest expense for Q1 increased slightly due to higher average borrowings, and we ended the quarter with a net leverage ratio of 3.2x, excluding Canopy equity earnings. During Q1, we entered into an agreement that amended and restated our senior credit facility. This resulted in an increase in our existing revolving credit facility from $2 billion to $2.25 billion and extended its maturity to 2027. In addition, we issued senior notes and subsequently repaid the 2018 3.2% senior notes and the 2013 4.25% senior notes that were coming due next year. We believe that this was the appropriate action to take in a rising interest rate environment. Moving to free cash flow, which we define as net cash provided by operating activities, less CapEx. For Q1, we generated free cash flow of $562 million, which represents a 7% decrease versus prior year, driven by a 73% increase in CapEx investments to support planned capacity expansions and related activities in Mexico. We continue to expect fiscal 2023 free cash flow to be in the range of $1.3 billion-$1.4 billion, which reflects operating cash flow in the range of $2.6 billion-$2.8 billion and CapEx of $1.3 billion-$1.4 billion, including investments targeted for Mexico beer operation expansions. In closing, our excellent performance and strong business fundamentals demonstrate that we are committed to generating net sales and operating income growth while returning value to shareholders. Our path to impressive Q1 results were paved by great execution in growing our core business and supported by investments to enhance our portfolio and operations. With that, Bill and I are happy to take your questions. Thank you. We'll now be conducting a question and answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to move your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment please while we poll for questions. Our first question is coming from Bryan Spillane from Bank of America. Your line is now live. Hey, thanks operator. Good morning, guys. Just two questions for me. One is, you know, as we think about assuming that the shareholder proposal gets approved and there's the $1.5 billion outlay, how would we finance that? You know, are there any offsets to offset the incremental cost of financing? Second is just as we think about the incremental, the accelerated investment in digital, should we think about that as being part of the kind of the cost base going forward? Is it a multi-year investment or, you know, you're just having a good year and you figured you'd spend, you know, you'd sort of pull forward some of the expenses. Really those two things. How we think about offsetting the incremental cost, I guess, of the $1.5 billion, and then how to think about the digital investments. Yeah. Thanks, Bryan. So I'll take those in that order. You know, first on the funding of the $1.5 billion. You know, first of all, we're in a very enviable position given the strength of our balance sheet and given our investment-grade rating. We're obviously, given the timing of this proposal, we're still thinking through exactly how we're going to fund the $1.5 billion. You know, but it likely will include some new debt, and may or may not include some of our existing debt that we have available to us under the revolver. There will be more to come on that as we move forward. you know, that being said, whatever we do, we do remain committed to our investment-grade rating, and we intend to remain within our targeted leverage range, you know, and can do so as we support this commitment. On the digital business acceleration of cost. This will be a multi-year program that's in place. What the spend will be in future years, you know, we will work on that as we move through this year and into next. This is not a pull forward per se. This will be incremental investment. You'll see more about that, as I said, as we move through this year and into next. Thank you. Our next question is coming from Bonnie Herzog from Goldman Sachs. Your line is now live. All right. Thank you. Good morning, everyone. I guess the key question this morning that we're hearing from investors is, you know, on your full year guidance and why you maintained it despite, you know, the significant outperformance in Q1 and also thinking about the significant repurchases. I guess we're all trying to understand your level of conservatism, especially considering it implies that your, you know, your beer shipments will only grow about 3% for the balance of the year, despite, you know, what I think is pretty darn good momentum behind your brand. You know, what are we all missing? I mean, maybe you guys could sort of lay out for us some of the key puts and takes to help us better understand this. Thanks. Yeah, Bonnie. Bill and I will probably try to tag team this a little bit in response to your question. You know, I would say first of all, Q1 was on our estimates for the quarter. Keeping in mind, as we stated it as we entered the year, that this year would be a bit lumpy, just like last year was a bit lumpy as we've been overlapping the production issues we had, you know, last year. You'll continue to see some of that lumpiness. You know, for the balance of the year, I would say that, you know, we continue to expect that we're gonna have strong depletions, and we will continue to have shipment growth that is in line with our long-term algorithm. You know, the business will continue very much going forward in a very strong manner. As it relates specifically to the guidance, you know, I kind of alluded to this in my script. While we did get a benefit from the share repurchases, obviously from retiring more shares and reduced share count, we also introduced today the incremental spend on the digital business acceleration initiative. Those two things kind of, you know, net out against one another. For that matter, you know, as we look again to the balance of the year, it's just a little bit too early for us to make any adjustments, given that we're still monitoring, you know, macroeconomic conditions as well as what those economic conditions, including inflation, have on the consumer. Yeah. The only thing, Bonnie, that I would add to that is, you know, I always try to look at what our depletion rate looks like and to make sure that you're seeing the consumer takeaway. As we stated, we're gaining significant share in our beer business. We're gaining share in almost every sector of our wine and spirits business. Both of those were very positive within the quarter. Don't get confused or befuddled, if you will, by the lumpiness of the shipment timing, because last year, as we know, because of weather-related events, was a bit unusual. Therefore, the overlaps in particular quarters of this year will be a little different. I look at the depletions, and our depletions were very strong, yielding share gaining performance within the market. More importantly, we are continuing to see strong consumer demand throughout the year. Certainly, the consumers continues to be interested with our business, despite an understanding that it's gonna be an interesting year relative to questions around inflation and around recession. We remain very confident in the performance of our business, and I think it was reflected in the quarter we delivered. Thank you. Our next question today is coming from Dara Mohsenian from Morgan Stanley. Your line is now live. Hey guys, good morning. Hey, Dara. Maybe we could just take a step back and talk about how you think your beer business is positioned if we do move into a recession and a period of weaker consumer spending, both looking at past cycles and what you've seen so far this cycle. Second, maybe just an update on June depletions. Have you seen any trade down impact on your business so far? Maybe first conceptual and then be a bit more concrete. What are you seeing near term? Thanks. Sure. Well, let's deal with a few facts that I think are very strong and supportive of our business. We are finding that seven out of ten shoppers who purchase beer have that as a planned purchase before leaving their home. I think that's very strong and speaks very well to our business. We then look at a thing like buy rate, and buy rate the way we discuss buy rate is equal to the number of trips times the spend that occurs during the trip, and that's actually up versus pre-pandemic levels. Is actually accelerating in Q1 for beer versus the prior three months. I think those are very strong indications of the strength of our portfolio, particularly when you look at the share gains that both Garth and I have alluded to up to this point. June looks consistent with our yearly algorithm. I think it was another very solid month, and it's consistent with what our expectations are for the year as we've said it earlier. Just to recap, Modelo continues to be on fire. We continue to see strong results in Corona Extra. Once we get over the supply chain issues in Pacifico, you saw a very strong quarter in Pacifico. So our anticipation is that we are gonna continue to see a very solid year in our beer business as the year progresses. Recognizing you know, there's a lot of unknown variables that are gonna go on relative to the economy. Thank you. Our next question is coming from Nik Modi from RBC. Your line is now live. Hey, good morning guys. This is Filippo Falorni on for Nik. How you doing? It isn't Nik. Question on pricing, on beer pricing. It came in a little bit before expected and your 1%-2% target for the full year. How are you thinking beer pricing will evolve in the balance of the year? Do you think the narrowing price gaps versus domestic beer could be a benefit, potentially accelerating your market share gains going forward as we get into a more uncertain macroeconomic environment? We've been very clear that our long-term algorithm on pricing is 1%-2%. As you know, last year, we were slightly above that result. Frankly, we think that it is particularly important to keep the consumer in mind as we make choices around our pricing algorithm. You know, our current algorithm works very well for us, and it's fairly flexible. The benefit of that approach is it does provide the flexibility as we watch and see how things develop over the course of the year. What I can assure you of is we are closely monitoring what is going on, both from an inflationary standpoint as well as pricing, and we'll be ready to adjust our approach if that proves to be necessary or appropriate. What I would say is it's not going to change our long-term algorithm. We still believe that 1%-2% over time is correct for our business and helps us maintain our consumer base, which ultimately, at the end of the day, is what it's all about. Thank you. Our next question is coming from Chris Carey from Wells Fargo Securities. Your line is now live. Hi, good morning. Morning. Just to start, Bill, just a clarification. You said that depletions are consistent with your yearly algorithm. Were you referring to the beer growth algorithm of 7%-9% or the volume component within that algorithm? That's just a clarification. The main question is, you know, I hear you in response to the resilience of the consumer. You know, I was wondering if you could just maybe frame consumer risk within your portfolio. For example, do you see relatively higher consumer sensitivity in Modelo versus Corona, given different demographic exposure? And maybe just offer some thoughts on how you could evolve your strategy, as you just noted, should you start to see a change in the consumer habits? Thanks. Sure. To answer your question, the first question, it's both. Depletions and volume, we expect to be roughly equal over the course of the year. Because there is growth, shipments are always a little bit higher because you're working off a bigger base. There's always a bit more shipment in any year because fortunately, we have a strong growth profile within our business. Premiumization rates, and I think this is an important one also relative to our portfolio, are continuing to hold. In fact, in beer, 59% of dollars are now in the high end. You know, you'd remember just a few years ago, we were predicting they would pass 50%. It's continued up to 59.5%, as of this point in time, which is up 1.1 points versus prior year. You're also seeing similar activity in the wine business, where the premiumization that's occurring is continuing to occur there as well. All of those things speak very well to the sustainability of our growth profile for our business. As we've said before, there's still plenty of room for growth within all of our franchises. Using Modelo as an example, you know, Modelo is still growing substantially in a lot of secondary markets where there's a lot of distribution opportunity, as well as gaining share in markets that have more sustained and long-term strength. We're very comfortable that we have a long and sustained runway for growth across all of our brands, and certainly the facts are backing that up. Thank you. Next question today is coming from Lauren Lieberman from Barclays. Your line is now live. Great. Thanks. Good morning. I guess I'm trying to think of a few different questions. From an industry volume standpoint, Bill, I mean, you've spoken very clearly to the strength of your brand's momentum in your portfolio. Industry-wide in beer, I mean, my understanding is there's historically a pretty strong correlation between gas prices, and beer consumption. I think some of the industry data that's out there or anecdotal has been that there has been a deceleration in industry volume in recent weeks. I was just curious if you could comment on that, if you guys are not seeing that, if you think you know, something different, if you don't think there's a relationship with gas pricing. I'd be curious that broader industry perspective would be helpful because I have no doubt that within that the you know your brands are in a great spot. Certainly it's something that we're all watching. One of the benefits that you've seen in historical times of recession or recessionary style trends is alcoholic beverage tends to be an affordable luxury and therefore tends to continue to be consumed during that window of time. Let me give you an exact fact around a beer drinking household. It holds an essential status for many consumers. In fact, if you look at 172 edible categories, beer ranks 15th about. Therefore what it says is the consumer is consistently wanting to continue to participate in this category. That doesn't mean that there won't be short-term impacts because of gas prices and other inflationary pressures. Overall, it tends to be a category that is a staple for a lot of people, and that's probably particularly true for our Hispanic consumer base, which, as you know, we over-index with that consumer base. I think it speaks pretty well to our position, at least, of being able to work our way through a recessionary environment in a pretty healthy way. Thank you. Next question is coming from Nadine Sarwat from Bernstein. Your line is now live. Hi. Morning, everybody. Two questions from me, if I may. The first, could you just help us understand exactly why the Q1 price mix was above that longer term 1%-2% that you mentioned? Is that the phasing of pricing? Is there a mix component we're not taking into account? Or perhaps some distributors taking pricing? Color on that would be appreciated. My second question on Canopy Growth. I appreciate your comments in the prepared remarks that you remain committed to that investment. The company does continue to lose share in Canadian recreational cannabis, continues to face challenges reaching profitability. U.S. federal legalization is looking increasingly less likely, at least in the short term. Could you maybe provide more color as to what gives you conviction that this business can meaningfully improve in the long term? Thank you. Sure. Let me take the first part of that. Because you are correct, if you look at the data, it certainly shows that the pricing scenario at the moment is above the 1%-2% algorithm. There's a number of things involved in that. One is it only reflects track channels, so that's a piece of it. It is partly mix. You know, as you see different sizes and different products and different subcategories within beer affecting it, you see different scenarios. It's partly retailers making choices about hitting specific price points, which in some instances will drive the percentage higher, but doesn't reflect a change in our pricing strategy. As I said earlier, I think this all goes back to our algorithm being particularly important and particularly flexible in our ability to see what's happening in the market and adjust as necessary as part of it. All of those elements weigh into what is certainly some higher pricing than what we have noted in our words. Yeah. On the Canopy question, there's no doubt that over the past couple years, Canopy has faced a number of headwinds. You know, that being said, we remained very, very positive on the category and very optimistic for Canopy. The reason we feel that way, right, is that, you know, number one, in Canada, we believe that the Canopy team through its recent announced restructuring programs have a renewed focus on driving the premium end of that business, which is profitable, and that the team up there is on a path to profitability in the near term. In the U.S., we continue to see very good green shoots for the category in general. In terms of consumer consumption, you know, whether you look at retail sales or you look at state by state tax income associated with cannabis sales, you know, both are growing, you know, very quite nicely, showing that the consumer is adopting, you know, the category. We also really like the approach that the Canopy team has taken in the U.S. Jetty and Wana have been very well positioned to take advantage of the U.S. market once it does open up and once legalization occurs. So that's why we continue to have conviction on the category. Thank you. Our next question is coming from Robert Ottenstein from Evercore ISI. Your line is now live. Great. Thank you very much. Just wanted to follow up a little bit on the pricing question. You know, if you can talk a little bit about your views about what appears to be happening, you know, based on channel checks, trade checks, that retailers are essentially taking or increasing their margin, you know, given the much higher price increases for other brands. You know, just the fact that, you know, distributors, right, have pressures in terms of their costs, and they're likely to, you know, wanna see higher prices. If you could talk maybe a little bit about that dynamic. You know, I think we all understand the long-term algorithm, why that makes sense, but these are extraordinary times. Thank you. They are extraordinary times. I think the one thing that's important, Robert, in extraordinary times is to remain balanced, sensible, and not sort of get caught up in the whirlwind of the moment and doing things that what I would describe as anti-consumer. You know, that's why we are, again, saying that we are going to be judicious as to how we look at this. Balancing the understanding that there are a lot of pressures that our consumers and all consumers are under because of inflationary pressures in the market. You have seen some increase in pricing, as one of the prior callers asked, that is being taken either at the distributor level or at the retail level to hit specific price points, and it's being reflected. We're trying to walk the delicate line of what's appropriate, what we can do to reflect and address the rising costs that we are all facing while keeping our consumer base. We think that's in the long-term interest, not only of our company, but for the category as well. As I said, we're going to be very judicious. We are watching it very closely. As I said earlier, not to repeat myself, but we do have a very flexible algorithm that allows us to address questions in real time. I can assure you, we keep our eye on it almost on a daily basis. Thank you. Our next question is coming from Andrea Teixeira from JP Morgan. Your line is now live. Thank you. Good morning. As we all listen to what you said, in terms of, like, how you exit consumptions and depletions, it sounds as if you are still quite confident as you exit the quarter and enter the Q2, and correct me if I'm wrong on the beer side. So given you cast the guidance for the balance of the year, should we summarize and interpret that you're monitoring how volumes would flow through as you're shipping more than depletion? At this point, you're helping wholesalers and retailers take a larger share of their profits, at this point. If everything goes well in the summer, goes as expected, perhaps you could take pricing as you go into the fall, which is a typical pricing point, a pricing action point. If you can comment on how you're gonna balance because, you know, your low single digits implied shipment volume for the balance of the year, obviously, it is scaring investors. Is there anything we should be noting in terms of, like, the level of conservatism that you are assuming now, or is that just a function of, again, looking at how your typical consumer will behave given higher oil prices? Hopefully I'll answer most of those. Here is how I try to answer it. First of all, let me go back to something that I said in my prepared remarks, which is, while it looks like we shipped a lot more than we depleted in the first quarter, that is purely because of the overlap of last year, where there was weather events. In the absolute, on the beer side, the ships and depletes in the absolute were roughly the same, and we expect that to remain over the course of the year. As Garth noted a little earlier, it is gonna be a little lumpy because we had a time in the first quarter where we went against weather-related activities. We obviously, in the back half of the year, went against times when we were rebuilding the inventories for last year. It'll just be a bit of a lumpy year. Relative to pricing, most of our pricing as we look at how we do it, is roughly 60% in the first half and 40% in the second half. That's just the way it has worked consistently. You know, we do have pricing moments, and as you know, we look at it SKU by SKU, market by market. We don't do broad-based pricing answers. It is a very micro view of pricing that and how we look at it. Again, that gives us the opportunity to see how the year is developing, what opportunities exist in the marketplace, and we look at that, as I said, on an ongoing basis. We think that remains the best way for us to proceed. It's worked very well for the company over the course of time, and we think it's gonna continue to serve us well going forward. Thank you. Our next question is coming from Bill Chappell from Truist Securities. Your line is now live. Thanks. Good morning. Thanks for squeezing me in. You know, kind of the same questions that you've gotten on elasticity and market environment and that on beer, but applied to wine. Kind of any thoughts or what you're seeing or would expect to see kind of how this environment affects wine sales? When I think of that, I mean, I know there's not the, you know, it's, as you said, affordable luxury, but just wondering if you're seeing consumers go from $25 wine down to $20 wine or if there's a net benefit for the Woodbridge, you know, franchise, as more and more people are looking at popular price wine. Just didn't know if you were seeing any of that or expect to see any of that and how that would affect your kind of outlook. Sure, you bet. In wine, you know, and I quoted the beer example earlier. In wine, the entry levels of the high end are, frankly, the most robust growth profiles, and that's sort of in that $11-$25 range. That represents about 28%-29% of total dollars. And that's also, interestingly enough, it's the exact same number, 1.1 points versus a year ago. I quoted the beer one was also 1.1 points a bit earlier, that's also up 1.1 points. Of course, that's perfect for us because we've got brands like Kim Crawford, Meiomi, and Unshackled and various other brands that fit right into that price point. Therefore, it's not surprising that those brands are doing extraordinarily well. As I said earlier, our premium wine and our fine wine and craft spirits businesses had a very strong quarter with strong depletion growths of 8% and 16% respectively. We had a very strong start in wine and certainly the premiumization that you're seeing continues. It would be a different answer if we talked about mainstream wine, where frankly, it's been more challenged, even though we're very pleased that our Woodbridge brand is gaining share in a challenged subcategory. Overall, it's very similar in style to what I responded earlier in beer. We're quite pleased that it is. Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Bill for any further closing comments. Great. Thanks again. Thank you all for joining our call today. As you could hear, we're off to a very good start to the year. We delivered excellent operating performance underpinned by strong business fundamentals, which provides us with great momentum as we head into our key summer selling season. Consumer demand and takeaway, especially for our beer brands, remains robust, as I've stated before, and we're well-positioned to achieve our targeted financial goals for the year. Overall, we've demonstrated again that we're committed to pursuing our strategic growth initiatives while returning value to our shareholders. In closing, I'd like to wish everyone in the United States a happy Fourth of July holiday weekend and hope your celebrations with your friends and family include some of our fantastic beer, wine, and spirits products. Thanks again, everybody, and have a safe and healthy summer. Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.