US Markets
Thursday, October 5th, 2023 1:50 pm EDT
Key Points
- Strong Financial Performance: Constellation Brands reported earnings and revenue for its fiscal second quarter of 2024 that exceeded analysts’ expectations. This indicates a robust financial performance for the company during this period.
- Beer Division Dominance: The company’s beer business, which includes popular brands like Modelo Especial and Corona Extra, experienced double-digit sales growth and continued to dominate the overall beer and high-end beer categories. Modelo Especial, in particular, saw significant growth and remained the best-selling brand in the U.S. beer category.
- Wine and Spirits Challenges: While the beer division performed well, Constellation Brands faced challenges in its wine and spirits segment, with a notable decline in sales and depletions. However, certain brands within this division, such as Meiomi and Kim Crawford wines and Mi Campo tequila, showed positive growth. The company’s CEO expressed optimism about growth acceleration and margin improvement in the Wine and Spirits Business in the second half of the fiscal year.
Constellation Brands, the Mexican beer giant behind brands like Modelo Especial and Corona Extra, has reported strong financial results for its fiscal second quarter of 2024. The company witnessed double-digit sales growth in its beer division, maintaining its dominance in the beer and high-end beer markets. In contrast, sales of wine and spirits saw slower performance. Constellation Brands has revised its earnings per share outlook for fiscal 2024 upwards to a range of $9.60 to $9.80, compared to the earlier range of $9.35 to $9.65.
For the three months ending on August 31, Constellation’s results exceeded Wall Street expectations:
- Earnings per share: $3.70 (adjusted) vs. $3.36 expected.
- Revenue: $2.84 billion vs. $2.82 billion expected.
The beer portfolio of Constellation Brands achieved a 12% increase in sales, driven by an 8.7% growth in shipments. The Modelo brand family, in particular, performed exceptionally well, with Modelo Especial growing nearly 9% and Modelo Chelada brands experiencing growth of over 40%. Modelo Especial continued to be the best-selling brand in the U.S. beer category.
On the other hand, the wine and spirits segment showed a decline in sales, with a 14% decrease year over year and an almost 8% decrease in depletions. However, some brands within this division stood out, including Meiomi and Kim Crawford wine brands, which saw 7% and 6% depletion growth, respectively. Additionally, Constellation’s craft spirit, Mi Campo tequila, reported impressive depletion growth of over 60%.
CEO Bill Newlands expressed confidence in solid growth acceleration and margin improvement for the Wine and Spirits Business in the second half of the fiscal year. In previous quarters, Constellation Brands experienced strong performance in its beer sales, with an 11% year-over-year increase driven by stable consumer demand and higher pricing.
For full original article on CNBC, please click here: https://www.cnbc.com/2023/10/05/constellation-brands-stz-earnings-q2-2024.html
