Constellation Brands' Continued Beer Strength Offsets Its Wine And Spirits Weakness


20-Year Pro Trader Reveals His "MoneyLine"

Ditch your indicators and use the "MoneyLine." A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.


Despite a decline in the wine and spirits business, Constellation Brands (NYSE:STZ) outperformed its expectations with beer sales with its latest quarterly report. Constellation Brands, whose operations span across the U.S., Mexico, New Zealand, and Italy, delivered a stronger than expected fourth quarter profit, with management indicating that the segment greatly contributed to its success over the fiscal year. 

Fourth Quarter Highlights

For the quarter that ended in February, Constellation Brands posted revenue of $2.3 billion, surpassing Wall Street estimates of $2.1 billion. It reported earnings per share of $2.26, also surpassing analyst estimates of about $2.10.

The beer business continued its strong growth momentum with its 56th consecutive quarter of volume growth. CEO Bill Newlands also added the company achieved a significant milestone this year, as Modelo Especial became the number one beer in U.S. dollar sales. Beer sales through retailers alone expanded 8.9%, compared with 6% achieved during last year’s comparable quarter. 

On the other hand, challenging marketplace dynamics continued to pressure sales volumes of its wine and spirits category with sales falling flat.

Full Year Results

Net sales rose 5% YoY to $9.962 million while net income rose 12% due to price rises and operating efficiencies.

A lifted adjusted fiscal 2025 outlook

Fueled by the strength of its beer business, Anheuser Busch InBev SA (NYSE:BUD) rival lifted its full-year earnings and sales forecasts. Constellation Brands guided for earnings in the range between $13.50 and $13.80 eper shareand sales growth between 6% and 7%. Constellation expects its beer sales to rise by a further 10% in the undergoing financial year both due to its brand strength as well as the US consumer’s shift away from wines and spirits in favor of beer.

The anual results of Anheuser Busch reflected a new beer trend of health-conscious consumers.

Interestingly, Anheuser Busch reported its beer sales dropped in North America last year while its non-alcoholic beer sales topped estimates, reflecting the consumer behaviour of more health-conscious consumers. Anheuser Busch responded to the trend with the expansion of beverage choices. With its no-alcohol beer portfolio that includes Budweiser Zero, Stella Artois 0.0 and others, Anheuser Busch reported revenue growth in the high teens, according the annual report. Global Market Insights estimated that between 2023 and 2032, the nonalcoholic wine and beer market will continue growing at an annual rate of 7% and surpass $30 billion by 2025. With Sam Glaetze and his experience that spans over three decades becoming the new leader of the segment,Newlands is confident that the wine and spirits division will improve. On the back of the continued resilience of its core beer brands, Constellation confidently lifted its full year guidance. 

DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.


20-Year Pro Trader Reveals His "MoneyLine"

Ditch your indicators and use the "MoneyLine." A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.


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