Constellation Brands Q4 Earnings Beat Estimates As Beer Sales Soar

Zinger Key Points
  • Constellation Brands reports Q4 earnings above street view.
  • Constellation Brands expects FY25 adjusted EPS of $13.50 - $13.80.

Constellation Brands Inc STZ reported fourth-quarter FY24 sales growth of 7.1% year-on-year to $2.14 billion, beating the analyst consensus estimate of $2.10 billion.

Net sales for the Beer segment increased 11% Y/Y to $1.702 billion, and Wine and Spirits declined 6% Y/Y to $436.4 million. Shipment volume for Beer climbed 10.5%, while Wine and Spirits declined 5%.

Gross profit increased 8.1% to $1.03 billion, and the operating income jumped 35% to $629.4 million. The operating margin for the quarter was 29.4%.

Comparable EPS, excluding Canopy EIE, was $2.30. Comparable EPS of $2.26 beat the consensus estimate of $2.09.

The company generated an operating cash flow of $2.8 billion for the twelve months and a free cash flow of $1.5 billion.

Constellation Brands ended the quarter with $152.4 million in cash and equivalents as of February 29, 2024.

Constellation’s board declared a quarterly cash dividend of $1.01 per share, an increase of 13%, payable on May 17, 2024, to stockholders of record on May 3, 2024.

“We also generated strong operating cash flow, which enabled continued execution of our capital allocation priorities including: reducing our net leverage ratio from 3.6x to 3.2x, returning over $900 million to shareholders in dividends and share repurchases, and deploying approximately $900 million to modular brewery capacity additions to support the growth of our Beer Business,” said CFO Garth Hankinson.

Guidance: Constellation Brands sees FY25 net sales growth of 6% – 7%. It expects Comparable EPS of $13.50 – $13.80 against an estimate of $13.44.

The company sees an operating income growth of 10% – 12% and capital expenditures of $1.4 billion – $1.5 billion. 

Constellation Brands sees an operating cash flow of $2.8 billion – $3 billion and a free cash flow of $1.4 billion – $1.5 billion.

Price Action: STZ shares are trading higher by 0.73% at $266.85 in premarket on the last check Thursday.

Photo: Anrita from Pixabay

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