Constellation Brands Exceeds Earnings Expectations but Falls Short on Sales

Constellation Brands, the seller of Mexican beer Modelo Especial, has reported quarterly earnings that surpassed Wall Street’s expectations. However, the company fell short on sales and adjusted its fiscal-year guidance.

Quarterly Performance

For the third fiscal quarter ended November 30, Constellation Brands posted adjusted earnings of $3.19 per share, higher than the anticipated $3.01 per share. This marked an improvement compared to the earnings of $2.83 per share in the same period last year.

However, the company’s sales of $2.47 billion were below the expected $2.54 billion. In the previous year’s quarter, sales amounted to $2.44 billion.

Revised Fiscal-Year Guidance

Constellation Brands has lowered its forecast for the fiscal year ending in February. The new earnings guidance range is set at $9.15 to $9.35 per share, down from the earlier projection of $9.60 to $9.80 per share. Despite this adjustment, the company has confirmed its guidance for adjusted earnings and has raised its outlook for operating cash flow and free cash flow.

Strong Performance in Beer Business

Bill Newlands, President and CEO of Constellation Brands, expressed satisfaction with the Q3 results of their Beer Business. He highlighted the exceptional growth of Modelo Especial, which achieved double-digit volume growth and solidified its position as the leading beer in terms of tracked channel dollar sales in the U.S. Additionally, other core beer brands like Corona Extra and Pacifico experienced significant growth and ranked among the top 10 gainers across the U.S. beer category.

Market Reaction

Following the earnings announcement, Constellation Brands’ stock rose by 0.7% in premarket trading. Over the past year, shares have recorded a 13% increase.