Constellation Brands (NYSE: STZ ) has one of Mexico's most valuable beer brands, although its marketing agreements only allow it to sell outside of the country. While the stock has fallen sharply recently, I think this is justified because the riskMy name is María Fernanda and I'm currently studying an MBA. My inspiration investors are Warren Buffett, Peter Lynch and Terry Smith, so I look for quality companies at a reasonable valuation. I believe that, in the long term, fundamentals are what drive the shar ...

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Group 1 - The Gross Law Firm has issued a notice to shareholders of Constellation Brands, Inc. regarding a class action lawsuit related to the company's fiscal results and financial outlook [1] - The class period for the lawsuit is from April 11, 2024, to January 8, 2025, during which shareholders are encouraged to contact the firm for possible lead plaintiff appointment [1][2] - Allegations include that Constellation Brands provided misleading information about its financial performance, particularly a significant miss in sales for the Beer segment and an even larger miss for the Wine & Spirits segment, leading to a sharp decline in stock price from $219.28 to $181.81 [1] Group 2 - Shareholders have a deadline of April 21, 2025, to register for the class action and can enroll in a portfolio monitoring software for updates on the case [2] - The Gross Law Firm aims to protect investors' rights and seeks recovery for losses incurred due to misleading statements or omissions by companies [3]

Core Viewpoint - Constellation Brands has provided a weaker-than-expected outlook for fiscal 2026, primarily due to the impact of higher U.S. tariffs on imported beer from Mexico, which is a significant part of its business [1][3][6]. Group 1: Financial Performance - For fiscal 2025 fourth-quarter earnings, Constellation exceeded Wall Street's estimates, reporting adjusted earnings per share of $2.63 compared to the expected $2.28, and revenue of $2.16 billion versus the anticipated $2.13 billion [2][8]. - The company anticipates comparable earnings per share for fiscal 2026 to be in the range of $12.60 to $12.90, significantly below Wall Street's estimate of $13.97 per share [6]. Group 2: Tariff Impact - The Trump administration has imposed a 25% tariff on all imported canned beer and empty aluminum cans, effective April 4, which directly affects Constellation as it imports all its beer from Mexico [3][4]. - Despite a temporary reduction in reciprocal tariffs to 10% for 90 days, this does not apply to sector-specific duties like those on aluminum, which will continue to impact costs [3]. Group 3: Strategic Changes - Constellation plans to reposition its portfolio by divesting from "mainstream" wines and focusing on higher-priced brands, with a recent sale of its Svedka vodka brand to Sazerac [5]. - The company has lowered its medium-term outlook for fiscal 2027 and 2028, projecting enterprise sales growth to be between 2% and 4%, down from a previous estimate of 6% to 8% [7]. Group 4: Capital Expenditures - Constellation plans to reduce its capital expenditures for fiscal 2027 and 2028, projecting a 40% year-over-year decrease in fiscal 2027 and a 35% decrease in fiscal 2028, compared to an earlier outlook of $5 billion in spending from fiscal 2024 to fiscal 2028 [7].

Financial Performance - Reported net sales for FY25 were $10.2 billion, reflecting a 2% increase compared to FY24, while organic net sales also grew by 3%[22]. - The beer segment achieved a net sales growth of 9% in FY25, with operating income increasing by 10% to $3.4 billion[18][25]. - Wine and spirits segment reported a decline in net sales of 7% to $1.67 billion, with operating income decreasing by 18% to $325 million[18][21]. - Consolidated net sales for the year ended February 28, 2025, increased by 2% to $10,208.7 million, up from $9,961.8 million in the previous year[102]. - Organic net sales for the year ended February 28, 2025, rose by 3% to $10,208.7 million, compared to $9,939.2 million for the year ended February 29, 2024[102]. - Beer net sales for the year ended February 28, 2025, increased by 5% to $8,539.8 million, while Wine and Spirits net sales decreased by 7% to $1,668.9 million[102]. - Net income for the year ended February 28, 2025, was a loss of $31.1 million, compared to a net income of $1,765.2 million for the year ended February 29, 2024[97]. - The company reported a net loss attributable to Constellation Brands, Inc. of $375.3 million for the three months ended February 28, 2025, compared to a net income of $392.4 million for the same period in 2024[95]. Cash Flow and Capital Expenditures - Expected operating cash flow of approximately $9 billion from FY26 to FY28, with free cash flow projected between $6 billion to $7 billion[14]. - Operating cash flow for FY25 was $3.2 billion, representing a 28% increase compared to FY24[21]. - Capital expenditures for FY25 were $992 million, with expectations of approximately $1 billion in cumulative CAPEX for FY26 to FY28[33]. - Total capital expenditures from FY26 to FY28 are expected to be around $2.4 billion, with approximately $2 billion allocated to the Beer Business[66]. Strategic Initiatives and Cost Savings - Enterprise-wide restructuring actions are expected to yield over $200 million in net annualized cost savings by FY28[14]. - The company anticipates over $100 million in net annualized cost savings across COGS, Marketing, and SG&A by FY28, including approximately $55 million in FY26[58]. - The company delivered approximately $220 million in cost savings through supply chain efficiencies, resulting in a 180 basis point increase in beer business operating margin to 39.7%[21]. - Significant cash generation and returns to shareholders expected, with a compelling growth outlook beyond FY26[13]. Market Growth and Segment Performance - Beer segment anticipated to achieve 2% to 4% net sales growth and operating margins of 39% to 40% in FY27 and FY28, driven by distribution gains and marketing investments[14]. - Wine and Spirits segment expected to deliver up to 3% net sales growth and operating margins of 22% to 24% in FY27 and FY28, following the 2025 Wine Divestitures Transaction projected to generate around $900 million in proceeds[14]. - The company is the only large-scale entity to be a Top 10 growth leader for 12 consecutive years, holding the 1 position for 6 of the last 8 years[14]. - Modelo Especial contributed over 40% of Core Beer Brands POD growth from FY23 to FY25 and is expected to contribute over 30% from FY25 to FY28[40]. - Pacifico was the second largest POD growth driver among Core Beer Brands from FY23 to FY25, contributing over 20% of uplift and is expected to contribute over 30% from FY25 to FY28[40]. Shareholder Returns and Dividends - Committed to a disciplined capital allocation strategy, including share repurchases against a $4 billion authorization approved in April 2025[14]. - A new total 3-year $4 billion share repurchase authorization has been established to enhance returns[65]. - The company reported a cash dividend declared per common share of $1.01 for the three months ended February 28, 2025, compared to $0.89 in the prior year[95]. - The company plans to maintain a net leverage ratio of around 3.0x and a dividend payout ratio of approximately 30% from FY26 to FY28[31]. Future Projections - The company expects low single-digit CAGR for consolidated net sales from FY26 to FY28, with an operating margin target of approximately 34-35%[30]. - The company expects to maintain best-in-class operating margins of approximately 39% to 40% in FY26-FY28[52]. - The forecasted EPS (GAAP) for the year ending February 28, 2026, is projected to be between $12.33 and $12.63, with a comparable EPS (Non-GAAP) forecasted between $12.60 and $12.90[138]. - Free cash flow (Non-GAAP) guidance for the year ending February 28, 2026, is estimated to be between $1,500 million and $1,600 million[141].

Core Insights - Constellation Brands, Inc. reported its fiscal year and fourth quarter 2025 financial results, along with an outlook for fiscal years 2026 to 2028 [1] Company Overview - Constellation Brands is a leading international producer and marketer of beer, wine, and spirits, with operations in the U.S., Mexico, New Zealand, and Italy [2] - The company's mission focuses on building beloved brands and enhancing human connections, which drives its growth as one of the fastest-growing large consumer packaged goods companies in the U.S. [2] Product Portfolio - The company offers a range of high-end, iconic imported beer brands, including Corona Extra, Modelo Especial, and various Modelo Cheladas, as well as fine wines and craft spirits like The Prisoner Wine Company and Robert Mondavi Winery [3] Sustainability and ESG Strategy - As an agriculture-based company, Constellation Brands emphasizes sustainable and responsible operations, integrating its ESG strategy into its business practices [4] - The company aims to be a good steward of the environment, invest in communities, and promote responsible beverage alcohol consumption [4]

Core Viewpoint - Constellation Brands, Inc. has signed an agreement to divest primarily mainstream wine brands and related vineyards and facilities to The Wine Group, aiming to focus on higher-end wine and craft spirits that align with evolving consumer preferences [1][3][7]. Group 1: Transaction Details - The divestiture includes brands such as Woodbridge, Meiomi, Robert Mondavi Private Selection, Cook's, SIMI, and J. Rogét sparkling wine, along with associated inventory, facilities, and vineyards [3][6]. - The transaction is subject to regulatory approval and is expected to close immediately after the end of Constellation's first quarter of fiscal year 2026 [1][3]. Group 2: Retained Portfolio - Constellation's retained wine portfolio will consist of premium wines priced at $15 and above, including brands like Robert Mondavi Winery, Schrader, and Kim Crawford, as well as a selection of award-winning craft spirits [2][7][8]. - The retained brands are positioned in higher-growth segments, complementing Constellation's higher-end beer portfolio [3][7]. Group 3: Strategic Goals - The transaction reflects a multi-year strategy to reconfigure the business towards a portfolio of higher-end brands, enhancing competitive positioning and aligning with consumer trends [3][4]. - The company anticipates net annualized cost savings exceeding $200 million by fiscal year 2028, with most restructuring efforts expected to be completed within fiscal year 2026 [4].

Core Insights - Constellation Brands, Inc. is set to release its fourth-quarter earnings results on April 9, with analysts expecting earnings of $2.28 per share, an increase from $2.26 per share in the previous year [1] - The company is projected to report quarterly revenue of $2.13 billion, slightly down from $2.14 billion a year earlier [1] Management Changes - On February 18, Constellation Brands announced the departure of E. Yuri Hermida, the Executive Vice President, Chief Growth & Strategy Officer [2] - Following this announcement, Constellation shares fell by 0.9%, closing at $170.96 [2] Analyst Ratings - Wells Fargo analyst Chris Carey maintained an Overweight rating but reduced the price target from $230 to $210 [4] - Barclays analyst Lauren Lieberman also maintained an Overweight rating, cutting the price target from $205 to $203 [4] - Morgan Stanley analyst Dara Mohsenian downgraded the stock from Overweight to Equal-Weight, lowering the price target from $220 to $202 [4] - Piper Sandler analyst Michael Lavery downgraded the stock from Overweight to Neutral, reducing the price target from $245 to $200 [4] - TD Cowen analyst Robert Moskow maintained a Hold rating and decreased the price target from $270 to $260 [4]

Constellation Brands, Inc. STZ will release its fourth-quarter earnings results after the closing bell on Wednesday, April 9. STZ Price Action: Shares of Constellation Brands fell 0.9% to close at $170.96 on Tuesday. So, how can investors exploit its dividend yield to pocket a regular $500 monthly? To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $253,876 or around 1,485 shares. For a more modest $100 per month or $1,200 per year, you would need $ ...

Core Viewpoint - A class action securities lawsuit has been filed against Constellation Brands, Inc. due to alleged securities fraud affecting investors between April 11, 2024, and January 8, 2025 [1][2] Group 1: Lawsuit Details - The lawsuit aims to recover losses for investors impacted by the alleged fraud during the specified period [1] - The complaint highlights that the defendants provided misleading information regarding Constellation's fiscal year 2024 results and 2025 financial outlook, particularly in the Wine and Spirits business [2] - A significant sales performance miss was reported in the Beer segment and an even larger miss in the Wine & Spirits segment, leading to a stock price drop from $219.28 on January 8, 2025, to $181.81 on January 10, 2025 [2] Group 2: Next Steps for Investors - Investors who suffered losses during the relevant timeframe have until April 21, 2025, to request appointment as lead plaintiff, although participation in any recovery does not require this [3] - Class members may be entitled to compensation without any out-of-pocket costs or fees [3] Group 3: Firm Background - Levi & Korsinsky has a history of securing hundreds of millions of dollars for shareholders and is recognized as one of the top securities litigation firms in the United States [4]