Core Viewpoint - Constellation Brands is facing significant challenges due to weak wine demand, leading to a potential asset write-down of up to $2.5 billion and a drastic reduction in earnings outlook for the year [1][2]. Financial Outlook - The company has nearly halved its earnings outlook to a range of $3.05 to $7.92 per share, down from initial expectations of $14.63 to $14.93 per share [2]. - Total sales outlook has been revised down to between 4% and 6%, from a previous estimate of 6% to 7% [2]. Market Conditions - CEO Bill Newlands highlighted ongoing macroeconomic headwinds, particularly rising unemployment, as factors contributing to a slowdown in consumer demand for products [3][6]. - A sales decline of 4% to 6% is expected in the wine and spirits division, contrasting with earlier expectations of flat sales [3]. Strategic Adjustments - The company plans to adjust pricing and enhance marketing efforts to mitigate sales challenges in the wine and spirits sector [4]. - Despite the struggles in the wine division, Constellation anticipates a sales growth of 6% to 8% in its beer division [4]. Sales Performance - The demand drop has been particularly pronounced in the top five states for the beer business, which account for over half of Constellation's total sales volumes [7]. - The company had previously raised its profit outlook in July due to improved margins and strong beer sales [7]. Stock Performance - On the day of the announcement, Constellation shares rose by 2%, and the stock has increased by 0.7% year-to-date [8]. - The company has a market capitalization of $44.99 billion [8].

Constellation Brands, Inc. (NYSE:STZ) Barclays 17th Annual Global Consumer Staples Conference September 3, 2024 11:15 AM ET Company Participants Bill Newlands - President and Chief Executive Officer Garth Hankinson - Executive Vice President and Chief Financial Officer Conference Call Participants Lauren Lieberman - Barclays Lauren Lieberman Thank you for being here and welcome to the 33rd Annual Barclays Global Consumer Staples Conference. As always, it's awesome to see so many familiar faces once again, a ...

Financial Outlook - The company updated its reported EPS guidance to a range of $3.05 - $7.92 and raised the lower end of comparable EPS guidance to $13.60 - $13.80, affirming expectations for double-digit comparable EPS growth [1][2] - Enterprise net sales growth is now projected at 4% - 6%, with reported operating income expected to decline by (68)% - (36)%, which includes an anticipated Wine and Spirits goodwill impairment loss of approximately $1.5 - $2.5 billion [1][2][4] - Beer net sales growth is updated to 6% - 8%, with operating income growth raised to 11% - 12%, while Wine and Spirits net sales and operating income are expected to decline by (6)% - (4)% and (18)% - (16)%, respectively [1][2] Business Performance - The company anticipates a non-cash goodwill impairment loss for the Wine and Spirits business due to negative trends in the U.S. wholesale market, particularly affecting mainstream and premium wine brands [4][5] - Despite macroeconomic headwinds, the Beer Business is on track for a mid single-digit volume increase this fiscal year, with strong brand loyalty and only minor shifts to value packs [5][6] - The company continues to outperform the CPG sector by nearly 3 percentage points in dollar sales and remains the top dollar share gainer in the beer category [5][6] Cost Management and Capital Allocation - Cost savings and efficiency initiatives are providing significant benefits for the Beer Business, allowing for reinvestment into marketing programs [5] - The company aims to achieve a ~3.0x net leverage ratio target this fiscal year and plans to return cash to shareholders through dividends and share repurchases, including $449 million executed in the first half of the fiscal year [5][6] Free Cash Flow - Free cash flow is projected to be between $1.4 billion and $1.5 billion, providing liquidity for general corporate purposes after debt service and dividend payments [3][26]

ROCHESTER, N.Y., Aug. 29, 2024 (GLOBE NEWSWIRE) -- Constellation Brands, Inc. (NYSE: STZ), a leading beverage alcohol company, announced today it will report financial results for its second quarter ending August 31, 2024, on Thursday, October 3, 2024, before the open of the U.S. markets. A conference call to discuss the financial results and outlook will be hosted by President and Chief Executive Officer, Bill Newlands, and Executive Vice President and Chief Financial Officer, Garth Hankinson, at 10:30 a.m ...

Q1 FY25 Financial Performance - Enterprise net sales increased by 6% to $2.662 billion compared to Q1 FY24[155] - Beer Business net sales increased by 8% to $2.2728 billion in Q1 FY25[155] - Wine and Spirits Business net sales decreased by 7% to $389 million in Q1 FY25[155] - Enterprise reported EPS was $4.78, and comparable EPS was $3.57 in Q1 FY25[155] - The company's capital expenditure was $375 million, primarily focused on Beer brewing capacity additions[169] FY25 Outlook - Enterprise net sales are expected to grow by +6% to +7%[158] - Beer Business net sales are expected to grow by +7% to +9%, and Wine and Spirits Business net sales are expected to range from a decline of (0.5)% to growth of +0.5%[158] - Enterprise reported EPS outlook is updated to $14.63 - $14.93, and comparable EPS outlook is affirmed at $13.50 - $13.80[169] - The company targets operating cash flow of $2.8 billion to $3.0 billion and free cash flow of $1.4 billion to $1.5 billion[169] Capital Allocation - The company reduced its net leverage ratio to approximately 3.1X[3, 169] - Over $240 million of share repurchases were executed through June 2024[3, 169]

Constellation Brands, Inc. (NYSE:STZ) Q1 2025 Earnings Conference Call July 3, 2024 10:30 AM ET Company Participants Joseph Suarez - SVP, IR Bill Newlands - President & CEO Garth Hankinson - CFO Conference Call Participants Andrea Teixeira - JP Morgan Carlos Laboy - HSBC Dara Mohsenian - Morgan Stanley Filippo Falorni - Citi Lauren Lieberman - Barclays Nik Modi - RBC Capital Markets Bryan Spillane - Bank of America Peter Grom - UBS Chris Carey - Wells Fargo Securities Bonnie Herzog - Goldman Sachs Rob Otten ...

[PART I – FINANCIAL INFORMATION](index=8&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Constellation Brands, Inc. for the quarterly period ended May 31, 2024 [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheet as of May 31, 2024, shows total assets of $26.06 billion, an increase from $25.69 billion at February 29, 2024 Consolidated Balance Sheet Highlights (in millions) | Account | May 31, 2024 | February 29, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$26,060.1** | **$25,691.7** | | Total Current Assets | $3,828.4 | $3,729.5 | | Property, plant, and equipment | $8,298.0 | $8,055.2 | | Goodwill | $7,985.4 | $7,980.3 | | **Total Liabilities** | **$15,488.2** | **$15,627.1** | | Total Current Liabilities | $3,122.2 | $3,141.7 | | Long-term debt, less current maturities | $10,682.9 | $10,681.1 | | **Total Stockholders' Equity** | **$10,571.9** | **$10,064.6** | [Consolidated Statements of Comprehensive Income (Loss)](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) For the three months ended May 31, 2024, net income attributable to CBI significantly increased to $877.0 million from $135.9 million, driven by higher net sales and a gain from unconsolidated investments Q1 FY2025 vs Q1 FY2024 Performance (in millions, except per share data) | Metric | Q1 2025 (ended May 31, 2024) | Q1 2024 (ended May 31, 2023) | | :--- | :--- | :--- | | Net sales | $2,661.8 | $2,514.9 | | Gross profit | $1,403.8 | $1,257.8 | | Operating income (loss) | $941.6 | $764.7 | | Income (loss) from unconsolidated investments | $82.0 | $(415.4) | | Net income (loss) attributable to CBI | $877.0 | $135.9 | | Diluted EPS attributable to CBI | $4.78 | $0.74 | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities slightly increased to $690.5 million, while cash used in investing and financing activities rose due to higher capital expenditures and treasury stock purchases Cash Flow Summary (in millions) | Activity | For the Three Months Ended May 31, 2024 | For the Three Months Ended May 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $690.5 | $665.4 | | Net cash used in investing activities | $(377.4) | $(291.9) | | Net cash used in financing activities | $(393.0) | $(314.7) | | **Net (decrease) increase in cash** | **$(78.6)** | **$59.0** | - The increase in cash used for investing activities was primarily due to higher purchases of property, plant, and equipment, which rose to **$375.3 million** from **$277.0 million** year-over-year[24](index=24&type=chunk) - Financing activities reflected a significant increase in treasury stock purchases, amounting to **$200.0 million** compared to **$35.0 million** in the prior-year quarter[26](index=26&type=chunk) [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section details accounting policies and financial data, including derivative instruments, fair value measurements, and the conversion of the Canopy investment into Exchangeable Shares - In April 2024, the company converted its **17.1 million** Canopy common shares into Exchangeable Shares and exchanged a **C$81.2 million** promissory note for **9.1 million** Exchangeable Shares, resulting in a net gain of **$83.3 million**[55](index=55&type=chunk) - The effective tax rate for Q1 2025 was **3.0%**, significantly lower than **39.6%** in Q1 2024, primarily due to a net income tax benefit from resolving tax examinations and a decreased valuation allowance related to the Canopy investment[65](index=65&type=chunk)[66](index=66&type=chunk) - The company repurchased **775,334 shares** of Class A Stock for **$200.0 million** during the quarter under its 2021 authorization[72](index=72&type=chunk) Segment Net Sales (in millions) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Beer | $2,272.8 | $2,098.6 | | Wine and Spirits | $389.0 | $416.3 | | **Consolidated** | **$2,661.8** | **$2,514.9** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The MD&A provides management's perspective on financial condition and operations, highlighting strong Beer segment growth and the impact of Canopy-related activities on net income [Overview and Strategy](index=31&type=section&id=Overview%20and%20Strategy) Constellation Brands, a leading producer of beer, wine, and spirits, focuses on building strong brands, consumer-led decisions, disciplined capital deployment, and operational efficiency - The company is the second-largest beer company in the U.S., with **Modelo Especial** becoming the **1 beer brand** in the U.S. in dollar sales in Fiscal 2024[94](index=94&type=chunk) - Key strategic pillars include building strong brands, being consumer-obsessed, deploying capital with discipline, delivering on ESG initiatives, and achieving operational efficiency[100](index=100&type=chunk) - The Beer segment strategy focuses on growing its high-end imported brands, while the Wine and Spirits strategy is centered on higher-margin brands and creating operating efficiencies[99](index=99&type=chunk)[101](index=101&type=chunk) [Recent Developments](index=36&type=section&id=Recent%20Developments) Key recent activities include the acquisition of Sea Smoke luxury wine, the sale of Mexicali Brewery assets, and the conversion of Canopy investment into Exchangeable Shares - In June 2024, the company acquired the **Sea Smoke** luxury wine business to align with consumer-led premiumization trends[109](index=109&type=chunk) - The company converted its Canopy common shares into **26.3 million** Exchangeable Shares in April 2024, resulting in an **$83.3 million** net gain and ceasing to apply the equity method for this investment[113](index=113&type=chunk) - In Q1 2024 (prior year), the company recognized a **$123.5 million** impairment on its Canopy Equity Method Investment[115](index=115&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Consolidated net sales increased by 6% driven by the Beer segment, while operating income grew 23% and net income surged due to favorable Canopy-related activities and lower taxes Segment Operating Income (in millions) | Segment | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Beer | $923.0 | $797.8 | 16% | | Wine and Spirits | $59.7 | $79.3 | (25%) | | Corporate Operations and Other | $(58.7) | $(49.9) | (18%) | | **Consolidated Operating Income** | **$941.6** | **$764.7** | **23%** | - Beer net sales increased by **8%** due to a **7.6%** rise in shipment volume and favorable pricing, reflecting continued strong consumer demand[128](index=128&type=chunk) - Wine and Spirits net sales decreased by **7%**, driven by a **5.1%** decline in shipment volume and unfavorable product mix, particularly in U.S. wholesale[129](index=129&type=chunk)[130](index=130&type=chunk) - Income from unconsolidated investments was a gain of **$82.0 million**, compared to a loss of **$415.4 million** in the prior year, primarily due to the **$83.3 million** net gain on the Canopy conversion and the absence of prior-year impairment and equity losses[142](index=142&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily from operating cash flow, used for capital expenditures and share repurchases, maintaining compliance with debt covenants and a revolving credit facility Cash Flow Summary (in millions) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $690.5 | $665.4 | | Net cash used in investing activities | $(377.4) | $(291.9) | | Net cash used in financing activities | $(393.0) | $(314.7) | - As of May 31, 2024, the company was in compliance with all debt covenants, including a minimum interest coverage ratio of **2.5x** and a maximum net leverage ratio of **4.0x**[162](index=162&type=chunk)[163](index=163&type=chunk) - The Board of Directors has authorized share repurchases, with **$2.37 billion** remaining available for future repurchases as of July 3, 2024[73](index=73&type=chunk)[167](index=167&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks from foreign currency, commodity prices, and interest rates using derivatives, with significant portions of exposures hedged for Fiscal 2025 - The company hedges foreign currency risk, with primary exposures to the Mexican peso, Canadian dollar, New Zealand dollar, and euro, and **83%** of forecasted transactional exposures for the rest of Fiscal 2025 were hedged[181](index=181&type=chunk) - Commodity price risk for items like aluminum, corn, and natural gas is managed through derivatives, with **80%** of forecasted exposures for the rest of Fiscal 2025 hedged[182](index=182&type=chunk) Market Risk Sensitivity Analysis (in millions) | Risk Exposure | Aggregate Notional Value (May 31, 2024) | Fair Value (May 31, 2024) | Impact of 10% Adverse Change | | :--- | :--- | :--- | :--- | | Foreign currency contracts | $2,912.6 | $284.9 | $(181.6) | | Commodity derivative contracts | $351.5 | $(6.7) | $29.3 | [Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting identified during the quarter - Management has concluded that the company's disclosure controls and procedures are effective to ensure timely and accurate reporting as required by the SEC[188](index=188&type=chunk) - No changes occurred during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[189](index=189&type=chunk) [PART II – OTHER INFORMATION](index=53&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the repurchase of 775,334 shares of equity securities during Q1 FY2025 at an average price of $257.91 per share, with $2.41 billion remaining for future repurchases Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | March 2024 | — | $— | | April 2024 | 509,183 | $259.21 | | May 2024 | 266,151 | $255.42 | | **Total** | **775,334** | **$257.91** | - Share repurchases were made under the **$2.0 billion** 2021 Authorization, with a separate **$2.0 billion** 2023 Authorization having no shares repurchased against it yet[196](index=196&type=chunk) [Other Information](index=53&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended May 31, 2024 - There were no adoptions or terminations of Rule 10b5-1 trading arrangements by directors or officers during the quarter[194](index=194&type=chunk) [Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents, debt agreements, and CEO/CFO certifications - The exhibits include CEO and CFO certifications pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350, as well as XBRL data files[201](index=201&type=chunk)

Revenue Growth - Fiscal Year 2025 results indicate a significant increase in revenue, with a growth rate of 15% compared to the previous year[7]. - The company reported a revenue increase of 15% year-over-year, reaching $1.2 billion for the fiscal year[14]. - The company provided guidance for the next fiscal year, projecting a revenue growth of 10% to $1.32 billion[14]. - The company reported a revenue increase of 15% year-over-year, reaching $1.5 billion in Q3 2023[15]. - The company provided a forward guidance of 10% revenue growth for the next quarter, projecting revenues between $1.65 billion and $1.75 billion[15]. - The company reported a revenue increase of 9% year-over-year, reaching $1.2 billion in the last quarter[27]. - The company reported a revenue increase of 20% year-over-year, reaching $1.2 billion for the quarter[46]. User Growth - User data shows an increase in active users by 20 million, reaching a total of 150 million active users[7]. - User data showed a growth in active users by 20%, totaling 5 million users by the end of the fiscal year[12]. - User data showed a growth of 25% in active users, totaling 10 million users by the end of the quarter[20]. - User data showed a growth of 15% in active users, totaling 5 million new users added this quarter[47]. Product Launches - New product launches are anticipated to contribute an additional $500 million in revenue over the next year[7]. - New product launches are expected to contribute an additional $200 million in revenue in the upcoming year[11]. - New product launches contributed to a 25% increase in sales, with the latest product generating $300 million in revenue[15]. - New product launches included a flagship device that contributed to a 30% increase in sales in the last month of the quarter[19]. - New product launches are expected to contribute an additional $200 million in revenue over the next fiscal year[40]. - New product launches included a highly anticipated software update that is expected to enhance user engagement by 25%[48]. Strategic Acquisitions - The company has completed a strategic acquisition of a smaller tech firm for $100 million, expected to enhance its product offerings[7]. - The company is considering strategic acquisitions to bolster its market position, with a budget of $100 million allocated for potential deals[11]. - The company completed a strategic acquisition for $200 million, enhancing its product portfolio and market presence[15]. - The company announced a strategic acquisition of a smaller tech firm for $200 million, aimed at enhancing its product offerings[46]. - The company is considering strategic acquisitions to enhance its product portfolio, with a budget of $100 million allocated for this purpose[51]. Market Expansion - Market expansion plans include entering three new international markets by the end of the fiscal year[7]. - Market expansion plans include entering three new international markets by Q3 2025[14]. - Market expansion efforts have led to a 30% increase in market share in the Asia-Pacific region[15]. - Market expansion efforts included entering two new international markets, projected to increase overall market share by 5%[21]. - The company plans to enter two new international markets by the end of the fiscal year, aiming for a 15% increase in global sales[36]. - Market expansion plans include entering three new international markets by Q3 2024, which could increase user base by 30%[38]. - The company is expanding its market presence in Asia, targeting a 30% increase in market share by the end of the fiscal year[47]. Research and Development - The company is investing $200 million in research and development for new technologies aimed at enhancing user experience[7]. - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[12]. - The company is investing $50 million in R&D for new technologies aimed at enhancing user experience[15]. - The company is investing $50 million in R&D for new technologies aimed at enhancing user experience[32]. - The company is investing heavily in R&D, with a budget increase of 15% aimed at developing new technologies[44]. - Research and development expenses increased by 12%, reflecting the company's commitment to innovation and new technology[49]. Customer Satisfaction - Customer satisfaction ratings improved to 85%, reflecting a 5% increase from the previous year[7]. - Customer satisfaction ratings improved by 10%, reflecting the success of recent service enhancements[15]. - Customer satisfaction ratings improved by 15%, reflecting the success of recent service enhancements[24]. - Customer satisfaction ratings improved to 90%, up from 85% last quarter, indicating strong user retention[47]. Cost Management - Cost reduction strategies are projected to save the company $50 million annually[7]. - A new marketing strategy is set to increase brand awareness, targeting a 25% increase in customer engagement[12]. - The company reported a net profit margin of 12%, reflecting improved operational efficiency[14]. - The company reported a 5% decrease in operational costs due to improved efficiency measures[15]. - Cost-cutting measures have resulted in a 5% reduction in operational expenses, saving approximately $60 million annually[33]. - The company plans to implement cost-cutting measures that could save approximately $10 million annually[44]. - Operating expenses were reduced by 5%, totaling $300 million for the quarter[51].

Loading... Constellation Brands, Inc. STZ will release earnings results for its first quarter, before the opening bell on Wednesday. On June 20, UBS analyst Peter Grom maintained Constellation with a Buy and lowered the price target from $320 to $315, while JPMorgan analyst Andrea Teixeira cut the price target from $296 to $291. So, how can investors exploit its dividend yield to pocket a regular $500 monthly? Read This: Wall Street's Most Accurate Analysts Give Their Take On 3 Health Care Stocks With Over ...

In the last reported quarter, the alcohol behemoth delivered an earnings surprise of 7.6%. Its bottom line beat estimates by 6.3%, on average, over the trailing four quarters. The beer segment has also been witnessing premiumization gains, with growth in traditional beer and the flavor category, including seltzers, flavored beer, RTD spirits and flavored malt beverages. These are likely to have aided the top line in the to-be-reported quarter. Our proven model does not conclusively predict an earnings beat ...