Constellation Brands Updates Fiscal 2025 Outlook

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]