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May 31, 2023
Constellation Brands Q1 2024 Earnings Report
Constellation Brands' Q1 2024 results showcased strong beer business growth and resilience in the wine and spirits segment.
Key Takeaways
Constellation Brands reported a mixed Q1 FY24, with strong double-digit net sales growth in the beer business offsetting declines in wine and spirits. The company's beer business was driven by the Modelo brand family, while the wine and spirits business outperformed the higher-end wine category. Overall, the company reaffirmed its fiscal year 2024 EPS and cash flow outlook.
Reported EPS was $0.74, and comparable EPS reached $2.91; excluding Canopy EIE, comparable EPS was $3.04.
Beer Business achieved double-digit net sales growth, spurred by the Modelo brand family's continued success.
Wine and Spirits Business performed strongly in Circana channels, particularly in the higher-end wine category.
Operating cash flow amounted to $665 million, a 12% decrease, while free cash flow was $388 million, a 31% decrease.
Revenue by Segment
Forward Guidance
Constellation Brands provided guidance for fiscal year 2024, including net sales and operating income growth for the beer business, organic net sales and operating income growth for the wine and spirits business, and targets for corporate expense, interest expense, tax rate, weighted average diluted shares outstanding, operating cash flow, capital expenditures, and free cash flow.
Positive Outlook
- Beer: net sales growth of 7 - 9%
- Beer: operating income growth of 5 - 7%
- Wine and Spirits: organic net sales decline of 0.5% to growth of 0.5%
- Wine and Spirits: operating income growth 2 - 4%, excluding $38.5 million of net sales and $19.5 million of gross profit less marketing that are no longer part of the Wine and Spirits Business results
- Free cash flow: $1.2 - $1.3 billion
Challenges Ahead
- Corporate expense: $270 million
- Interest expense: $500 million
- Tax rate: reported approximately 20%; comparable excluding Canopy equity earnings impact approximately 19%
Historical Earnings Impact
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Avg. Return Before/After Earnings
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