Constellation Brands Q2 2024 Earnings Report
Key Takeaways
Constellation Brands reported a strong second quarter in fiscal year 2024, driven by the Beer Business. The company achieved reported EPS of $3.74 and comparable EPS of $3.70. The Beer Business experienced double-digit growth in net sales and operating income, while the Wine and Spirits Business delivered strong relative performance.
Achieved reported EPS of $3.74 and comparable EPS of $3.70; excluding Canopy EIE, generated comparable EPS of $3.80.
Beer Business achieved strong net sales and operating income each posting double-digit increases and a high-single digit depletion growth primarily driven by continued momentum of the Modelo brand family.
Wine and Spirits Business delivers strong relative performance, driven by our largest higher-end Wine brands, including Meiomi and Kim Crawford outpacing their corresponding category segment, in Circana channels.
Generates $1.6 billion of operating cash flow, a decrease of 2%, and $1.0 billion of free cash flow, a decrease of 15% driven by brewery capacity investments.
Constellation Brands
Constellation Brands
Constellation Brands Revenue by Segment
Forward Guidance
Constellation Brands provided the following guidance for fiscal year 2024: Beer net sales growth of 8-9%, operating income growth of 6-7%; Wine and Spirits organic net sales decline of 0.5% to growth of 0.5%, operating income growth of 2-4%; Corporate expense of $270 million; Interest expense of $460 million.
Positive Outlook
- Beer: net sales growth of 8 - 9%
- Beer: operating income growth of 6 - 7%
- Wine and Spirits: organic net sales decline of 0.5% to growth of 0.5%
- Wine and Spirits: operating income growth of 2 - 4%
- Operating cash flow: $2.4 - $2.6 billion
Challenges Ahead
- Corporate expense: $270 million
- Interest expense: $460 million
- Tax rate: reported approximately 20%
- Weighted average diluted shares outstanding: approximately 184 million
- Capital expenditures: $1.2 - $1.3 billion, including approximately $1 billion targeted for Mexico beer operations activities