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Aug 31, 2023
Constellation Brands Q2 2024 Earnings Report
Constellation Brands' Q2 2024 earnings reflected double-digit net sales and operating income growth in the beer business, with Modelo Especial solidifying its position as the leading beer in the U.S. The wine and spirits business showed strong relative performance, driven by higher-end wine brands.
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.
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
Historical Earnings Impact
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Avg. Return Before/After Earnings
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