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Aug 31, 2024
Constellation Brands Q2 2025 Earnings Report
Constellation Brands' Q2 2025 performance was marked by solid beer business growth and strategic capital allocation.
Key Takeaways
Constellation Brands reported a mixed Q2 2025, with strong performance in the beer business offsetting challenges in wine and spirits. The company achieved its net leverage ratio target and returned ~$250 million to shareholders through share repurchases. Overall sales increased by 3%, driven by beer, while the company faced a net loss due to a goodwill impairment in the wine and spirits segment.
Generated reported EPS of $(6.59), inclusive of non-cash goodwill impairment loss for the Wine and Spirits business of $2.25 billion, and comparable EPS of $4.32.
Beer Business dollar sales growth outperformed total beverage industry and combined beverage alcohol categories in Circana tracked channels; disciplined operational efficiency and cost management initiatives enabled incremental marketing investments launched in Q3 of fiscal 2025.
Wine and Spirits Business continues to advance commercial and operational actions expected to drive sequential net sales and operating income improvements in Q3 and Q4 fiscal 2025.
Generated year-to-date operating cash flow of $1.9 billion, a 15% increase, and free cash flow of $1.2 billion, a 12% increase.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Constellation Brands provided guidance for fiscal year 2025, anticipating net sales growth of 4-6% and comparable operating income growth of 8-9%. The company expects reported EPS to be $4.05 - $4.25 and comparable EPS to be $13.60 - $13.80.
Positive Outlook
- Net sales growth of 4 - 6% for the enterprise.
- Beer net sales growth of 6 - 8%.
- Comparable operating income growth of 8 - 9% for the enterprise.
- Operating cash flow target of $2.8 - $3.0 billion.
- Free cash flow projection of $1.4 - $1.5 billion.
Challenges Ahead
- Wine and Spirits net sales decline of 4 - 6%.
- Wine and Spirits operating income decline of 16 - 18%.
- Reported operating income decline of (63)% - (62)%.
- Corporate expense of $260 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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