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Nov 30, 2023
Constellation Brands Q3 2024 Earnings Report
Constellation Brands delivered strong enterprise results and raised operating and free cash flow guidance for fiscal 2024.
Key Takeaways
Constellation Brands reported a net sales increase of 1% and a comparable EPS of $3.19, driven by the strong performance of its Beer Business, particularly the Modelo brand family. The company has raised its fiscal year 2024 operating cash flow target to $2.6 - $2.8 billion and free cash flow projection to $1.4 - $1.5 billion.
Generated reported EPS of $2.76 and comparable EPS of $3.19; excluding Canopy EIE, achieved comparable EPS of $3.24.
Beer Business achieved strong high single-digit depletion growth and solid net sales growth primarily driven by continued momentum of the Modelo brand family.
Wine and Spirits Business updates fiscal 2024 outlook to organic net sales decline of 7 - 9% and operating income decline of 6 - 8%; company separately announced Wine and Spirits Business leadership transition.
Raised fiscal 2024 operating cash flow target to $2.6 - $2.8 billion and free cash flow projection to $1.4 - $1.5 billion from $2.4 - $2.6 billion and $1.2 - $1.3 billion, respectively.
Revenue by Segment
Forward Guidance
Constellation Brands provided guidance for fiscal year 2024, including net sales growth and operating income growth for the Beer Business, and organic net sales decline and operating income decline for the Wine and Spirits Business. The company also provided guidance 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 8 - 9%
- Beer: operating income growth of 7 - 8%
- Operating cash flow: $2.6 - $2.8 billion
- Free cash flow: $1.4 - $1.5 billion
- Tax rate: comparable excluding Canopy equity earnings impact approximately 19%
Challenges Ahead
- Wine and Spirits: organic net sales decline of 7 - 9%
- Wine and Spirits: operating income decline of 6 - 8%, excluding $38.5 million of net sales and $19.5 million of gross profit less marketing that are no longer part of results
- Corporate expense: $260 - $270 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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