2023-06-30 09:02:32 ET
Constellation Brands' ( NYSE: STZ ) beer business posted a sales increase of 11%, driven by an uplift in shipments of 7.5%. Strong growth was cited for the ModeloEspecial, Modelo Chelada, Corona Extra, and Pacifico brands. The launch of Modelo Oro was also called a success. Depletion volume grew 5.5%, with selling days flat year-over-year. Looking ahead, the beer business continues to expect sales growth of 7% to 9% and operating income growth of 5% to 7%.
Operating margin fell 220 basis points in FQ1 from the same quarter a year ago. Benefits from sales growth and cost efficiency initiatives were more than offset by higher raw material costs and higher marketing spending.
Constellation Brands ( STZ ) said it plans to invest in the next increment of capacity in Mexico to support the growth of the high-end Mexican beer portfolio.
On the guidance front, Constellation Brands ( STZ ) said it expects FY24 EPS of $11.70 to $12.00 vs. $11.66 consensus and anticipates operating cash flow of $2.4B to $2.6B vs. $2.8B consensus.
Shares of Constellation Brands ( STZ ) fell 2.53% in premarket trading to $240.60. Citi analyst Filippo Falorni said the beer depletions number was light in comparison to buy side expectations in explaining the initial share price drop. The beverage sector stock is up 8.46% on a year-to-date basis and is above the 100-day and 200-day moving averages.
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Constellation Brands trades lower despite double earnings beat