Constellation Brands Reports Mixed Q2 Results; Lifts FY22 Comparable EPS Outlook

Constellation Brands Inc STZ reported second-quarter FY22 sales growth of 5% year-on-year, to $2.37 billion, beating the analyst consensus of $2.30 billion.
Beer net sales rose 14% Y/Y to $1.86 billion and posted depletion volume growth of over 7%, driven by the continued strength of Modelo Especial and Corona Extra.
Gross profit increased 1.1% Y/Y to $1.2 billion, and the margin for the quarter contracted 190 basis points to 51.8%.
The operating margin was 31.2%, and operating income for the quarter fell 12% to $739.2 million.
The company held $103.4 million in cash and equivalents as of August 31, 2021. Operating cash flow for the six months totaled $1.5 billion, and free cash flow amounted to $1.2 billion.
Non-GAAP EPS of $2.38 missed the analyst consensus of $2.77.
Constellation’s board declared a quarterly cash dividend of $0.76 per share of Class A Common Stock and $0.69 per share of Class B Common Stock, payable on November 19, to stockholders of record on November 5.
Outlook: Constellation sees FY22 comparable EPS of $10.15 - $10.45 (prior outlook $10.00 - $10.30) versus the consensus of $10.03.
Price action: STZ shares are trading lower by 0.03% at $213 in premarket on the last check Wednesday.

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