Constellation Brands Q1: Earnings Beat, 11% Sales Growth In Beer Business & More

Constellation Brands, Inc STZ reported first-quarter FY24 net sales growth of 6.4% year-on-year to $2.51 billion, beating the analyst consensus of $2.47 billion.

Net sales for the Beer segment increased 11% Y/Y to $2.098 billion, and Wine and Spirits declined 10% Y/Y to $416.3 million.

Shipment volume for Beer climbed 7.5%, while Wine and Spirits plunged 13.2%.

Gross profit was flat at $1.25 billion, and the operating income declined 6% to $764.7 million.

Comparable EPS of $2.91 beat the consensus of $2.83. Comparable EPS, excluding Canopy equity losses, was $3.04.

The company generated an operating cash flow of $665 million for the quarter and a free cash flow of $388 million.

Constellation Brands ended the quarter with $192.5 million in cash and equivalents. 

Constellation's board declared a quarterly cash dividend of $0.89 per share, payable on August 24, 2023, to stockholders of record on August 10, 2023.

"The solid top-line performance of our Beer Business has reaffirmed our confidence in our annual plans and objectives, and we expect our Wine and Spirits Business to accelerate toward its Fiscal '24 outlook throughout the balance of the year," said CFO Garth Hankinson.

"We are also now closer to our net leverage ratio goal while continuing to return cash to shareholders in-line with our dividend payout ratio target and advancing our modular brewery capacity expansions per capital allocation priorities."

Guidance: Constellation affirmed the FY24 outlook for comparable basis EPS, excluding Canopy, of $11.70 - $12.00, above the consensus of $11.62.

STZ affirmed its FY24 operating cash flow forecast of $2.4 billion - $2.6 billion and free cash flow of $1.2 billion - $1.3 billion.

Price Action: STZ shares are trading lower by 2.28% at $241.23 in premarket the last check Friday.