Beverage Alcohol Company Constellation Brands' Q2: Earnings Beat, 8.7% Beer Shipments Growth & More

Constellation Brands Inc STZ, an international producer and marketer of beer, wine, and spirits, reported second-quarter FY24 net sales growth of 7% year-on-year to $2.84 billion, beating the analyst consensus estimate of $2.82 billion.

Net sales for the Beer segment increased 12% Y/Y to $2.392 billion, and Wine and Spirits declined 14% Y/Y to $444.1 million.

Shipment volume for Beer climbed 8.7%, while Wine and Spirits plunged 17.6%.

Gross profit increased 9.4% to $1.44 billion, and the operating income rose 20.3% to $978.7 million.

Comparable EPS of $3.70 beat the consensus estimate of $3.36.

The company generated an operating cash flow of $1.6 billion for the six months and a free cash flow of $1 billion.

Constellation Brands ended the quarter with $83.3 million in cash and equivalents. 

Constellation's board declared a quarterly cash dividend of $0.89 per share, payable on November 17, 2023, to stockholders of record on November 3, 2023.

"The record top-line and operating income performance of our Beer Business has enabled us to keep delivering on our capital allocation priorities, as we continue to move closer to our net leverage ratio target while returning cash to shareholders in-line with our dividend payout ratio target and advancing our modular brewery capacity expansions," said CFO Garth Hankinson.

"We continue to make good progress against our operating and financial plans for Fiscal24, and our interest expense management actions have enabled us to raise our earnings per share outlook."

Guidance: Constellation raised FY24 Comparable EPS outlook from $11.70 - $12 to $12 - $12.20 versus an estimate of $11.70.

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 0.75% at $247.50 in premarket the last check Thursday.