Beer and wine conglomerate Constellation Brands beat estimates on earnings per share and revenue last quarter amid a downturn in sales, but reiterated its lowered full-year guidance.
Comparable earnings per share were US$3.63, down 16% year-over-year but above LSEG estimates of $3.38. Revenue was $2.48 billion, falling 15% and beating estimates of $2.46 billion.
“While we continue to navigate a challenging socioeconomic environment that has dampened consumer demand, our teams remain focused on executing against our strategic objectives, including driving distribution gains, disciplined innovation, and investing behind our brands,” said Constellation CEO Bill Newlands.
“Against that backdrop, we are pleased to continue to lead the U.S. Beer industry in dollar share gains, drive continued outperformance versus the U.S. Wine industry in our Wine and Spirits Business, and consistently deliver against our capital allocation priorities.”
Operating income was $886 million, falling 13% year-over-year.
Constellation’s beer business reported a 7% decline in net sales to $2.35 billion, as well as a 12% drop in operating income and an 8.6% fall in shipments. This was due to economic headwinds depressing consumer demand, the company said, and a lower operating margin due to the U.S.’ aluminium tariffs.
Its Modelo Especial brand maintained its position as the top U.S. beer brand by dollar sales, and Corona remained in the top five.
The company’s wine and spirits business recorded a 65% decrease in net sales amid its divestment from brands like Svedka. Operating income plummeted by 128%, and shipments were down 76.4%.
Constellation’s full-year outlook expects a net sales decline of 4-6%, including a 2-4% drop in its beer sales and a 17-20% decrease in its wine and spirits sales. Comparable operating income is projected to fall by 9-11%.
It said in September that it would cut its full-year earnings per share outlook from $12.60-12.90 to $11.30-11.60, and has reiterated this forecast.
Constellation’s (NYSE: STZ) share price rose to $143.01 in after-hours trading after closing at $138.71. Its market capitalisation is $24.45 billion.
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