By Constellation Brands (ticker: STZ) exceeded Wall Street estimates with its second-quarter profit and revenue, primarily driven by the success of its Modelo brand. Despite this positive news, the company’s wines and spirits sales experienced a decline, leading to a slight decrease in its stock value.
Quarterly Performance Overview
In the fiscal second quarter, Constellation Brands reported adjusted earnings of $3.70 per share on sales of $2.84 billion. Analysts surveyed by FactSet had projected earnings of $3.37 per share on revenue of $2.82 billion. The company’s beer sales, specifically its Modelo brand, saw an impressive 12% increase compared to the previous year.
According to Chief Executive Bill Newlands, “Modelo Especial continued to outperform the market as the top share gainer and solidified its position as the No. 1 beer in U.S. tracked channels.” However, sales of wines and spirits fell by 14% in the second quarter, amounting to $444.1 million and resulting in a 2.4% decrease in shares on Thursday.
Revised Earnings Outlook
Despite the dip in wine and spirits sales, Constellation Brands remains optimistic about its future earnings. The company raised its adjusted earnings outlook for fiscal 2024, now expecting a profit ranging from $12 to $12.20 per share. This outlook surpasses previous estimates of $11.70 to $12 per share. Analysts surveyed by FactSet had expected adjusted earnings of $11.72 per share.
Market Response
Following the announcement, Constellation Brands’ stock experienced a slight decline of 2.3%, reaching $243.69 at 10:28 a.m.
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