Constellation Brands stock falls as FY27 guidance disappoints

Investing.com -- Constellation Brands Inc (NYSE: STZ) reported second quarter results that exceeded analyst expectations, but shares fell 2.7% as the company’s full-year earnings guidance came in below Wall Street estimates.

The beer and spirits maker posted adjusted earnings per share of $3.74 for the second quarter, beating the analyst consensus of $3.61. Revenue reached $2.63 billion, up 6% YoY and ahead of the $2.54 billion estimate. However, the company maintained its fiscal 2027 adjusted EPS outlook of $11.20-$11.90, with a midpoint of $11.55 that falls short of the $11.72 analyst consensus.

The Beer Business drove results with net sales growth of 5% to $2.47 billion, supported by a 5.5% increase in shipment volumes. The division ranked as the top dollar and volume share gainer in Circana U.S. tracked channels, with Modelo Especial maintaining its position as the number one brand by dollar sales. Operating income for the beer segment rose 1% to $964.2 million, though operating margin decreased 160 basis points to 39.0% due to increased marketing investment.

"During the second quarter, our portfolio of iconic brands continued to resonate with consumers," said Nicholas Fink, President and CEO. "We have sharpened our execution and increased investment across the business, and are beginning to see early returns through accelerating dollar and volume share gains in both our Beer and Wine & Spirits businesses."

The Wine and Spirits Business delivered net sales growth of 17% to $159.4 million and depletions growth of 10.2%, with the wine portfolio ranking as the third-largest dollar share gainer in the total wine category.

For fiscal 2027, Constellation expects organic net sales growth of negative 1% to positive 1% and operating cash flow of $2.4-$2.5 billion.

Original Article

You May Also Be Interested In

• Tesla stock up as automotive gross margin improves, free cash flow turns positive
• John Malone says SpaceX may invest up to $10b in Skydance
• Six Flags drops as Mizuho warns of balance sheet strains and cash flow deficits