Constellation Brands Earnings Buoyed by Strong Beer Sales

Companies and Brands

Published: March 29, 2018 10:00 am

Last Updated: January 12, 2020 1:56 am

Constellation Brands Inc. (NYSE: STZ) reported its most recent quarterly results before the markets opened on Thursday. The company posted $1.90 in earnings per share (EPS) on $1.94 billion in revenue, while consensus estimates from Thomson Reuters had called for $1.74 in EPS on revenue of $1.75 billion. The fiscal fourth quarter of last year reportedly had EPS of $1.48 and $1.63 billion in revenue.

Fiscal 2018 reported-basis results reflect a benefit of $363 million, or $1.81 EPS, for a net adjustment to deferred and long-term tax liabilities related to recently enacted U.S. tax reform.

Over the past year, Constellation’s Beer portfolio was the number one growth contributor to the U.S. beer market, with all import brand families achieving record volume levels.

During this quarter specifically, strong portfolio depletion performance was driven by the Modelo and Corona brand families, up 18% and 6%, respectively.

Looking ahead to the fiscal 2019 full year, the company expects to see EPS in the range of $9.40 to $9.70. The consensus estimates call for $9.58 in EPS on $8.13 billion in revenue for the year.

For 2018, the company generated record operating cash flow of more than $1.9 billion and $874 million of free cash flow. On the books, cash and cash equivalents totaled $90.3 million at the end of the quarter, compared with $177.4 million at the end of the previous fiscal year.

Rob Sands, CEO of Constellation Brands, commented:

Execution of our Total Beverage Alcohol premiumization strategy for fiscal 2018 produced best-in-class EPS growth of almost 30% as we continued to grow overall market share and improve margins across the business. We also completed significant operational expansion milestones at our Nava brewery and glass plant. We expect to capitalize on this momentum, as we are targeting impressive sales and earnings growth for the coming year.

Shares of Constellation Brands were last seen up nearly 3% at $226.88, with a consensus analyst price target of $251.00 and a 52-week trading range of $160.53 to $231.83.