Constellation Brands Inc (STZ, Financial) has released its Q2 FY 2024 earnings report, showcasing a strong performance driven by its Beer Business. The company reported net sales of $2,837 million, marking a 7% increase year-over-year (YoY). Operating income for the quarter stood at $979 million, indicating a 20% increase YoY. The company's Beer Business posted a 12% net sales increase, driven by an uplift in shipments of 8.7%.
Financial Highlights
The company's reported earnings per share (EPS) for the quarter was $3.74. The Beer Business achieved strong net sales and operating income, each posting double-digit increases. The Wine and Spirits Business also delivered strong relative performance, driven by higher-end Wine brands, including Meiomi and Kim Crawford. The company generated $1.6 billion of operating cash flow, a decrease of 2%, and $1.0 billion of free cash flow, a decrease of 15% driven by brewery capacity investments.
Outlook
Constellation Brands Inc (STZ, Financial) has raised its fiscal 2024 reported EPS outlook to $9.60 - $9.80 and comparable EPS outlook to $12.00 - $12.20. The company affirms its fiscal 2024 operating cash flow target of $2.4 - $2.6 billion and free cash flow projection of $1.2 - $1.3 billion.
Commentary
Our Beer Business this quarter delivered double-digit net sales and operating income growth. Modelo Especial continued to outperform the market as the top share gainer and solidified its position as the #1 Beer in U.S. tracked channels. Meanwhile, our higher-end wine brands, Meiomi and Kim Crawford outperformed their corresponding segment in tracked channels and we continue to expect solid growth acceleration and margin improvement from our overall Wine and Spirits Business in the second half."- Bill Newlands, President and Chief Executive Officer
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. We continue to make good progress against our operating and financial plans for Fiscal 24, and our interest expense management actions have enabled us to raise our earnings per share outlook."- Garth Hankinson, Chief Financial Officer
Dividend Announcement
On October 4, 2023, Constellation’s board of directors declared a quarterly cash dividend of $0.89 per share of Class A Common Stock payable on November 17, 2023, to stockholders of record as of the close of business on November 3, 2023.
