Constellation Brands exceeds earnings expectations as Modelo-fueled beer momentum persists. Constellation Brands reported earnings and revenue for its fiscal second quarter of 2024 that exceeded analyst expectations on Thursday.
The Mexican beer giant, proprietor of the Modelo Especial and Corona Extra brands, reported double-digit sales growth in its beer division, which continues to dominate the overall beer and premium beer categories. Meanwhile, wine and liquor sales slowed.
The company raised its earnings per share forecast for fiscal 2024 to $9.60 to $9.80, up from a previous range of $9.35 to $9.65.
Based on a survey of analysts by LSEG, formerly Refinitiv, here is what Constellation reported for the three months ending on August 31, compared to what Wall Street anticipated:
Earnings per share: $3.70 versus $3.36 anticipated
Revenue: $2.84 billion, compared to $2.82 billion anticipated
The beer portfolio of Constellation posted a 12 percent increase in sales, aided by an 8.7 percent increase in shipments. The family of Modelo brands was a particular bright spot: Modelo Especial grew by nearly 9%, while Modelo Chelada gained by more than 40%.
According to the corporation, Modelo Especial remains the best-selling beer brand in the United States.
However, the company’s wine and liquor brands performed poorly year over year. The category experienced a 14% decline in sales and an almost 8% decline in depletions, the number of cases sold to retailers by a distributor.
However, the division was not devoid of notable brands: Constellation’s Meiomi, and Kim Crawford wine brands experienced 7% and 6% depletion growth, respectively, while Mi Campo Tequila reported more than 60% depletion growth.
Bill Newlands, the company’s chief executive officer, stated, “We continue to anticipate robust growth acceleration and margin expansion from our Wine and Spirits Business in the second half.”
In June, the company exceeded earnings expectations and reaffirmed its outlook. The previous quarter’s beer sales increased 11% year-over-year due to sustained consumer demand and price increases.