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Constellation Brands sells Modelo Especial beer.
Kris Connor/Getty Images for NYCWFF
Constellation Brands’ earnings beat Wall Street expectations as the company reported strong beer sales for the last quarter on Friday. The stock fell anyway.
The company, which sells market-leading Mexican beer Modelo Especial, reported comparable adjusted earnings of $2.91 per share for its fiscal first quarter, which ended in May. This included losses from its cannabis business,
canopy growth
.
The consensus call among analysts tracked by FactSet was that earnings would be $2.83 per share.
Constellation Brands (STZ) said beer sales rose 11% to $2.1 billion from a year earlier due to a 7.5% increase in shipments as Modelo Especial became the #1 brand in the beer category in the United States. It replaced Anheuser-Busch’s Bud Light, which suffered a backlash after the brand teamed up with transgender social media influencer Dylan Mulvaney.
Beer sales were the highest since the quarter that ended in August 2022.
Still, growth in sell-outs, or beer deliveries to retailers by distributors, was a little weaker than expected at 5.5% compared to the 5.6% expected by analysts.
Constellation shares fell 1.6% in premarket trading Thursday to $242.90. At the start of Thursday’s session, the stock had gained 6.5% this year.
RBC analyst Nik Modi reiterated an outperformance call on the stock. “We believe the underlying thesis remains on track,” despite a slight shortfall against the company’s expectations for shipment growth, Modi wrote in a research note. RBC had estimated that shipments increased by 6%.
Constellation expects full-year 2024 earnings of between $11.70 and $12 per share, excluding Canopy’s contribution, which is in line with management’s previous guidance and slightly higher than the $11.67 per share estimate. by analysts.
Write to Karishma Vanjani at karishma.vanjani@dowjones.com