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An earlier version of this report had the wrong fiscal 2024 EPS comparison. It has been corrected.
Constellation Brands Inc. posted better-than-expected earnings for its fiscal second quarter, but the stock still fell in early trade.
The company
STZ,
posted net income of $690.0 million, or $3.74 a share, for the quarter to Aug. 31, after a loss of $1.15 billion, or $6.30 a share, in the year-earlier quarter. The company’s adjusted EPS came to $3.70, well ahead of the $3.37 FactSet consensus.
Sales rose to $2.837 billion from $2.655 billion a year ago, also ahead of the $2.824 billion FactSet consensus.
The company’s beer business posted a 12% increase in sales, driven by an 8.7% increase in shipments. Depletion volume, a metric that measures the number of cases sold by distributors to retailers, rose 7.9%, after rising 5.5% in the first quarter.
Modelo Especial’s sales rose nearly 9%, and remained the top-selling brand in the U.S. beer segment, measured by dollar sales.
Modelo Especial replaced Anheuser-Busch’s
BUD,
Bud Light as the bestselling beer in the U.S. earlier this year, partly due to the backlash against Bud Light that began in April in response to its partnership with trans influencer Dylan Mulvaney.
See now: Anheuser-Busch InBev share price skids as Bud Light and other Budweiser brand sales deteriorate
In the wine business, Constellation’s Meiomi and Kim Crawford brands saw sales rise 7%, while depletions rose 6%.
The company is now expecting fiscal 2024 EPS of $9.60 to $9.80 and adjusted EPS of $12.00 to $12.20, compared with an $11.72 FactSet consensus.
Beer sales are expected to grow 8% to 9%, while wine and spirits are expected to range from down 0.5% to up 0.5%.
The company’s share of losses from its troubled Canadian cannabis company Canopy Growth Corp.
CGC,
WEED,
came to $12 million, down from $650.7 million a year ago.
The stock has gained 8% in the year to date, while the S&P 500
SPX,
has gained 11%.
