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Constellation Brands stock rallies after beating Q4 expectations

Updated: Dec 3, 2023

I'm sitting with a Corona Beer in hands, and feel proud of what I drink! - Alex Artenie
Constellation Brands stock rallies after beating Q4 expectations
Constellation Brands. Picture from

Constellation Brands shares jumped to a nearly three-month high on Thursday morning after the New York-based beer and wine producer reported its fiscal fourth-quarter earnings and revenue above the consensus estimates.

The company reported a profit of $1.91 per share for the three months ended February 28, 2022, compared to $1.80 per share in the same period last year. On an adjusted basis, Constellation Brands earned $2.37 per share, representing a decent surge from $1.82 per share in the linked quarter of 2021.

Constellation Brands Earnings report
Constellation Brands Earnings report. Source: SeekingAlpha

Sales also increased 8 percent on a year-over-year basis to $2.1 billion. The results easily outperformed analysts’ average estimate of $2.09 per share for profit and $2.02 billion for sales.

Constellation Brands Earnings Surprise
Constellation Brands Earnings Surprise. Source: SeekingAlpha

Now let’s look at some of the important growth drivers. Constellation Brands Inc. (STZ) reported that its operating margin in the quarter jumped 240 basis points to 39.2 percent due to lower costs and favorable pricing.

In addition, the company said that it returned $2 billion to shareholders in stock repurchases and dividends during the last fiscal year.

Constellation Brands also released the profit outlook for its fiscal year 2023. It is anticipating an adjusted profit in the range of $11.20 per share to $11.50 per share for the full year, compared to analysts’ average estimate of $11.27 per share.

Expansion of Beer Business

Constellation Brands is looking forward to increasing its beer production capacity in Mexico. The company plans to spend capital in the range of $5 to $5.5 billion over the next three years to add a surplus of 25 to 30 million hectoliters in total capacity.

The investment plans also include building a new brewery in Veracruz state, besides expanding existing sites in the country.


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