Constellation Brands (STZ) tops expectations on strong beer business

Shares of Constellation Brands (NYSE: STZ) are up around 0.8% premarket Wednesday after the company reported its latest quarterly earnings.

Fourth-quarter net sales were $2.14 billion, up 7% year over year, and earnings per share were $2.26, up 14% YoY. Both metrics beat analyst consensus estimates.

The company said its beer business delivered strong sales during 2024, with operating income growth of over 9% and 8%, respectively. This was primarily driven by the 14th consecutive year of volume growth and record share gains from continued strong demand for its high-end brands.

STZ's CEO, Bill Newlands, stated: "We delivered another year of solid performance in Fiscal 24. Our Beer Business continued its strong growth momentum as it achieved its 56th consecutive quarter of volume growth while maintaining best-in-class margins. These results were driven by sustained growth of our industry-leading beer brands that continue to gain share."

Reacting to the results, analysts at RBC Capital said that this morning's print only reaffirms their long-term bullishness in STZ and its ability to drive consistent CPG-leading volume growth.

"STZ delivered better-than-expected beer depletions of 8.9% despite weather impacts (supported by extra day but still strong), exceeding channel checks, guidance and mgmt.'s expected scanner delta," wrote the bank. "This reaffirms the strength of beer fundamentals."

They added: "For FY'25, STZ guided consistent with it medium-term algorithm, which should have been largely expected and reflects the strength and momentum of the beer business with more muted W&S. We believe STZ typically guides conservatively, and this leaves room for STZ to over deliver as the year progresses."

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