Constellation Brands (STZ) - Get Constellation Brands, Inc. Class A Report posted weaker-than-expected second quarter earnings Wednesday, but topped Street revenue forecasts and boosted its full-year profit outlook as the Corona and Modelo maker sees improving beers volumes over the second half of its financial year.
Constellation Brands said adjusted earnings for the three months ended in August, the group's fiscal second quarter, were pegged at $2.38 per share, down 13.8% from the same period last year and well shy of the Street consensus forecast of $2.77 per share. Group revenues, Constellation said, fell 5% to $2.371 billion, a figure that topped analysts' estimates of a $2.302 billion tally.
Looking into its 2022 fiscal year, which ends in February, Constellation said it sees comparable earnings in the region of $10.15 to $10.45 per share, up 15 cents a share from its prior forecast, with net beer sales rising by between 9% and 11% from 2021, a 2 percentage point boost from its June estimate.
"The strong performance of our core Beer Business, driven by robust consumer demand for our iconic brands, gives us confidence to increase our guidance for the year," said CEO Bill Newlands.
Constellation Brands shares were marked 0.5% lower in mid-day trading following the earnings release to change hands at $212.00 each, a move that would extend the stock's year-to-date decline to around 4%.
The group also affirmed its operating cash flow target of between $2.4 and $2.6 billion, and sees free cash flow in the region of around $1.45 billion.
Constellation will host its earnings call at 10:30 am Eastern time.
Last month, Morgan Stanley analyst Dara Mohsenian said he viewed the group's valuation as attractive, with "sustained high-single-digit beer-revenue growth” in the wake of what she called an "unwarranted pullback recently and ahead of an expected rebound in beer depletion growth, … as lingering production supply issues dissipate."