Constellation Brands Announces Write-Down in Wine and Spirits Business
(Reuters) – Constellation Brands (NYSE:STZ) will write down the value of its wine and spirits business and take up to a $2.5 billion charge in the current quarter, the Corona beer maker said on Tuesday, following several quarters of weak demand in the U.S.
The company also trimmed its annual enterprise net sales growth to between 4% and 6%, down from 6% to 7% earlier, as retailers reduce stocking wine and spirits and consumers cut back on spending for pricier alcoholic beverages.
Shares of Constellation Brands were unchanged in early trading, with the company expected to report second-quarter results on Oct. 3.
In July, Constellation Brands topped Wall Street estimates for first-quarter profit due to resilient demand for its beers such as Modelo Especial and Pacifico, along with higher pricing.
The company anticipates a goodwill charge of about $1.5 billion to $2.5 billion in the second quarter related to its wine and spirits business.
Constellation Brands lowered its fiscal 2025 reported earnings per share estimates to a range of $3.05 to $7.92, down from $14.63 to $14.93 previously. However, it raised the lower end of its annual adjusted earnings per share by 10 cents to $13.60 while maintaining the upper end at $13.80.
Annual net sales for wine and spirits are expected to decline between 6% and 4%, compared to an earlier forecast of a decline of 0.5% to an increase of 0.5%.
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