Constellation Brands Fiscal 2025 Update

Constellation Brands (NYSE:STZ) revised its fiscal 2025 forecast for comparable earnings per share (EPS) on Tuesday. Initially, the company’s shares fell in premarket trading but recovered post-opening.

EPS Forecast

The new full-year EPS expectation is between $13.60 and $13.80, up from the previous estimate of $13.50 to $13.80 and above analysts’ estimate of $13.68.

Net Sales Growth

STZ has adjusted its net sales growth outlook, now anticipating an increase of 4% to 6%, a reduction from the earlier 6% to 7% projection.

Operating Cash Flow

Operating cash flow expectations remain unchanged, still forecasting between $2.8 billion and $3.0 billion, with the consensus estimate at $2.98 billion.

Goodwill Impairment

The company will recognize a non-cash goodwill impairment loss for its Wine and Spirits business, estimated between $1.5 billion and $2.5 billion, to be included in the Q2 fiscal 2025 results. This impairment affects the fiscal 2025 EPS outlook.

Quote from the Company:
“In our Wine and Spirits Business, we are also taking incremental tactical pricing and marketing actions to support demand for our core brands but are facing operating deleveraging due to more significant top-line headwinds, which in turn we expect will also lead to an impairment charge of the goodwill associated with that Business.”

Despite these challenges, Constellation Brands expressed confidence in delivering double-digit comparable EPS growth and raised the lower-end of the EPS guidance range for fiscal 2025.

Stock Performance

Constellation Brands’ shares have remained relatively flat in 2024, losing less than 0.1% year-to-date.