- Constellation Brands posted double-digit sales growth in its beer business as the segment continued to dominate.
- Revenue growth was driven by demand for its Modelo Especial and Modelo Celada brands and Corona Extra.
- The company raised its guidance for fiscal 2024.
In this photo illustration, bottles of Modelo Special beer sit on a table in Los Angeles, California on June 14, 2023.
Mario Tama | Good pictures
Constellation Brands reported revenue and earnings on Thursday that topped analysts’ expectations. Second quarter of fiscal year 2024.
The Mexican beer powerhouse, owner of the Modelo Especial and Corona Extra brands, posted double-digit sales growth in its beer business. Meanwhile, sales of liquor and spirits suffered a setback.
The company raised its fiscal 2024 earnings outlook to $9.60 to $9.80 per share, up from $9.35 to $9.65.
Compared to Wall Street expectations, Constellation reported in the three months ended Aug. 31, based on a survey of analysts at LSEG, formerly Refinitiv:
- Stock Gains: $3.70 adjusted and $3.36 expected
- Revenue: $2.84 billion and $2.82 billion expected
Constellation’s beer portfolio posted 12% sales growth, with exports up 8.7%. The Modelo brand family was a particular bright spot: the Modelo Especial grew by almost 9%, while the Modelo Celata brands posted growth of more than 40%.
Modelo Special is the best-selling brand in the U.S. beer segment, the company said.
However, the company’s wine and spirits brands underperformed year-on-year. This category is down 14% on sales and nearly 8% on markdowns — the industry term for the number of cases sold by a distributor to retailers.
The segment isn’t without its standout brands, however: Constellations’ Miomi and Kim Crawford wine brands saw 7% and 6% off-season growth, respectively, while its craft spirit, Mi Campo tequila, posted more than 60% off-season growth.
“We continue to expect solid growth acceleration and margin improvement from our overall wine and spirits business in the second half,” said CEO Bill Newlands.
In June, the company released an earnings report and reiterated its forecast. In its previous quarter, beer sales grew 11% year-over-year, driven by steady consumer demand and higher prices.