Constellation Brands, Inc. (NYSE:STZ) shares are trading higher Tuesday after the company reported better-than-expected second-quarter financial results.
What To Know: Constellation reported second-quarter adjusted earnings per share of $3.63, beating the consensus estimate of $3.38. In addition, the company reported sales of $2.48 billion for the second quarter, beating the consensus estimate of $2.45 billion, according to Benzinga Pro.
Beer-segment net sales grew 7% year-over-year, driven by Modelo Especial, Pacifico and Corona Extra, which remained among the fastest-growing high-end brands in the U.S. marketplace. Operating income for the beer business rose 6%, with operating margin expanding to 38.3%.
Wine and spirits sales declined 4%, reflecting portfolio rationalization efforts, while operating income for that segment slipped 8%. Management said premium brands like Meiomi and The Prisoner Wine Company continued to perform well.
Constellation generated $727 million in operating cash flow and $496 million in free cash flow during the quarter. The company repurchased $240 million of its common stock during the quarter and has now returned $2.2 billion in capital through dividends and buybacks year-to-date.
Management highlighted strong demand trends heading into the key holiday season and reaffirmed its full-year beer sales growth outlook of 7% to 9%. The company affirmed its adjusted earnings per share guidance of $11.30 to $11.60, versus the consensus estimate of $11.49.
Following the company’s earnings report, Morgan Stanley analyst Dara Mohsenian maintained an Equal-Weight rating on Constellation and lowered the price target from $176 to $160.
STZ Price Action: At the time of writing, Constellation shares are trading 1.55% higher at $140.87, according to data from Benzinga Pro.
Image via Shutterstock
