Constellation Brands STZ-N forecast annual profit above Wall Street expectations on Thursday, banking on resilient demand for its core beer brands despite sticky inflation.
Demand across the company’s beer brands like Modelo Especial and Pacifico remained strong as consumers stretched their budgets even though living expenses persistently rise.
Constellation expects annual comparable earnings per share for 2025 in the range of $13.50 to $13.80, compared with analysts’ average estimates of $13.42 per share.
Quarterly sales of Constellation and peer Molson Coors grew in contrast with Jack Daniel maker Brown-Forman and top brewer Anheuser-Busch InBev, which saw a dip in volumes.
The company’s beer business for the reported December-to-February quarter, saw a 8.9 per cent depletion growth – the rate at which products are sold – compared with a growth of 6 per cent last year.
With the benefits arising from sales growth, price hikes, reduced marketing expenses and cost efficient initiatives, Constellation was able to counter higher packaging and raw material and costs.
The company, which also makes spirits including Mi Campo tequila and wines like The Prisoner, saw the operating margin of its beer business rise by 30 basis points to 34.4 per cent.
However, the company’s quarterly net sales declined 6 per cent in its wines and spirits business as wholesalers across international markets cut back on orders for its high-priced premium brands.
The company posted net sales of $2.14-billion for the fourth-quarter ended Feb. 29, compared with analysts’ average estimate of $2.10-billion, according to LSEG data.
Comparable earnings per share stood at $2.26, beating estimates of $2.08 per share, according to LSEG data.
Shares of the Victor, New York-based company, which expects 2025 enterprise net sales to grow in the range of 6 per cent to 7 per cent, were up about 1 per cent in premarket trading.