Revenue and earnings
The company lowered its guidance for FY2024 reported EPS to $9.35-9.65 from the previous range of $11.60-11.90. It reaffirmed its outlook for comparable EPS of $11.70-12.00.
Beer business
In Q1 2024, Constellation recorded an 11% year-over-year growth in net sales, helped by a 7.5% growth in shipments, driven by strength across brands such as Modelo Especial, Modelo Chelada, Corona Extra and Pacifico. Depletion growth was 5.5% helped by strong demand for high-end Mexican beer brands.
For FY2024, the company expects net sales for its beer segment to grow 7-9% and operating income to grow 5-7% compared to the previous year.
Wines and spirits
Constellation has been revamping its wines and spirits portfolio to focus more on higher-end brands, and as part of these efforts, it divested some of its mainstream wine brands. In Q1, the company saw strength across its premium and fine wine brands with gains in Meiomi, Kim Crawford, and The Prisoner Wine Company.
Net sales for this segment fell 10% in Q1, with shipments down 13% and depletions down 6.3%. Organic net sales dropped 6%. For FY2024, Constellation expects organic net sales for the wines and spirits division to be down 0.5% to up 0.5%. Operating income is expected to grow 2-4%.
Constellation expects the wines and spirits division to pick up pace through the remainder of the fiscal year helped by growth in higher-end brands, growth in the direct-to-consumer channels, a return to growth in international markets, and lower marketing spend.