Categories Analysis, Consumer

Constellation Brands (STZ) set to report Q3 2024 earnings. Here’s what to expect

While the core beer segment performed well in recent quarters, the wine business experienced a slowdown

Constellation Brands, Inc. (NYSE: STZ) will be reporting third-quarter 2024 results on Friday, amid expectations for sales and earnings growth. The beer maker is currently busy revamping its portfolio with focus on including more higher-end beer and wine brands, in line with the growing demand for premium products.

Constellation’s stock has been trading sideways for about three months, after withdrawing from the July peak. Over the years, STZ has maintained a strong uptrend, which is likely to continue in the foreseeable future. Analysts are bullish on the stock’s prospects and recommend buying it.

Q3 Report on Tap

The company will be reporting third-quarter 2024 results on January 5, at 7:30 a.m. ET. The consensus earnings estimate is $3.00 per share, which represents a 6% year-over-year increase. Sales are expected to be $2.54 billion in Q3, compared to $2.44 billion last year.

Constellation Brands ended the latest quarter with an impressive free cash flow of $1 billion, which will enable the company to deliver on its capital spending plan including the expansion of modular brewery capacity. Recently, the management said it is making significant progress against its operating and financial plans.

In the second quarter, comparable earnings, adjusted for one-off items, increased to $3.70 per share from $3.17 per share last year. Earnings beat estimates for the third consecutive quarter. On a reported basis, the company posted earnings of $3.74 per share, which marked an improvement from the prior year period when it incurred a loss of $6.30 per share.

Mixed Sales

The upswing reflects a 7% annual growth in net sales to $2.84 billion, aided by a double-digit sales growth in the core beer business. Beer shipments during the three months were the strongest in recent years, while the wine business continued to experience weakness. The top line also exceeded Wall Street’s estimates.  

From Constellation Brands’ Q2 2024 earnings call:

“Beyond fiscal ’24, we continue to see significant opportunities to maintain the growth momentum of our beer business, particularly due to the resilience of key secular trends in the consumer landscape like ongoing consumer-led premiumization across beverage alcohol and the continued outsized growth of the Hispanic population in the U.S., as well as the relentless focus of our beer business on closing the distribution and awareness gaps that still exist across our brands, and on developing and scaling new and exciting products aligned with consumer-led trends.”

Shares of Constellation Brands have gained about 13% since last year. They traded lower during Wednesday’s regular session.

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