Spirit giant Constellation Brands, Inc. (NYSE: STZ) is preparing to report third-quarter earnings on Thursday, January 9, in the morning. The company’s sales performance was mixed in 2024, with weakness in the Wine & Spirits business nearly offsetting strong beer sales.
The stock is yet to fully recover from the weakness experienced after Constellation reported second-quarter results in early October, with the downturn deepening in recent weeks. The shares are trading well below their 52-week average price of $248.97, after losing about 10% in less than a month. The company’s mixed sales performance will likely weigh on the stock’s performance in the near future, but its long-term prospects look bright.
Q3 Report on Tap
When the New York-based brewer reports its third-quarter results on January 9, before the opening bell, the market will be looking for an adjusted profit of $3.32 per share, up 4% from the year-ago quarter. It is estimated that Q3 sales grew about 3% year-over-year to $2.54 billion.
In the second quarter, sales increased about 3% from last year to $2.91 billion, with comparable sales growing 3%. Comparable earnings, adjusted for special items, rose 14% annually to $4.32 per share in the August quarter. On a reported basis, the company incurred a loss of $1.19 billion or $6.59 per share, which marked a deterioration from the prior-year quarter when it earned $690 million or $3.74 per share. The top line and earnings beat estimates, continuing the recent trend.
Mixed View
While the strong demand for the company’s beer brands keeps driving sales growth, changing consumer preferences and rising input costs remain a challenge. Meanwhile, effective capital allocation with a focus on share buybacks and dividend growth bodes well for shareholders.
From Constellation Brands’ Q2 2025 earnings call:
“We are focused on managing the levers that we can control and continue to advance our cost savings and efficiency initiatives that allow us to accelerate incremental marketing investments toward our beer business to drive top-line growth. We remain confident in our overall growth profile, which again continues to outperform our sector and industry as we pursue further incremental points of distribution in the U.S. and push forward with our focused and disciplined innovation agenda while building on the broader demographic tailwinds from our loyal Hispanic consumers.”
Guidance
After reporting positive Q2 results, the Constellation leadership said it expected net sales to grow between 4% and 6% in fiscal 2025. On a reported basis, full-year earnings per share is estimated to be $4.05-4.25. The forecast for adjusted earnings is $13.60-13.80 per share for FY25.
Constellation Brands’ stock has declined about 14% in the past six months. On Tuesday, the shares traded slightly above $220, maintaining a modest uptrend.