Constellation Brands shares slip as the company’s first quarter earnings report beat estimates, but higher costs dinged margins. Yahoo Finance Live breaks down the report.
Video Transcript
– We also are watching shares of Constellation Brands this morning. Shares of the beer maker, slipping about 2.8%. After reporting first quarter earnings, the company did beat analyst expectations on the top and bottom line but margins contracted, thanks to raw materials costs and marketing spend. The company’s beer sales up by 11%, driven by strong growth for Modelo Especial, which just took Bud Light’s place as the best selling beer in the US. Will those gains be sustained? We shall see.
I got a– I believe that they’re not– their timing of their conference call is a bit unusual, it’s this afternoon. They were out with earnings this morning. But I imagine, it will– that Bill Newlands and company will get some questions about Modelo, about sustainability of that brand, about some of the issues at Bud Light and whether they can continue to capitalize on those.
– Yeah. Well, the conference call being at that time perhaps, gives them time to crack open a few cold ones. And then for the effects to waver off or Peter out.
– I don’t know. That would be a more fun conference call than most conference calls if they did indeed crack up some product.
– Yeah. They should just send a pack to everybody who’s going to be asking questions on the call too. Every analyst– I know right. We’re going to– you guys can have that one for free. I won’t even take commission on that one. Wine and spirits business that delivers strong relative performance as well they mentioned, across the higher end wine portion of the portfolio, outpacing some of the corresponding segments of the US wine category they mentioned in dollar sales growth, at least.
And then additionally here, as they’re looking forward, going forward from here, they reaffirmed their fiscal 2024 cash flow target, that’s going to be at about $2.4 to $2.6 million free cash flow projection $1.2 to $1.3 billion. And they updated their outlook for EPS as well. They brought that in at $9.35 to a top end of $9.65 as well.
– Yeah. Just real quickly, they might have talked about being encouraged by wine and spirits. But the sales number did miss analyst estimates by a bit, so beer was stronger wine and spirits not as strong versus what analysts had been anticipating.
