01—Abstract
Summary
Summary of the 8-K filed April 11, 2024. Cited figures are marked; the original filing is the authoritative source.
On April 11, 2024, Constellation Brands, Inc. reported results for its fiscal year and fourth quarter ended February 29, 2024.
Fiscal 2024 net sales were $9.96 billiona, flat against the $9.45 billion... (see note below) and reported diluted EPS was $9.39, with comparable diluted EPS of $12.06 (or $12.38 excluding Canopy EIE). Reported operating income was $3.17 billion, and net income attributable to CBI was $1.73 billion.
Operating cash flow was $2.78 billionb and free cash flow was $1.51 billion, versus $1.72 billion in the prior year. The Beer Business drove growth, with net sales of $8.16 billion, up 9%, and depletions up 7.5%, while Wine and Spirits net sales declined 9% to $1.80 billion. For fiscal 2025 the company issued reported EPS guidance of $13.40 to $13.70 and comparable EPS guidance of $13.50 to $13.80.
It also guided to operating cash flow of $2.8 to $3.0 billionc and free cash flow of $1.4 to $1.5 billion, with capital expenditures of $1.4 to $1.5 billion, including approximately $1.2 billion for Mexico beer operations. The filing states that the company expects approximately $3 billion of capital expenditures from fiscal 2025 through fiscal 2028 for Mexico beer capacity.
The Board declared a quarterly dividend of $1.01d per Class A share, payable May 17, 2024. The Canopy Growth equity-method investment continued to weigh on reported results, with a reported loss of $321.3 million for the year, and the filing shows equity method investments carried at $170.6 million at February 29, 2024, down from $663.3 million a year earlier.
02—Key points
Key Highlights
- Fiscal 2024 reported EPS of $9.39 and comparable EPS of $12.06; excluding Canopy EIE, comparable EPS was $12.38
- Beer Business net sales rose 9% to $8.16 billion with depletions up 7.5%; operating margin was 37.9%
- Wine and Spirits net sales declined 9% to $1.80 billion, with operating margin down 60 basis points to 22.2%
- Operating cash flow of $2.78 billion and free cash flow of $1.51 billion, versus $1.72 billion in the prior year
- Fiscal 2025 guidance: reported EPS $13.40 to $13.70; comparable EPS $13.50 to $13.80; enterprise net sales growth of 6% to 7%
- Quarterly dividend of $1.01 per Class A share declared, up 13%, payable May 17, 2024
- Net leverage ratio reduced from 3.6x to 3.2x, per management commentary in the release
03—Questions
Frequently Asked Questions
How did Constellation Brands perform in fiscal 2024?
Net sales were $9.96 billion, up 5% on a reported basis. Reported operating income was $3.17 billion, up 11%, and comparable operating income was $3.25 billion, up 7%. Reported diluted EPS was $9.39, and comparable EPS was $12.06.
What is the company's outlook for fiscal 2025?
Management guided to reported EPS of $13.40 to $13.70 and comparable EPS of $13.50 to $13.80. Beer net sales are expected to grow 7% to 9%, while Wine and Spirits net sales are expected to range from a 0.5% decline to 0.5% growth. Free cash flow is projected at $1.4 to $1.5 billion.
How is the Beer Business performing?
Beer net sales rose 9% to $8.16 billion for the year, and depletions grew 7.5%. Modelo Especial became the number one beer brand in dollar sales, and the release notes the 14th consecutive year of volume growth.
Why did free cash flow decline?
Free cash flow was $1.51 billion, down from $1.72 billion, as purchases of property, plant, and equipment rose to $1.27 billion from $1.04 billion. The release attributes the higher spending to brewery capacity investments.
What is the Canopy investment's impact on results?
Constellation's share of Canopy's equity losses and related activities was $321.3 million for the year on a reported basis, compared with a $949.3 million loss in the prior year. Comparable EPS excluding Canopy EIE was $12.38, versus $12.06 including it.
04—Continue