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Constellation Brands 8-K Report, Financial Results (Apr 9, 2025)

Reports
Earnings & Results·Regulation FD·Other Events+1
Filing Date
Filed April 9, 2025
Period End
April 9, 2025
Security
STZ
In the record · 2016–202610-K1110-Q338-K237

STZ filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 237 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Sep ’18Sep ’18
  2. Leadership change8-K · Oct ’20Oct ’20
  3. Leadership change8-K · Nov ’22Nov ’22
  4. Material agreement8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed April 9, 2025. Cited figures are marked; the original filing is the authoritative source.

Constellation Brands, Inc. reported results for its fiscal year and fourth fiscal quarter ended February 28, 2025, in a news release furnished as Exhibit 99.1.

Net sales for the fiscal year were $10,208.7 milliona, up from $9,961.8 million, and reported diluted EPS was $(0.45), compared with $9.39 a year earlier. The reported loss reflects goodwill and intangible asset impairments of $2,797.7 million and an assets held for sale impairment of $478.0 million, mainly related to the Wine and Spirits business. Comparable diluted EPS was $13.78, compared with $12.38.

Operating cash flow was $3,152.2 millionb and free cash flow was $1,938.1 million, versus $2,780.0 million and $1,510.9 million in the prior year. The Beer Business remained the core of results, with fiscal 2025 net sales of $8,539.8 million, up from $8,162.6 million, and an operating margin of 39.7%. Wine and Spirits organic net sales declined 6%, and operating margin fell to 19.5%.

Management issued fiscal 2026 comparable EPS guidance of $12.60 to $12.90c and reported EPS guidance of $12.33 to $12.63. Fiscal 2026 guidance also calls for enterprise organic net sales growth of (2)% to 1%, and the outlook reflects tariffs announced by the U.S. government on April 2, 2025 and the Canadian government on March 4, 2025. The company also announced an agreement with The Wine Group to fully divest, and in certain instances exclusively license the trademarks of, a portion of its wine and spirits business, centered on remaining mainstream wine brands.

The transaction is expected to close immediately after the first fiscal quarter ending May 31, 2025, subject to closing conditions including regulatory approval. Separately, the Board declared a quarterly dividend of $1.02d per Class A share and authorized a new three-year share repurchase program of up to $4 billion, replacing the prior $2 billion authorization, which had approximately $1.5 billion remaining.

02—Key points

Key Highlights

  1. Fiscal 2025 reported diluted EPS was $(0.45), including $2,797.7 million of goodwill and intangible asset impairments and $478.0 million of assets held for sale impairment; comparable EPS was $13.78 versus $12.38 a year earlier.
  2. Fiscal 2025 net sales rose to $10,208.7 million from $9,961.8 million; Beer net sales grew to $8,539.8 million from $8,162.6 million, with Beer operating margin of 39.7%.
  3. Wine and Spirits organic net sales declined 6% for the year, and operating margin fell to 19.5% from 22.2%.
  4. Operating cash flow was $3,152.2 million and free cash flow was $1,938.1 million, compared with $2,780.0 million and $1,510.9 million in fiscal 2024.
  5. Fiscal 2026 guidance calls for reported EPS of $12.33 to $12.63 and comparable EPS of $12.60 to $12.90, with operating cash flow of $2.7 to $2.8 billion and free cash flow of $1.5 to $1.6 billion.
  6. Agreement to divest and exclusively license trademarks of mainstream wine brands to The Wine Group, expected to close after the quarter ending May 31, 2025, subject to regulatory approval.
  7. Board declared a $1.02 quarterly dividend per Class A share and authorized up to $4 billion in share repurchases through February 29, 2028, replacing the prior $2 billion program.

03—Questions

Frequently Asked Questions

  1. Why was the reported fiscal 2025 EPS a loss when comparable EPS was positive?

    Reported diluted EPS was $(0.45) because of non-cash charges, including $2,797.7 million of goodwill and intangible asset impairments and $478.0 million of assets held for sale impairment, primarily tied to the Wine and Spirits business. Comparable EPS of $13.78 excludes these and other items that affect comparability.

  2. What does the Wine and Spirits divestiture involve?

    Constellation agreed to fully divest, and in certain instances exclusively license the trademarks of, a portion of its wine and spirits business to The Wine Group. The portion centers on remaining mainstream wine brands, including Woodbridge, Meiomi, Robert Mondavi Private Selection, Cook's, SIMI, and J. Rogét, along with associated inventory, wineries, vineyards, offices, and facilities. Closing is expected immediately after the quarter ending May 31, 2025.

  3. What is the new share repurchase authorization?

    The Board authorized repurchases of up to $4 billion of publicly traded common stock, expiring February 29, 2028. It replaces the previous $2 billion authorization, of which approximately $1.5 billion remained unused. Repurchases may be made in the open market or in privately negotiated transactions, at management's discretion.

  4. How do the fiscal 2026 outlook and tariffs affect the guidance?

    Fiscal 2026 reported EPS is guided to $12.33 to $12.63 and comparable EPS to $12.60 to $12.90. The outlook for fiscal 2026 through fiscal 2028 reflects the anticipated impact of tariffs announced by the U.S. government on April 2, 2025 and the Canadian government on March 4, 2025. Fiscal 2026 guidance also includes the separately announced Wine and Spirits divestiture and restructuring actions.

04—Continue

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