Constellation Brands Sees Beer Sales Skyrocket While Wine and Spirits Demand Declines
Constellation Brands surpasses profit and revenue expectations driven by booming beer sales, despite a downturn in wine and spirits demand.
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Key Highlights
- Robust beer sales propelled Constellation Brands past earnings and revenue predictions, even as wine and spirits demand weakened.
- Modelo Especial, which overtook Bud Light as the top-selling beer in the U.S. after Bud Light’s controversial collaboration with Dylan Mulvaney, experienced a 9% sales increase.
- Wine and spirits segments faced challenges as consumers gravitate towards higher-end premium brands.
Constellation Brands (STZ) reported impressive quarterly results for fiscal Q2 2024, exceeding market expectations and raising its full-year guidance. The surge in beer sales was notably influenced by the negative reception of rival Anheuser-Busch Inbev’s (BUD) partnership with transgender influencer Dylan Mulvaney. However, softer demand in the company’s wine and spirits categories weighed on investor sentiment, leading to a dip in shares.
The company posted earnings per share (EPS) of $3.70 and revenue growth of 7%, reaching $2.84 billion, both surpassing analyst forecasts.
Beer sales soared 12%, with shipments climbing 8.7%. Modelo Especial’s sales grew by 9%, securing its position as America’s leading beer brand post the Bud Light controversy. Additionally, Modelo Chelada brands saw a remarkable 42% increase in sales.
Conversely, wine and spirits sales declined by 14%, with distributor case shipments falling 7.8%. CEO Bill Newlands highlighted ongoing demand challenges within this segment, particularly for mainstream products, as consumers increasingly opt for premium alternatives.
In response to strong performance, Constellation Brands raised its full-year EPS guidance to a range of $9.60 to $9.80, up from the previous $9.35 to $9.65.
Despite a 3.2% drop in shares on Thursday, the stock remains up 6% year-to-date.
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