Constellation Brands Rises on Strong Q3 Earnings Beat
Shares of the Corona and Modelo parent climb as the company's beer division posts strong sales and the firm reaffirms its full-year earnings forecast.
Shares of Constellation Brands (NYSE: STZ) gained ground on Wednesday after the beverage giant reported third-quarter earnings that surpassed analyst expectations, driven by robust sales in its beer portfolio.
The company, which owns popular brands like Corona and Modelo, posted a comparable earnings per share of $3.06, significantly ahead of the $2.65 consensus estimate from analysts. Revenue for the quarter landed at $2.22 billion, beating the anticipated $2.17 billion, as reported by the company.
In afternoon trading, the company's stock was up, reflecting investor optimism following the strong quarterly performance. The positive results provided a boost to the stock, which has seen a wide range over the past year. The results signal strong consumer demand for its core beer products, which continue to be a significant growth engine for the company. The beer business's strong performance was a key highlight in the earnings release, a sentiment echoed by market reports from sources like Investing.com.
Buoyed by the strong quarter, Constellation Brands reaffirmed its full-year comparable EPS outlook in the range of $11.30 to $11.60. This guidance suggests that management is confident in its ability to maintain momentum through the end of the fiscal year, despite a complex macroeconomic environment.
"Our Beer Business delivered another quarter of strong growth, and we gained share in the valuable high-end of the U.S. beer market," the company stated in its earnings release. The continued strength of the Modelo Especial brand, in particular, has been a key factor in the company's success.
The wine and spirits segment, however, has faced more challenges, a continuing trend for the company. Constellation has been in the process of optimizing this part of its portfolio to better align with consumer trends favoring premium products.
Analysts are now closely watching to see if the momentum in the beer division can continue to offset the headwinds in the wine and spirits business. The reaffirmation of the full-year outlook was a key point for investors, providing a degree of certainty in an uncertain market. As noted by Benzinga, the stock's climb is a direct reaction to the solid earnings and positive forecast.
Constellation's performance is also a noteworthy data point for the broader consumer staples sector, indicating that consumers are still spending on premium alcoholic beverages. The company's ability to successfully navigate inflationary pressures and supply chain challenges will be a key focus for investors in the upcoming quarters.