Constellation Brands Inc. provided full-year profit guidance beyond Wall Street expectations, aided by price increases intended to offset rising expenses and high demand for its premium beer brands.
To protect its margins from the rising costs of packaging, raw materials, logistics, and labor, the company has been boosting the pricing of its beer, wine, and spirits, similar to other distillers.
Constellation claimed that despite the impact of inflation on consumer spending patterns, consumers continued to choose its premium beer brands, such as Modelo Especial and Corona Extra. Additionally, there is still a strong market for its excellent and premium wine.
Despite an uncertain consumer environment, analysts claim that the company’s beer business appears set for a strong fiscal 2024 with price increases and new product releases, including Modelo Oro beer in the United States.
According to Refinitiv statistics, Constellation stated that it anticipated full-year adjusted profit per share to range between $11.70 and $12.00, lower than the average expectation of analysts, which was $11.68 per share.
Before the bell, the company’s shares increased by more than 1% to $224.
For the quarter that ended on February 28, Constellation also reported adjusted earnings of $1.98 per share, exceeding analysts’ expectations of $1.82 per share.
Constellation, which is well-known for its brands including Kim Crawford and SVEDKA Vodka, reported a 5% decline in revenue to around $2.0 billion, falling short of analysts’ average estimate of $2.02 billion.
(Adapted from Reuters.com)