Constellation Brands Stock Jumps on Q4 Earnings Beat, Dividend Hike

Constellation Brands (STZ) stock rose in early trading Thursday as the beverage company reported better-than-expected fourth-quarter fiscal 2024 earnings, driven by a rise in beer sales.

Constellation, which makes Corona and Modelo beers as well as a number of wine and spirits brands, reported $2.14 billion in sales for the fourth quarter, up from $2 billion in the year-ago quarter and above analyst estimates compiled by Visible Alpha. Adjusted income came in at $414.2 million or $2.26 per share, compared to expectations of $385.9 million and $2.10 per share, respectively.

Constellation’s board also approved an increase to its quarterly dividend by 13% to $1.01 per share of Class A stock, which will be paid out on May 17 to shareholders of record by May 3.

As in its previous two quarters of fiscal 2024, beer sales were a key driver of growth while wine and spirit sales continued to struggle. Beer sales reached $1.7 billion in the quarter, an 11% bump from the $1.54 billion Constellation reported in the fourth quarter of fiscal 2023.

Wine and spirits sales, however, fell 6% year-over-year to $436.4 million from $462.2 million and were 9% lower over the full fiscal year, which Constellation attributed to “U.S. wholesale unfavorability, particularly among our largest mainstream and premium brands and destocking across our international markets, partially offset by 10% net sales growth in our DTC channel.”

Modelo Especial became the top-selling beer brand in the U.S. over the fiscal year as Budweiser’s Bud Light sales in the U.S. took a hit from a boycott of the brand following an advertisement with transgender social media influencer Dylan Mulvaney.

Constellation projected continued growth in fiscal 2025, including projected adjusted earnings per share (EPS) of $13.50 to $13.80, compared to the $12.06 the company posted in fiscal 2024. Beer sales are projected to continue growing 7% to 9% after increasing by 9% in fiscal 2024, while wine and spirit sales are expected to post between a 0.5% decline and 0.5% growth after falling by 9% over the last year.

Constellation shares jumped over 2% in the opening minutes of trading before paring back gains to 1% around $268 by 11:30 a.m. ET. The beverage maker has gained about 10% so far this year, and more than 17% in the last 12 months.