We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Factors to Drive Constellation Brands' (STZ) Earnings in Q4
Read MoreHide Full Article
Constellation Brands, Inc. (STZ - Free Report) is scheduled to release fourth-quarter fiscal 2023 results on Apr 6, 2023. The alcoholic beverage bigwig is expected to deliver top and bottom-line declines in the to-be-reported quarter.
The Zacks Consensus Estimate for the company’s fiscal fourth-quarter earnings is pegged at $1.87 per share, indicating a 21.1% decline from the year-ago quarter’s reported figure. The consensus mark has moved down 2.1% in the past 30 days. The consensus mark for revenues is pegged at $2.03 billion, suggesting a 3.4% increase from the prior-year quarter’s reported figure.
For fiscal 2023, the consensus mark for earnings is pegged at $10.54, suggesting an increase of 3.3% from the year-ago quarter’s reported figure. The consensus mark has declined 0.5% in the past 30 days. The Zacks Consensus Estimate for the company’s fiscal 2023 revenues is pegged at $9.5 billion, suggesting a 7.5% decline from the prior-year quarter’s reported figure.
We expect the company’s fiscal fourth-quarter total revenues to decline 1.5% year over year to $1.995.2 million and comparable earnings to decline 20.2% to $1.89 per share. For fiscal 2023, we estimate revenue growth of 7.1% to $9,450 million and earnings per share growth of 3.4% to $10.55.
In the last reported quarter, the alcohol behemoth delivered a negative earnings surprise of 1.7%. However, its bottom line beat estimates by 6.1%, on average, over the trailing four quarters.
Constellation Brands is expected to have gained from continued growth in the beer business and robust consumer demand for its portfolio of premium, high-end products in the fiscal fourth quarter. STZ’s wine & spirits business has been benefiting from its premiumization strategy focused on making investments to fuel growth of its power brands through innovation, capitalizing on priority, consumer trends and product introductions. Strength in high-end Power Brands, including The Prisoner Brand Family, Kim Crawford and Meiomi, have been key growth drivers.
Constellation Brands has been significantly gaining from strength in the beer business. Depletion volume growth, stemming from strength in Modelo Especial and Corona Extra, has been aiding the top line. The beer segment has also been witnessing gains from premiumization, driven by growth in traditional beer, as well as the flavors category, including seltzers, flavored beer, RTD spirits and flavored malt beverages. These are likely to have aided the top line in the to-be-reported quarter.
On the last reported quarter’s earnings call, management expected net sales for fiscal 2023 to increase 9-10% for the beer segment.
However, higher COGS, and marketing and SG&A expenses have been affecting the company’s earnings. Higher raw material, packaging and logistic costs due to the persistent inflationary pressures, higher operating costs from brewery expansions, and elevated marketing expenses due to the shift in the timing of sports advertisement investment have been weighing on margins.
On the last reported quarter’s earnings call, management expected operating income to increase 4-5% for the beer business and 3-5% for the wine and spirits business.
Supply-chain challenges and elevated material costs due to inflationary headwinds have been weighing on the company’s bottom-line performance. Constellation Brands has been witnessing supply-chain challenges, driven by container surcharges and warehousing costs, which are likely to have impacted its business in fourth-quarter fiscal 2023.
For fourth-quarter fiscal 2023, we expect the company’s consolidated adjusted operating margin to decline 130 bps year over year to 30%, driven by an 80-bps decline in SG&A expense rate and a 120-bps decline in COGS as a percentage of sales.
Zacks Model
Our proven model conclusively predicts an earnings beat for Constellation Brands this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Constellation Brands has a Zacks Rank #3 and an Earnings ESP of +3.99%.
Other Stocks With Favorable Combination
Here are some other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Kimberly-Clark (KMB - Free Report) currently has an Earnings ESP of +6.71% and a Zacks Rank of 2. The company is likely to register top-line growth when it reports first-quarter 2023 results. The Zacks Consensus Estimate for KMB quarterly earnings has moved down by a penny in the past 30 days to $1.31 per share. The consensus mark indicates a 3% decline from the year-ago quarter’s reported number.
Kimberly-Clark’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.1 billion, which suggests a rise of 0.1% from the figure reported in the prior-year quarter. KMB has delivered an earnings beat of 1.4%, on average, in the trailing four quarters.
Keurig Dr Pepper (KDP - Free Report) currently has an Earnings ESP of +0.75% and a Zacks Rank of 3. The company is likely to register an increase in the top line when it reports first-quarter 2023 results. The Zacks Consensus Estimate for quarterly earnings has been unchanged in the last 30 days at 33 cents per share. The consensus estimate indicates flat earnings from the year-ago quarter's reported number.
Keurig Dr Pepper’s top line is expected to have risen year over year. The Zacks Consensus Estimate for KDP’s quarterly revenues is pegged at $3.3 billion, suggesting growth of 6.4% from the figure reported in the prior-year quarter. KDP has delivered a negative earnings surprise of 0.5%, on average, in the trailing four quarters.
Altria Group (MO - Free Report) currently has an Earnings ESP of +2.74% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports first-quarter 2023 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $4.98 billion, which suggests a rise of 3.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for quarterly earnings has moved up by a penny to $1.19 per share in the past seven days. The consensus mark for MO’s earnings indicates growth of 6.3% from the year-ago quarter’s reported number. MO has delivered an earnings beat of 0.3%, on average, in the trailing four quarters.
Image: Bigstock
Factors to Drive Constellation Brands' (STZ) Earnings in Q4
Constellation Brands, Inc. (STZ - Free Report) is scheduled to release fourth-quarter fiscal 2023 results on Apr 6, 2023. The alcoholic beverage bigwig is expected to deliver top and bottom-line declines in the to-be-reported quarter.
The Zacks Consensus Estimate for the company’s fiscal fourth-quarter earnings is pegged at $1.87 per share, indicating a 21.1% decline from the year-ago quarter’s reported figure. The consensus mark has moved down 2.1% in the past 30 days. The consensus mark for revenues is pegged at $2.03 billion, suggesting a 3.4% increase from the prior-year quarter’s reported figure.
For fiscal 2023, the consensus mark for earnings is pegged at $10.54, suggesting an increase of 3.3% from the year-ago quarter’s reported figure. The consensus mark has declined 0.5% in the past 30 days. The Zacks Consensus Estimate for the company’s fiscal 2023 revenues is pegged at $9.5 billion, suggesting a 7.5% decline from the prior-year quarter’s reported figure.
We expect the company’s fiscal fourth-quarter total revenues to decline 1.5% year over year to $1.995.2 million and comparable earnings to decline 20.2% to $1.89 per share. For fiscal 2023, we estimate revenue growth of 7.1% to $9,450 million and earnings per share growth of 3.4% to $10.55.
In the last reported quarter, the alcohol behemoth delivered a negative earnings surprise of 1.7%. However, its bottom line beat estimates by 6.1%, on average, over the trailing four quarters.
Constellation Brands Inc Price and EPS Surprise
Constellation Brands Inc price-eps-surprise | Constellation Brands Inc Quote
Key Factors to Note
Constellation Brands is expected to have gained from continued growth in the beer business and robust consumer demand for its portfolio of premium, high-end products in the fiscal fourth quarter. STZ’s wine & spirits business has been benefiting from its premiumization strategy focused on making investments to fuel growth of its power brands through innovation, capitalizing on priority, consumer trends and product introductions. Strength in high-end Power Brands, including The Prisoner Brand Family, Kim Crawford and Meiomi, have been key growth drivers.
Constellation Brands has been significantly gaining from strength in the beer business. Depletion volume growth, stemming from strength in Modelo Especial and Corona Extra, has been aiding the top line. The beer segment has also been witnessing gains from premiumization, driven by growth in traditional beer, as well as the flavors category, including seltzers, flavored beer, RTD spirits and flavored malt beverages. These are likely to have aided the top line in the to-be-reported quarter.
On the last reported quarter’s earnings call, management expected net sales for fiscal 2023 to increase 9-10% for the beer segment.
However, higher COGS, and marketing and SG&A expenses have been affecting the company’s earnings. Higher raw material, packaging and logistic costs due to the persistent inflationary pressures, higher operating costs from brewery expansions, and elevated marketing expenses due to the shift in the timing of sports advertisement investment have been weighing on margins.
On the last reported quarter’s earnings call, management expected operating income to increase 4-5% for the beer business and 3-5% for the wine and spirits business.
Supply-chain challenges and elevated material costs due to inflationary headwinds have been weighing on the company’s bottom-line performance. Constellation Brands has been witnessing supply-chain challenges, driven by container surcharges and warehousing costs, which are likely to have impacted its business in fourth-quarter fiscal 2023.
For fourth-quarter fiscal 2023, we expect the company’s consolidated adjusted operating margin to decline 130 bps year over year to 30%, driven by an 80-bps decline in SG&A expense rate and a 120-bps decline in COGS as a percentage of sales.
Zacks Model
Our proven model conclusively predicts an earnings beat for Constellation Brands this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Constellation Brands has a Zacks Rank #3 and an Earnings ESP of +3.99%.
Other Stocks With Favorable Combination
Here are some other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Kimberly-Clark (KMB - Free Report) currently has an Earnings ESP of +6.71% and a Zacks Rank of 2. The company is likely to register top-line growth when it reports first-quarter 2023 results. The Zacks Consensus Estimate for KMB quarterly earnings has moved down by a penny in the past 30 days to $1.31 per share. The consensus mark indicates a 3% decline from the year-ago quarter’s reported number.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Kimberly-Clark’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.1 billion, which suggests a rise of 0.1% from the figure reported in the prior-year quarter. KMB has delivered an earnings beat of 1.4%, on average, in the trailing four quarters.
Keurig Dr Pepper (KDP - Free Report) currently has an Earnings ESP of +0.75% and a Zacks Rank of 3. The company is likely to register an increase in the top line when it reports first-quarter 2023 results. The Zacks Consensus Estimate for quarterly earnings has been unchanged in the last 30 days at 33 cents per share. The consensus estimate indicates flat earnings from the year-ago quarter's reported number.
Keurig Dr Pepper’s top line is expected to have risen year over year. The Zacks Consensus Estimate for KDP’s quarterly revenues is pegged at $3.3 billion, suggesting growth of 6.4% from the figure reported in the prior-year quarter. KDP has delivered a negative earnings surprise of 0.5%, on average, in the trailing four quarters.
Altria Group (MO - Free Report) currently has an Earnings ESP of +2.74% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports first-quarter 2023 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $4.98 billion, which suggests a rise of 3.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for quarterly earnings has moved up by a penny to $1.19 per share in the past seven days. The consensus mark for MO’s earnings indicates growth of 6.3% from the year-ago quarter’s reported number. MO has delivered an earnings beat of 0.3%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.