=Constellation Brands (STZ) reported earnings on Wed 9 Jan 2019 (b/o)

Constellation Brands beats by $0.29, beats on revs; lowers FY19 EPS below consensus on lower wine and spirits outlook

• Reports Q3 (Nov) earnings of $2.37 per share, excluding non-recurring items, $0.29 better than the S&P Capital IQ Consensus of $2.08; revenues rose 9.5% year/year to $1.97 bln vs the $1.91 bln S&P Capital IQ Consensus.
  • Beer: The Modelo and Corona brand families drove depletion growth of 8%, with the Constellation beer business achieving the most significant share gains in the U.S. beer industry for the third quarter.
  • Wine and sprits: Depletion performance for the below $11 price point continues to be challenged, resulting in an overall fiscal year-to-date depletion decline of 2%.
• Co issues downside guidance for FY19, sees EPS of $9.20-9.30 vs. $9.44 S&P Capital IQ Consensus. Affirms fiscal 2019 operating cash flow target of approximately $2.45 billion and free cash flow projection of $1.2 - $1.3 billion. The beer business now expects fiscal 2019 net sales growth to be at the high end of the 9 - 11% range and operating margin to approximate 39%. The wine and spirits business now expects net sales and operating income to decline low-single digits for fiscal 2019, down from +2-4% growth last quarter.