Constellation Brands raises EPS forecast on higher beer sales

Constellation Brands (STZ) on Wednesday reported a big increase in first-quarter profit and raised its full-year forecast for higher beer sales, but sales of wine and spirits fell.

The company reported earnings per share (EPS) for the first quarter of fiscal 2025 at $4.78, significantly ahead of analysts’ consensus of $3.45 from Visible Alpha and last year’s figure of $0.74. Revenue rose 5.8% year over year to $2.66 billion, slightly below forecasts.

Modelo Especial leads beer sales up

Beer sales rose 8.3% to $2.27 billion, driven by a 7.6% increase in shipping volume and cost-cutting initiatives. Demand for Modelo Especial continued to grow, with Constellation noting that it had the highest dollar sales of any brand in the U.S. Modelo Especial surpassed Anheuser-Busch InBev’s (BUD) Bud Light to become the country’s top-selling beer last year following controversy over AB InBev’s relationship with transgender influencer Dylan Mulvaney.

Chief Financial Officer (CFO) Garth Hankinson said that “continued revenue growth and cost reduction actions in our brewing business contributed to operating income growth and cash flow generation.”

While the beer business boomed, wine and spirits sales fell 6.6% to $389 million, and shipment volumes fell 5.1%. The company explained that the segment “continues to face challenging market conditions, primarily in the U.S. wholesale channel across most price points in the wine category.”

Constellation Brands now expects full-year earnings per share to be between $14.63 and $14.93, up from its previous forecast of $13.40 to $13.70.

Constellation Brands shares fell to $258.01 at 10:40 a.m. ET Wednesday. They are up 6.7% year to date.