Delaware | 001-08495 | 16-0716709 | ||||||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class |
Trading
Symbol(s)
|
Name of Each Exchange on Which Registered | ||||||
Class A Common Stock | STZ | New York Stock Exchange |
Emerging growth company | ☐ | |||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Item 2.02 | Results of Operations and Financial Condition. |
Item 7.01 | Regulation FD Disclosure. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit No. | Description | ||||
99.1 | |||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | ||||
Date: | July 3, 2024 | CONSTELLATION BRANDS, INC. | |||||||||
By: | /s/ Garth Hankinson | ||||||||||
Garth Hankinson | |||||||||||
Executive Vice President and Chief Financial Officer |
Net Sales |
Operating Income (Loss) |
Net Income (Loss) Attributable to CBI |
Adjusted Earnings Before Interest & Taxes |
Diluted Net Income
(Loss) Per Share
Attributable to CBI
(EPS)
|
|||||||||||||
First Quarter Fiscal Year 2025 Financial Highlights (1) | In millions, except per share data | |||||||||||||||||
Reported | $2,662 | $942 | $877 | $1,024 | $4.78 | ||||||||||||
% Change | 6% | 23% | NM | 193% | NM | ||||||||||||
Comparable | $2,662 | $924 | $655 | $923 | $3.57 | ||||||||||||
% Change | 6% | 12% | 22% | 16% | 17% |
CONSTELLATION
BRANDS GROWTH
OUTPACES
CPG SECTOR BY
4.5 PERCENTAGE
POINTS IN
DOLLAR SALES
|
BEER BUSINESS
DELIVERS
2ND HIGHEST
SHARE GAIN
IN BEVERAGE
INDUSTRY IN
DOLLAR SALES
|
CRAFT SPIRITS
PORTFOLIO
ACHIEVES DOUBLE-
DIGIT GROWTH
IN DOLLAR SALES,
OUTPERFORMING
HIGHER-END
SPIRITS SEGMENT
|
|||||||||||||||||||||
Relative performance to CPG sector per Circana, total U.S. Multi-Outlet + Convenience, 12 weeks ended on May 19, 2024 (latest available CPG sector data within the first quarter of fiscal 2025); all other Circana data per 12 weeks ended June 2, 2024. |
"Our Beer Business continued to achieve strong volume growth well above that of its category and total Beverage Alcohol. This outstanding performance supported the second largest dollar share gain within the broader Beverage industry and reinforced our significant growth outperformance relative to the entire CPG sector. Our Wine and Spirits Business is making good progress against the operational and commercial execution initiatives identified in Q4 of Fiscal '24 to support its trajectory toward this year's |
"The consistent top-line growth and cost savings actions of our Beer Business drove strong operating income and cash flow generation in Q1. In line with our disciplined and balanced capital allocation priorities from the last five years: we lowered our net leverage ratio to 3.1x and continue to expect to achieve our ~3.0x target this fiscal year; returned cash to shareholders through our dividend and $200 million of share repurchases in Q1; continued to advance our brewery investments in our Beer Business; and |
|||||||||||||
guidance. All in, we continue to make progress and remain focused on our Fiscal '25 outlook." | executed a tuck-in acquisition bringing mix and asset utilization benefits for our wine portfolio." |
|||||||||||||
Bill Newlands | Garth Hankinson | |||||||||||||
President and Chief Executive Officer |
Executive Vice President and Chief Financial Officer |
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 1 |
beer | |||||||||||||||||
Shipments | Depletions | Net Sales |
Operating
Income (Loss)
|
||||||||||||||
Three Months Ended | In millions; branded product, 24-pack, 12-ounce case equivalents | |||||||||||||||||
May 31, 2024 | 115.1 | $2,272.8 | $923.0 | ||||||||||||||
May 31, 2023 | 107.0 | $2,098.6 | $797.8 | ||||||||||||||
% Change | 7.6% | 6.4% | 8% | 16% |
wine and spirits | |||||||||||||||||
Shipments | Depletions |
Net Sales |
Operating
Income (Loss)
|
||||||||||||||
Three Months Ended | In millions; branded product, 9-liter case equivalents | |||||||||||||||||
May 31, 2024 | 5.6 | $389.0 | $59.7 | ||||||||||||||
May 31, 2023 | 5.9 | $416.3 | $79.3 | ||||||||||||||
% Change | (5.1%) | (12.7%) | (7%) | (25%) |
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 2 |
outlook | ||||||||||||||||||||
The table sets forth management's current EPS expectations for fiscal 2025 compared to fiscal 2024 actual results. | ||||||||||||||||||||
Reported | Comparable | |||||||||||||||||||
FY25 Estimate |
FY24 Actual |
FY25 Estimate |
FY24 Actual |
|||||||||||||||||
Fiscal Year Ending February 28/29 | $14.63 - $14.93 | $9.39 | $13.50 - $13.80 | $12.38 | ||||||||||||||||
Fiscal 2025 Guidance Assumptions: | ||||||||||||||||||||
•Enterprise: net sales growth of 6 - 7%
◦Beer: net sales growth of 7 - 9%
◦Wine and Spirits: net sales decline of 0.5% to growth of 0.5%
•Enterprise: operating income growth: reported of 10 - 12% and comparable of 8 - 10%
◦Beer: operating income growth of 10 - 12%
◦Wine and Spirits: operating income decline of 9 - 11%
◦Corporate expense: $260 million
•Interest expense, net: $445 - $455 million
|
•Tax rate: reported approximately 12%; inclusive of the
Mexicali Brewery sale
comparable approximately 18.5%
•Weighted average diluted shares outstanding: approximately 183 million; inclusive of share repurchases
•Operating cash flow: $2.8 - $3.0 billion
•Capital expenditures: $1.4 - $1.5 billion, including approximately $1.2 billion targeted for Mexico beer operations activities
•Free cash flow: $1.4 - $1.5 billion
|
ABOUT CONSTELLATION BRANDS
Constellation Brands (NYSE: STZ) is a leading international producer and marketer of beer, wine, and spirits with operations in the U.S., Mexico, New Zealand, and Italy. Our mission is to build brands that people love because we believe elevating human connections is Worth Reaching For. It’s worth our dedication, hard work, and calculated risks to anticipate market trends and deliver more for our consumers, shareholders, employees, and industry. This dedication is what has driven us to become one of the fastest-growing, large CPG companies in the U.S. at retail, and it drives our pursuit to deliver what’s next.
Every day, people reach for our high-end, iconic imported beer brands such as those in the Corona brand family like the flagship Corona Extra, Modelo Especial and the flavorful lineup of Modelo Cheladas, Pacifico, and Victoria; our fine wine and craft spirits brands, including The Prisoner Wine Company, Robert Mondavi Winery, Casa Noble Tequila, and High West Whiskey; and our premium wine brands such as Kim Crawford and Meiomi.
As an agriculture-based company, we have a long history of operating sustainably and responsibly. Our ESG strategy is embedded into our business and our work focuses on serving as good stewards of the environment, enhancing social equity within our industry and communities, and promoting responsible beverage alcohol consumption. These commitments ground our aspirations beyond driving the bottom line as we work to create a future that is truly Worth Reaching For.
To learn more, visit www.cbrands.com and follow us on X, Instagram, and LinkedIn.
|
MEDIA CONTACTS | INVESTOR RELATIONS CONTACTS | ||||||||||||||||
Amy Martin | 585-678-7141 | amy.martin@cbrands.com | Joseph Suarez | 773-551-4397 | joseph.suarez@cbrands.com | ||||||||||||
Carissa Guzski |
315-525-7362 |
carissa.guzski@cbrands.com |
Snehal Shah | 847-385-4940 | snehal.shah@cbrands.com | ||||||||||||
David Paccapaniccia | 585-282-7227 | david.paccapaniccia@cbrands.com | |||||||||||||||
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 3 |
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 4 |
May 31, 2024 |
February 29, 2024 |
||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 73.8 | $ | 152.4 | |||||||
Accounts receivable | 893.9 | 832.8 | |||||||||
Inventories | 2,127.0 | 2,078.3 | |||||||||
Prepaid expenses and other | 733.7 | 666.0 | |||||||||
Total current assets | 3,828.4 | 3,729.5 | |||||||||
Property, plant, and equipment | 8,298.0 | 8,055.2 | |||||||||
Goodwill | 7,985.4 | 7,980.3 | |||||||||
Intangible assets | 2,731.5 | 2,731.7 | |||||||||
Deferred income taxes | 2,020.3 | 2,055.0 | |||||||||
Other assets | 1,196.5 | 1,140.0 | |||||||||
Total assets | $ | 26,060.1 | $ | 25,691.7 | |||||||
LIABILITIES AND STOCKHOLDER’S EQUITY | |||||||||||
Current liabilities: | |||||||||||
Short-term borrowings | $ | 793.2 | $ | 241.4 | |||||||
Current maturities of long-term debt | 406.2 | 956.8 | |||||||||
Accounts payable | 1,139.3 | 1,107.1 | |||||||||
Other accrued expenses and liabilities | 783.5 | 836.4 | |||||||||
Total current liabilities | 3,122.2 | 3,141.7 | |||||||||
Long-term debt, less current maturities | 10,682.9 | 10,681.1 | |||||||||
Deferred income taxes and other liabilities | 1,683.1 | 1,804.3 | |||||||||
Total liabilities | 15,488.2 | 15,627.1 | |||||||||
CBI stockholders’ equity | 10,251.8 | 9,743.1 | |||||||||
Noncontrolling interests | 320.1 | 321.5 | |||||||||
Total stockholders’ equity | 10,571.9 | 10,064.6 | |||||||||
Total liabilities and stockholders’ equity | $ | 26,060.1 | $ | 25,691.7 |
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 5 |
Three Months Ended | |||||||||||
May 31, 2024 |
May 31, 2023 |
||||||||||
Sales | $ | 2,860.7 | $ | 2,699.5 | |||||||
Excise taxes | (198.9) | (184.6) | |||||||||
Net sales | 2,661.8 | 2,514.9 | |||||||||
Cost of product sold | (1,258.0) | (1,257.1) | |||||||||
Gross profit | 1,403.8 | 1,257.8 | |||||||||
Selling, general, and administrative expenses | (462.2) | (493.1) | |||||||||
Operating income (loss) | 941.6 | 764.7 | |||||||||
Income (loss) from unconsolidated investments | 82.0 | (415.4) | |||||||||
Interest expense, net |
(102.8) | (118.9) | |||||||||
Income (loss) before income taxes | 920.8 | 230.4 | |||||||||
(Provision for) benefit from income taxes | (28.0) | (91.2) | |||||||||
Net income (loss) | 892.8 | 139.2 | |||||||||
Net (income) loss attributable to noncontrolling interests | (15.8) | (3.3) | |||||||||
Net income (loss) attributable to CBI | $ | 877.0 | $ | 135.9 | |||||||
Class A Common Stock: |
|||||||||||
Net income (loss) per common share attributable to CBI – basic |
$ | 4.80 | $ | 0.74 | |||||||
Net income (loss) per common share attributable to CBI – diluted |
$ | 4.78 | $ | 0.74 | |||||||
Weighted average common shares outstanding – basic |
182.766 | 183.270 | |||||||||
Weighted average common shares outstanding – diluted |
183.461 | 183.863 | |||||||||
Cash dividends declared per common share |
$ | 1.01 | $ | 0.89 |
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 6 |
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
| |||||||||||
Three Months Ended | |||||||||||
May 31, 2024 |
May 31, 2023 |
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net income (loss) | $ | 892.8 | $ | 139.2 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Unrealized net (gain) loss on securities measured at fair value | — | 71.8 | |||||||||
Deferred tax provision (benefit) | 25.0 | (0.3) | |||||||||
Depreciation | 111.6 | 105.3 | |||||||||
Stock-based compensation | 17.3 | 14.5 | |||||||||
Equity in (earnings) losses of equity method investees and related activities, net of distributed earnings | 1.3 | 220.6 | |||||||||
Noncash lease expense | 29.1 | 22.0 | |||||||||
Impairment of equity method investments |
— | 123.5 | |||||||||
Net gain on conversion and exchange to Canopy exchangeable shares |
(83.3) | — | |||||||||
Change in operating assets and liabilities, net of effects from purchase and sale of business: | |||||||||||
Accounts receivable | (63.4) | (31.5) | |||||||||
Inventories | (47.3) | (57.6) | |||||||||
Prepaid expenses and other current assets | (61.4) | (17.9) | |||||||||
Accounts payable | 62.7 | 34.2 | |||||||||
Deferred revenue | 15.6 | 24.3 | |||||||||
Other accrued expenses and liabilities | (97.7) | (73.2) | |||||||||
Other | (111.8) | 90.5 | |||||||||
Total adjustments | (202.3) | 526.2 | |||||||||
Net cash provided by (used in) operating activities | 690.5 | 665.4 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
Purchase of property, plant, and equipment | (375.3) | (277.0) | |||||||||
Investments in equity method investees and securities | (13.0) | (21.6) | |||||||||
Proceeds from sale of assets | 12.9 | — | |||||||||
Proceeds from sale of business | — | 6.7 | |||||||||
Other investing activities | (2.0) | — | |||||||||
Net cash provided by (used in) investing activities | (377.4) | (291.9) | |||||||||
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 7 |
CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
| |||||||||||
Three Months Ended | |||||||||||
May 31, 2024 |
May 31, 2023 |
||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
Proceeds from issuance of long-term debt | — | 744.8 | |||||||||
Principal payments of long-term debt | (552.2) | (502.5) | |||||||||
Net proceeds from (repayments of) short-term borrowings | 551.8 | (346.3) | |||||||||
Dividends paid | (185.3) | (164.1) | |||||||||
Purchases of treasury stock | (200.0) | (35.0) | |||||||||
Proceeds from shares issued under equity compensation plans | 24.7 | 15.9 | |||||||||
Payments of minimum tax withholdings on stock-based payment awards | (13.8) | (11.2) | |||||||||
Payments of debt issuance, debt extinguishment, and other financing costs | — | (5.0) | |||||||||
Distributions to noncontrolling interests | (17.5) | (11.3) | |||||||||
Payment of contingent consideration | (0.7) | — | |||||||||
Net cash provided by (used in) financing activities | (393.0) | (314.7) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 1.3 | 0.2 | |||||||||
Net increase (decrease) in cash and cash equivalents | (78.6) | 59.0 | |||||||||
Cash and cash equivalents, beginning of period | 152.4 | 133.5 | |||||||||
Cash and cash equivalents, end of period | $ | 73.8 | $ | 192.5 |
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 8 |
Three Months Ended | |||||||||||||||||
May 31, 2024 | May 31, 2023 | Percent Change |
|||||||||||||||
Consolidated | |||||||||||||||||
Net sales | $ | 2,661.8 | $ | 2,514.9 | 6 | % | |||||||||||
Gross profit | $ | 1,403.8 | $ | 1,257.8 | 12 | % | |||||||||||
Operating income (loss) | $ | 941.6 | $ | 764.7 | 23 | % | |||||||||||
% Net sales | 35.4 | % | 30.4 | % | |||||||||||||
Income (loss) from unconsolidated investments |
$ | 82.0 | $ | (415.4) | NM | ||||||||||||
Depreciation and amortization |
$ | 111.9 | $ | 105.7 | 6 | % | |||||||||||
Comparable adjustments (1) |
|||||||||||||||||
Gross profit | $ | 22.0 | $ | (34.8) | NM | ||||||||||||
Operating income (loss) | $ | 17.6 | $ | (62.5) | NM | ||||||||||||
Income (loss) from unconsolidated investments | $ | 83.3 | $ | (384.4) | NM | ||||||||||||
Beer | |||||||||||||||||
Net sales | $ | 2,272.8 | $ | 2,098.6 | 8 | % | |||||||||||
Segment gross profit | $ | 1,213.1 | $ | 1,098.7 | 10 | % | |||||||||||
% Net sales | 53.4 | % | 52.4 | % | |||||||||||||
Segment operating income (loss) | $ | 923.0 | $ | 797.8 | 16 | % | |||||||||||
% Net sales | 40.6 | % | 38.0 | % | |||||||||||||
Segment depreciation and amortization |
$ | 86.4 | $ | 78.8 | 10 | % | |||||||||||
Wine and Spirits | |||||||||||||||||
Wine net sales | $ | 329.3 | $ | 361.0 | (9 | %) | |||||||||||
Spirits net sales | 59.7 | 55.3 | 8 | % | |||||||||||||
Net sales |
$ | 389.0 | $ | 416.3 | (7 | %) | |||||||||||
Segment gross profit | $ | 168.7 | $ | 193.9 | (13 | %) | |||||||||||
% Net sales | 43.4 | % | 46.6 | % | |||||||||||||
Segment operating income (loss) | $ | 59.7 | $ | 79.3 | (25 | %) | |||||||||||
% Net sales | 15.3 | % | 19.0 | % | |||||||||||||
Segment income (loss) from unconsolidated investments |
$ | 0.4 | $ | 2.3 | (83 | %) | |||||||||||
Segment depreciation and amortization |
$ | 21.3 | $ | 22.5 | (5 | %) | |||||||||||
Corporate Operations and Other | |||||||||||||||||
Segment operating income (loss) | $ | (58.7) | $ | (49.9) | (18 | %) | |||||||||||
Segment income (loss) from unconsolidated investments |
$ | (1.7) | $ | (33.3) | 95 | % | |||||||||||
Segment depreciation and amortization |
$ | 4.2 | $ | 4.4 | (5 | %) | |||||||||||
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 9 |
Three Months Ended | |||||||||||||||||
May 31, 2024 |
May 31, 2023 |
Percent Change |
|||||||||||||||
Beer | |||||||||||||||||
(branded product, 24-pack, 12-ounce case equivalents) | |||||||||||||||||
Shipments | 115.1 | 107.0 | 7.6 | % | |||||||||||||
Depletions (1) (2) |
6.4 | % | |||||||||||||||
Wine and Spirits | |||||||||||||||||
(branded product, 9-liter case equivalents) | |||||||||||||||||
Shipments | 5.6 | 5.9 | (5.1 | %) | |||||||||||||
U.S. Wholesale shipments |
4.9 | 5.2 | (5.8 | %) | |||||||||||||
Depletions (1) |
(12.7 | %) | |||||||||||||||
(1) |
Depletions represent U.S. distributor shipments of our respective branded products to retail customers, based on third-party data. |
||||||||||||||||||||||
(2) |
Includes an adjustment to remove volumes associated with the craft beer brand divestitures for the period March 1, 2023, through May 31, 2023, included in the three months ended May 31, 2023. |
||||||||||||||||||||||
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 10 |
Three Months Ended | |||||||||||
May 31, 2024 |
May 31, 2023 |
||||||||||
Operating income (loss) (GAAP) | $ | 941.6 | $ | 764.7 | |||||||
Comparable adjustments (Non-GAAP) (1) |
(17.6) | 62.5 | |||||||||
Comparable operating income (loss) (Non-GAAP) | $ | 924.0 | $ | 827.2 | |||||||
% Net sales | 34.7 | % | 32.9 | % | |||||||
Three Months Ended | |||||||||||
May 31, 2024 |
May 31, 2023 |
||||||||||
Net income (loss) attributable to CBI (GAAP) | $ | 877.0 | $ | 135.9 | |||||||
Net income (loss) attributable to
noncontrolling interests (GAAP)
|
15.8 | 3.3 | |||||||||
Provision for (benefit from) income taxes (GAAP) | 28.0 | 91.2 | |||||||||
Interest expense, net (GAAP) |
102.8 | 118.9 | |||||||||
Adjusted EBIT (Non-GAAP) | 1,023.6 | 349.3 | |||||||||
Comparable adjustments (Non-GAAP) (1) |
(100.9) | 446.9 | |||||||||
Comparable Canopy EIE (Non-GAAP) (2) |
— | 30.8 | |||||||||
Comparable EBIT (Non-GAAP) | $ | 922.7 | $ | 827.0 | |||||||
Three Months Ended | |||||||||||
May 31, 2024 |
May 31, 2023 |
||||||||||
Net income (loss) attributable to CBI (GAAP) | $ | 877.0 | $ | 135.9 | |||||||
Comparable adjustments (Non-GAAP) (1) |
(222.5) | 398.6 | |||||||||
Comparable Canopy EIE (Non-GAAP) (2) |
— | 24.3 | |||||||||
Comparable net income (loss) attributable to CBI (Non-GAAP) | $ | 654.5 | $ | 558.8 | |||||||
Three Months Ended | |||||||||||
May 31, 2024 |
May 31, 2023 |
||||||||||
EPS (GAAP) |
$ | 4.78 | $ | 0.74 | |||||||
Comparable adjustments (Non-GAAP) (1) |
(1.21) | 2.17 | |||||||||
Comparable Canopy EIE (Non-GAAP) (2) |
— | 0.13 | |||||||||
Comparable EPS (Non-GAAP) (3) |
$ | 3.57 | $ | 3.04 | |||||||
Weighted average common shares outstanding - diluted (3) |
183.461 | 183.863 |
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 11 |
Three Months Ended | |||||||||||
May 31, 2024 |
May 31, 2023 |
||||||||||
Net gain (loss) on undesignated commodity derivative contracts | $ | 14.6 | $ | (34.7) | |||||||
Settlements of undesignated commodity derivative contracts | 8.5 | 0.6 | |||||||||
Flow through of inventory step-up | (1.1) | (0.7) | |||||||||
Comparable adjustments, Gross profit | 22.0 | (34.8) | |||||||||
Transition services agreements activity | (2.8) | (5.7) | |||||||||
Restructuring and other strategic business development costs | (1.8) | (14.9) | |||||||||
Transaction, integration, and other acquisition-related costs | (0.2) | (0.3) | |||||||||
Other gains (losses) | 0.4 | (6.8) | |||||||||
Comparable adjustments, Operating income (loss) | 17.6 | (62.5) | |||||||||
Comparable adjustments, Income (loss) from unconsolidated investments | 83.3 | (384.4) | |||||||||
Comparable adjustments, Adjusted EBIT | 100.9 | (446.9) | |||||||||
Comparable adjustments, Interest expense, net |
— | (0.7) | |||||||||
Comparable adjustments, (Provision for) benefit from income taxes | 121.6 | 49.0 | |||||||||
Comparable adjustments, Net income (loss) attributable to CBI | $ | 222.5 | $ | (398.6) |
Three Months Ended | |||||||||||
May 31, 2024 |
May 31, 2023 |
||||||||||
Gain (loss) on sale of business | $ | — | $ | (7.0) | |||||||
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 12 |
Three Months Ended | |||||||||||
May 31, 2024 |
May 31, 2023 |
||||||||||
Net gain on conversion and exchange to Canopy exchangeable shares |
$ | 83.3 | $ | — | |||||||
Impairment of equity method investments |
$ | — | $ | (123.5) | |||||||
Comparable adjustments to Canopy EIE (see page 14 for further information) |
$ | — | $ | (189.0) | |||||||
Unrealized gain (loss) from the changes in fair value of securities measured at fair value |
$ | — | $ | (71.8) | |||||||
Three Months Ended | |||||||||||
May 31, 2024 |
May 31, 2023 |
||||||||||
Net income tax benefit recognized as a result of the resolution of various tax examinations and assessments related to prior periods |
$ | 121.2 | $ | — | |||||||
Net income tax benefit recognized for adjustments to valuation allowances |
$ | 4.4 | $ | — | |||||||
Net income tax benefit recognized as a result of a change in tax entity classification | $ | — | $ | 28.9 | |||||||
Net income tax benefit recognized as a result of a legislative update in Switzerland | $ | — | $ | 4.7 | |||||||
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 13 |
For the Three Months Ended May 31, 2023 | |||||
(in millions) | |||||
Equity earnings (losses) and related activities, Canopy EIE (GAAP) (1) |
$ | (219.8) | |||
(Provision for) benefit from income taxes (2) |
6.5 | ||||
Net income (loss) attributable to CBI, Canopy EIE (GAAP) (1) |
$ | (213.3) | |||
Equity earnings (losses) and related activities, Canopy EIE (GAAP) (1) |
$ | (219.8) | |||
Restructuring and other strategic business development costs | 160.6 | ||||
Goodwill impairment | 14.1 | ||||
Net (gain) loss on fair value financial instruments | 6.9 | ||||
(Gain) loss on dilution of Canopy stock ownership | 3.6 | ||||
Acquisition costs | 0.9 | ||||
Other (gains) losses | 2.9 | ||||
Comparable adjustments, Canopy EIE (Non-GAAP) | 189.0 | ||||
Comparable equity earnings (losses), Canopy EIE (Non-GAAP) (1) |
(30.8) | ||||
Comparable (provision for) benefit from income taxes (Non-GAAP) (2) |
6.5 | ||||
Comparable net income (loss) attributable to CBI, Canopy EIE (Non-GAAP) (1) |
$ | (24.3) | |||
For the Three Months Ended May 31, 2023 | |||||
EPS, Canopy EIE (GAAP) | $ | (1.16) | |||
Comparable adjustments, Canopy EIE (Non-GAAP) | 1.03 | ||||
Comparable EPS, Canopy EIE (Non-GAAP) (3) |
$ | (0.13) |
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 14 |
Three Months Ended |
|||||||||||||||||||||||||||||||||||
May 31, 2024 | May 31, 2023 | ||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | (Provision for) benefit from income taxes (2) |
Effective tax rate (4) |
Income (loss) before income taxes | (Provision for) benefit from income taxes (2) |
Effective tax rate (4) |
||||||||||||||||||||||||||||||
Reported basis (GAAP) | $ | 920.8 | $ | (28.0) | 3.0 | % | $ | 230.4 | $ | (91.2) | 39.6 | % | |||||||||||||||||||||||
Comparable adjustments - (Non-GAAP) | (100.9) | (121.6) | 447.6 | (49.0) | |||||||||||||||||||||||||||||||
Comparable Canopy EIE (Non-GAAP) |
— | — | 30.8 | (6.5) | |||||||||||||||||||||||||||||||
Comparable basis (Non-GAAP) | $ | 819.9 | $ | (149.6) | 18.2 | % | $ | 708.8 | $ | (146.7) | 20.7 | % | |||||||||||||||||||||||
Operating Income Guidance | Guidance Range for the Year Ending February 28, 2025 |
Actual for the Year Ended February 29, 2024 |
Percentage Change | ||||||||||||||||||||||||||
Operating income (GAAP) |
$ | 3,502 | $ | 3,567 | $ | 3,169.7 | 10 | % | 13 | % | |||||||||||||||||||
Comparable adjustments (Non-GAAP) (1) |
3 | 3 | 75.8 | ||||||||||||||||||||||||||
Comparable operating income (Non-GAAP) |
$ | 3,505 | $ | 3,570 | $ | 3,245.5 | 8 | % | 10 | % |
(1) |
Comparable adjustments include: (2) (3) |
Estimated for the Year Ending February 28, 2025 |
Actual for the Year Ended February 29, 2024 |
|||||||||||
Transition services agreements activity | $ | 20 | $ | 24.9 | ||||||||||
Flow through of inventory step-up | $ | 4 | $ | 3.6 | ||||||||||
Restructuring and other strategic business development costs | $ | 2 | $ | 46.3 | ||||||||||
Net (gain) loss on undesignated commodity derivative contracts |
$ | (15) | $ | 44.2 | ||||||||||
Settlements of undesignated commodity derivative contracts | $ | (9) | $ | (15.0) | ||||||||||
(Gain) loss on sale of business | $ | — | $ | 15.1 | ||||||||||
Other (gains) losses | $ | — | $ | 11.4 | ||||||||||
Transaction, integration, and other acquisition-related costs | $ | — | $ | 0.6 | ||||||||||
Insurance recoveries | $ | — | $ | (55.1) | ||||||||||
Costs associated with the reclassification, conversion, and exchange of our Class B Convertible Common Stock into our Class A Common Stock |
$ | — | $ | (0.2) | ||||||||||
(2) |
See page 12 for further information on comparable adjustments. |
|||||||||||||
(3) |
May not sum due to rounding. |
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 15 |
EPS Guidance | Range for the Year Ending February 28, 2025 | Actual for the Year Ended February 29, 2024 | |||||||||||||||
Forecasted EPS (GAAP) | $ | 14.63 | $ | 14.93 | $ | 9.39 | |||||||||||
Comparable adjustments (Non-GAAP) (1) |
(1.13) | (1.13) | 2.67 | ||||||||||||||
Comparable basis, Canopy EIE (Non-GAAP) | — | — | 0.32 | ||||||||||||||
Forecasted comparable EPS (Non-GAAP) (2) |
$ | 13.50 | $ | 13.80 | $ | 12.38 |
(1) |
Comparable adjustments include: (2)(3) |
Estimated for the Year Ending February 28, 2025 | Actual for the Year Ended February 29, 2024 | |||||||||||
Net income tax benefit recognized as a result of the resolution of various tax examinations and assessments related to prior periods | $ | (0.66) | $ | — | ||||||||||
(Income) loss from unconsolidated investments | $ | (0.46) | $ | 2.58 | ||||||||||
Net (gain) loss on undesignated commodity derivative contracts | $ | (0.06) | $ | 0.18 | ||||||||||
Settlements of undesignated commodity derivative contracts | $ | (0.03) | $ | (0.06) | ||||||||||
Net income tax benefit recognized for adjustments to valuation allowances |
$ | (0.02) | $ | — | ||||||||||
Transition services agreements activity | $ | 0.08 | $ | 0.10 | ||||||||||
Flow through of inventory step-up | $ | 0.02 | $ | 0.01 | ||||||||||
Restructuring and other strategic business development costs | $ | 0.01 | $ | 0.20 | ||||||||||
(Gain) loss on sale of business |
$ | — | $ | 0.06 | ||||||||||
Other (gains) losses | $ | — | $ | 0.06 | ||||||||||
Loss of interest income on write-off of a convertible note |
$ | — | $ | 0.01 | ||||||||||
Insurance recoveries |
$ | — | $ | (0.25) | ||||||||||
Net income tax benefit recognized as a result of a change in tax entity classification | $ | — | $ | (0.17) | ||||||||||
Net income tax benefit recognized as a result of a legislative update in Switzerland |
$ | — | $ | (0.05) | ||||||||||
(2) |
May not sum due to rounding as each item is computed independently. The comparable adjustments and comparable EPS are calculated on a fully dilutive basis. |
|||||||||||||
(3) |
See page 12 for further information on comparable adjustments. |
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 16 |
Free Cash Flow Guidance
Free cash flow, as defined in the reconciliation below, is considered a liquidity measure and is considered to provide useful information to investors about the amount of cash generated, which can then be used, after required debt service and dividend payments, for other general corporate purposes. A limitation of free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. Free cash flow should be considered in addition to, not as a substitute for, or superior to, cash flow from operating activities prepared in accordance with GAAP.
| |||||||||||
Range for the Year Ending February 28, 2025 |
|||||||||||
Net cash provided by operating activities (GAAP) | $ | 2,800 | $ | 3,000 | |||||||
Purchase of property, plant, and equipment | (1,400) | (1,500) | |||||||||
Free cash flow (Non-GAAP) | $ | 1,400 | $ | 1,500 | |||||||
Three Months Ended | |||||||||||
May 31, 2024 |
May 31, 2023 |
||||||||||
Net cash provided by operating activities (GAAP) | $ | 690.5 | $ | 665.4 | |||||||
Purchase of property, plant, and equipment | (375.3) | (277.0) | |||||||||
Free cash flow (Non-GAAP) | $ | 315.2 | $ | 388.4 |
Constellation Brands, Inc. Q1 FY 2025 Earnings Release |
#WORTHREACHINGFOR I 17 |