What's in Store for Constellation Brands' (STZ) Q3 Earnings?
Constellation Brands, Inc. STZ is scheduled to release third-quarter fiscal 2024 results on Jan 5, 2024. The alcoholic beverage bigwig is expected to deliver top and bottom-line growth in the to-be-reported quarter.
The Zacks Consensus Estimate for the company’s fiscal third-quarter earnings is pegged at $3.04 per share, indicating 7.4% growth from the year-ago quarter’s reported figure. The consensus mark has moved up by a penny in the past seven days. The consensus mark for revenues is pegged at $2.55 billion, suggesting a 4.7% increase from the prior-year quarter’s reported figure.
In the last reported quarter, the alcohol behemoth delivered an earnings surprise of 9.5%. Its bottom line beat estimates by 4.3%, 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 has been witnessing momentum due to strength in its beer portfolio, with continued robust performances of Modelo Especial, the Modelo Chelada brands, Corona Extra, Pacifico and Modelo Oro. The company’s premiumization strategy has been playing out well, as evidenced by accelerated growth of Power Brands.
Constellation Brands’ third-quarter fiscal 2024 performance is expected to have gained from continued growth in the beer business and the robust consumer demand for its portfolio of premium, high-end products. The beer segment has also been witnessing gains from premiumization, driven by growth in traditional beer, as well as the flavor 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.
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, has been a key growth driver.
The Zacks Consensus Estimate for fiscal third-quarter sales is pegged at $2,002 million for the Beer business and $552 million for the wine & spirits business.
However, Constellations Brands’ margins have been witnessing the impacts of ongoing inflation. As part of this, the company has been witnessing higher packaging and raw material costs, which are likely to have persisted in the fiscal third quarter. Also, increased depreciation and operating costs from brewery capacity expansions have been acting as deterrents. Higher overhead costs related to its brewery expansion and increased logistics costs related to higher shipment volumes are also expected to have weighed on margins.
Zacks Model
Our proven model conclusively predicts an earnings beat for Constellation Brands this time around. 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 +0.98%.
Other Stocks With Favorable Combination
Here are some other companies that you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat this time around:
Philip Morris International PM currently has an Earnings ESP of +6.25% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports fourth-quarter 2023 results. The Zacks Consensus Estimate for PM’s quarterly earnings has been unchanged in the past 30 days at $1.48 per share. The consensus mark indicates 6.5% growth from the year-ago quarter’s reported number. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Philip Morris’ quarterly revenues is pegged at $8.9 billion, which suggests growth of 9.5% from the figure reported in the prior-year quarter. PM delivered an earnings beat of 5.8%, on average, in the trailing four quarters.
Mondelez International MDLZ currently has an Earnings ESP of +1.52% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports fourth-quarter 2023 results. The Zacks Consensus Estimate for MDLZ’s quarterly earnings was unchanged in the last 30 days at 76 cents per share. The consensus estimate indicates 4.1% earnings growth from the year-ago quarter's reported number.
The Zacks Consensus Estimate for Mondelez’s quarterly revenues is pegged at $9.2 billion, suggesting growth of 6% from the figure reported in the prior-year quarter. MDLZ has delivered an earnings surprise of 7.3%, on average, in the trailing four quarters.
Colgate-Palmolive CL currently has an Earnings ESP of +2.12% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports fourth-quarter 2023 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $4.9 billion, which suggests a rise of 5.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for quarterly earnings has been unchanged at 85 cents per share in the past 30 days. However, the consensus mark for CL’s earnings indicates growth of 10.4% from the year-ago quarter’s reported number. CL has delivered an earnings surprise of 3.6%, on average, in the trailing four quarters.
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Philip Morris International Inc. (PM) : Free Stock Analysis Report
Colgate-Palmolive Company (CL) : Free Stock Analysis Report
Constellation Brands Inc (STZ) : Free Stock Analysis Report
Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report
