Constellation Brands Misses on the Top and Bottom Lines

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Constellation Brands (NYS: STZ) reported earnings on Jan. 5. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Nov. 30 (Q3), Constellation Brands missed on revenues and missed on earnings per share.

Compared to the prior-year quarter, revenue shrank significantly, and earnings per share dropped significantly.

Margins improved across the board.

Revenue details
Constellation Brands reported revenue of $701 million. The seven analysts polled by S&P Capital IQ expected revenue of $720 million. Sales were 27% lower than the prior-year quarter's $966 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.50. The 11 earnings estimates compiled by S&P Capital IQ averaged $0.52 per share on the same basis. GAAP EPS of $0.52 for Q3 were 20% lower than the prior-year quarter's $0.65 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 40.4%, 390 basis points better than the prior-year quarter. Operating margin was 23.0%, 450 basis points better than the prior-year quarter. Net margin was 15.0%, 60 basis points better than the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $625 million. On the bottom line, the average EPS estimate is $0.38.

Next year's average estimate for revenue is $2.6 billion. The average EPS estimate is $2.05.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 305 members out of 334 rating the stock outperform, and 29 members rating it underperform. Among 94 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 91 give Constellation Brands a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Constellation Brands is outperform, with an average price target of $22.80.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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