Constellation Brands Crushes Earnings Estimates

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

The 10-second takeaway
For the quarter ended Feb. 29 (Q4), Constellation Brands met expectations on revenues and crushed expectations on earnings per share.

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


Gross margins increased, operating margins expanded, and net margins dropped.

Revenue details
Constellation Brands booked revenue of $628 million. The seven analysts polled by S&P Capital IQ predicted sales of $626.4 million on the same basis. GAAP reported sales were 12% lower than the prior-year quarter's $715.3 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.69. The 11 earnings estimates compiled by S&P Capital IQ predicted $0.38 per share on the same basis. GAAP EPS of $0.51 for Q4 were 57% lower than the prior-year quarter's $1.19 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 39.2%, 360 basis points better than the prior-year quarter. Operating margin was 17.8%, 330 basis points better than the prior-year quarter. Net margin was 16.4%, 2,270 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $648.6 million. On the bottom line, the average EPS estimate is $0.39.

Next year's average estimate for revenue is $2.76 billion. The average EPS estimate is $1.99.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 322 members rating the stock outperform and 28 members rating it underperform. Among 93 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 91 give Constellation Brands a green thumbs-up, and two 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 $23.20.

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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