WASHINGTON (dpa-AFX) - Constellation Brands Inc. (STZ), a beverage alcohol company, reported a loss for the for the fourth-quarter of fiscal year 2025 compared to profit in the prior year. The company announced the divestiture of its remaining mainstream wine brands and restructuring initiatives aimed at generating over $200 million in net annualized cost savings by fiscal 2028. The company has also issued its fiscal 2026 outlook and updated projections for fiscal 2027 and fiscal 2028, including a new three-year, $4 billion share repurchase authorization.
Constellation Brands reported that its net loss attributable to the company for the fourth-quarter of fiscal year 2025 was $375.3 million or $2.09 per share compared to net income of $392.4 million or $2.14 per share in the prior year.
Comparable earnings per share for the fourth quarter improved to $2.63 from $2.30 last year.
Net sales for the fourth quarter increased to $2.164 billion from $2.139 billion in the prior year.
The fourth quarter's Wine and Spirits organic net sales increased over 11% driven by contractual distributor payments, favorable product mix and volume growth across its U.S. wholesale business, and higher volume growth from international markets, mainly driven by Canada.
Looking ahead for fiscal 2026, the company expects earnings per share to be in the range of $12.33 - $12.63 and comparable earnings per share of $12.60 - $12.90, as well as operating cash flow target of $2.7 billion - $2.8 billion and free cash flow projection of $1.5 billion - $1.6 billion, inclusive of the separately announced Wine and Spirits divestiture and restructuring actions. Analysts expect the company to report earnings of $13.94 per share for fiscal year 2026. Analysts' estimates typically exclude special items.
The company projects earnings per share growth of mid-single digit to low-double digit for fiscal 2027.
For fiscal 2028, the company anticipates earnings per share growth of low-single digit to mid single digit, as well as cumulative operating cash flow and free cash flow projections of over $6 billion and over $5 billion.
The company said it had approximately 48 million hectoliters of capacity across its existing facilities in Mexico at the end of fiscal 2025. From fiscal 2026 to fiscal 2028, the company expects approximately $2 billion of capital expenditures primarily to continue the modular development of its third brewery site at Veracruz and other additions at existing facilities in Mexico.
By the end of fiscal 2028, the company expects to increase its capacity in Mexico to approximately 55 million hectoliters to support the anticipated growth of its high-end beer brands.
The company declared a quarterly cash dividend of $1.02 per share of Class A Common Stock payable on May 15, 2025, to stockholders of record as of the close of business on April 29, 2025.
In a separate press release, Constellation Brands announced that it has signed an agreement with The Wine Group to divest primarily mainstream wine brands and related vineyards and facilities from its wine portfolio. The transaction is expected to close immediately following the end of Constellation's first quarter of its fiscal year 2026.
Brands to be divested to The Wine Group include Woodbridge, Meiomi, Robert Mondavi Private Selection, Cook's, SIMI, and J. Rogét sparkling wine, along with associated inventory, facilities, and vineyards.
Constellation noted that its retained wine portfolio will consist of a collection of highly regarded wines from top regions around the world, predominantly priced $15 and above.
The company said it is undergoing a review of its organizational structuring. This review is anticipated to deliver net annualized cost savings in excess of $200 million by fiscal year 2028. The company expects the majority of this work to be completed within its fiscal year 2026.
For more earnings news, earnings calendar, and earnings for stocks, visit rttnews.com.
Copyright(c) 2025 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2025 AFX News
