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Can Constellation (STZ) Beat Q2 Earnings on Segmental Gains?
Can Constellation (STZ) Beat Q2 Earnings on Segmental Gains?
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Constellation Brands, Inc. STZ is scheduled to release second-quarter fiscal 2024 results on Oct 5, 2023. 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 second-quarter earnings is pegged at $3.38 per share, indicating 6.6% 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 $2.85 billion, suggesting a 7.3% increase from the prior-year quarter’s reported figure.In the last reported quarter, the alcohol behemoth delivered an earnings surprise of 2.8%. Its bottom line beat estimates by 4.4%, on average, over the trailing four quarters.Constellation Brands Inc Price and EPS Surprise Constellation Brands Inc price-eps-surprise | Constellation Brands Inc QuoteKey Factors to NoteConstellation Brands has been witnessing momentum due to strength in its beer portfolio, with the 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 the accelerated growth of Power Brands.Constellation Brands’ second-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 the 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.Our model estimates sales growth of 5% for the Beer business and 12.6% for the wine & spirits business in the fiscal second quarter.However, Constellations Brands’ margins have been witnessing the impacts of ongoing inflation. As part of this, the company has been witnessing higher pack...