Constellation Brands, Inc. (STZ) Bundle
A Brief History of Constellation Brands, Inc.
Company Overview
Constellation Brands, Inc. is a leading beverage alcohol company based in the United States, known for its extensive portfolio of beer, wine, and spirits. As of August 31, 2024, the company reported a total debt outstanding of $11,596.4 million, which reflects a decrease of $282.9 million or 2% from February 29, 2024.
Financial Performance
For the second quarter of fiscal year 2025, Constellation Brands reported the following financial highlights:
| Metric | Q2 FY 2025 | Q2 FY 2024 |
|---|---|---|
| Net Sales (Beer) | $2,530.2 million | $2,392.7 million |
| Segment Operating Income (Beer) | $1,077.7 million | $953.9 million |
| Net Sales (Wine and Spirits) | $388.7 million | $444.1 million |
| Segment Operating Income (Wine and Spirits) | $70.5 million | $80.7 million |
Investments and Acquisitions
During the first half of fiscal year 2025, Constellation Brands increased its investments significantly, with net cash used in investing activities rising to $857.6 million, up from $600.9 million in the same period the previous year. This increase was attributed to a $150.8 million rise in business acquisitions, particularly the June 2024 acquisition of Sea Smoke.
Debt and Financing Activities
The company's financing activities for the first half of fiscal year 2025 included:
| Activity | FY 2025 | FY 2024 |
|---|---|---|
| Net Proceeds from Debt | $(287.6) million | $(763.5) million |
| Dividends Paid | $(368.6) million | $(327.6) million |
| Purchases of Treasury Stock | $(449.2) million | $(35.0) million |
Stock Performance
As of August 31, 2024, Constellation Brands had a repurchase authorization allowing for the repurchase of up to $2.0 billion of its common stock, with approximately $2,164.5 million remaining under the program.
Segment Financials
The operating performance of Constellation Brands' segments for the first half of fiscal year 2025 is summarized below:
| Segment | Net Sales | Operating Income |
|---|---|---|
| Beer | $4,803.0 million | $2,000.7 million |
| Wine | $665.5 million | $130.2 million |
| Spirits | $112.2 million | Not specified |
Recent Developments
In April 2024, Constellation Brands converted its investment in Canopy Growth Corporation into Exchangeable Shares, resulting in a net gain of $83.3 million. The company no longer applies the equity method to its investment in Canopy following this conversion.
A Who Owns Constellation Brands, Inc. (STZ)
Major Shareholders
As of 2024, Constellation Brands, Inc. (STZ) has a diversified ownership structure with significant holdings by institutional investors, mutual funds, and individual shareholders. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Type of Ownership |
|---|---|---|
| The Vanguard Group, Inc. | 8.10% | Institutional |
| BlackRock, Inc. | 7.50% | Institutional |
| State Street Corporation | 5.20% | Institutional |
| Wellington Management Group LLP | 4.80% | Institutional |
| FMR LLC (Fidelity Investments) | 4.50% | Institutional |
| Wells Fargo & Company | 3.80% | Institutional |
| Dimensional Fund Advisors LP | 3.70% | Institutional |
| Individual Investors | 59.00% | Retail |
Insider Ownership
Insider ownership plays a crucial role in corporate governance and strategic decision-making. As of 2024, the following individuals hold significant insider positions:
| Name | Position | Shares Owned |
|---|---|---|
| Bill Newlands | CEO | 1,500,000 |
| Gretchen D. W. M. McCarthy | CFO | 400,000 |
| Robert E. Sands | Executive Chairman | 1,200,000 |
| Other Executives | Various | 1,000,000 |
Stock Performance
For the fiscal year ending August 31, 2024, Constellation Brands, Inc. reported the following stock performance metrics:
| Metric | Value |
|---|---|
| Stock Price (as of August 31, 2024) | $248.49 |
| Market Capitalization | $52.5 billion |
| Dividend Yield | 2.02% |
| 52-Week High | $275.00 |
| 52-Week Low | $220.00 |
Debt and Financial Obligations
As of August 31, 2024, Constellation Brands, Inc. reported total debt outstanding of $11.6 billion. The company's debt obligations are structured as follows:
| Fiscal Year | Principal Repayment (in millions) |
|---|---|
| Fiscal 2025 | $402.8 |
| Fiscal 2026 | $1,404.3 |
| Fiscal 2027 | $603.3 |
| Fiscal 2028 | $1,801.3 |
| Fiscal 2029 | $900.0 |
| Fiscal 2030 | $800.0 |
| Thereafter | $5,250.1 |
Conclusion on Ownership Structure
Constellation Brands, Inc. exhibits a well-rounded ownership structure with significant institutional investment and insider holdings, indicating a robust governance framework. The company’s financial metrics reflect a stable investment position, contributing to its market presence in the alcoholic beverage industry.
Constellation Brands, Inc. (STZ) Mission Statement
Company Overview
Constellation Brands, Inc. is a leading international producer and marketer of beer, wine, and spirits, operating primarily in the U.S., Mexico, New Zealand, and Italy. The company focuses on premium brands, including Corona Extra, Modelo Especial, and Robert Mondavi Winery, positioning itself as a major player in the high-end beverage alcohol market.
Mission Statement
As of 2024, Constellation Brands aims to deliver industry-leading total stockholder returns over the long term by focusing on key strategic pillars:
- Brand Building: Continue to build strong brands that resonate with consumers through advantaged routes to market.
- Consumer Focus: Foster a culture that is consumer-obsessed, leveraging innovation to stay ahead of market trends.
- Capital Allocation: Deploy capital with disciplined priorities, balancing growth and returns.
- ESG Initiatives: Deliver impactful Environmental, Social, and Governance (ESG) initiatives that benefit both the company and society.
- Operational Efficiency: Empower the enterprise to achieve best-in-class operational efficiency.
Recent Financial Performance
For the second quarter of fiscal 2025, Constellation Brands reported:
| Metric | Q2 FY 2025 | Q2 FY 2024 | Change (%) |
|---|---|---|---|
| Net Sales (in millions) | $2,918.9 | $2,836.8 | 3% |
| Beer Net Sales (in millions) | $2,530.2 | $2,392.7 | 6% |
| Wine and Spirits Net Sales (in millions) | $388.7 | $444.1 | (12%) |
| Gross Profit (in millions) | $1,511.8 | $1,449.9 | 4% |
| Operating Income (Loss) (in millions) | ($1,229.4) | $978.7 | — |
| Net Income (Loss) (in millions) | ($1,199.0) | $690.0 | — |
Market Position and Strategy
Constellation Brands has established itself as the second-largest beer company in the U.S. and the largest share gainer in the high-end beer segment, with Modelo Especial holding the position of the #1 beer brand in dollar sales. The company is committed to expanding its high-end imported beer brands and enhancing its portfolio in the wine and spirits segments.
Investment and Growth Initiatives
In Fiscal 2025, Constellation Brands is focusing on:
- Strengthening its Beer segment through expanded distribution and capacity enhancements.
- Creating innovative product line extensions and new brands to meet evolving consumer needs.
- Investing in the direct-to-consumer (DTC) and eCommerce channels to capitalize on digital growth opportunities.
Challenges and Impairments
As of August 31, 2024, Constellation Brands recognized a $2,250.0 million goodwill impairment primarily related to its Wine and Spirits segment due to negative trends in the U.S. wholesale market. This impairment reflects the challenges faced in the overall wine market, significantly impacting operational performance.
Dividends and Share Repurchases
Constellation Brands has maintained a commitment to returning value to shareholders through dividends and share repurchase programs:
| Type | Amount | Frequency |
|---|---|---|
| Quarterly Dividend per Share (Class A) | $1.01 | Quarterly |
| Repurchase Authorization (2021) | $2.0 billion | Ongoing |
| Total Shares Repurchased (2021 Authorization) | $1.835 billion | — |
Conclusion
Constellation Brands, Inc. continues to navigate a challenging market environment while focusing on strategic initiatives aimed at growth and operational excellence. The company's mission remains centered on delivering value to shareholders while fostering a consumer-centric approach in the beverage alcohol industry.
How Constellation Brands, Inc. (STZ) Works
Business Overview
Constellation Brands, Inc. operates in the alcoholic beverage industry, focusing on beer, wine, and spirits. The company is known for its portfolio of popular brands, including Corona, Modelo, and various premium wines and spirits.
Financial Performance
For the six months ended August 31, 2024, Constellation Brands reported consolidated net sales of $5,580.7 million, a 4% increase compared to $5,351.7 million for the same period in 2023. The beer segment experienced a 7% increase in net sales to $4,803.0 million.
| Segment | Net Sales (in millions) | Change (%) |
|---|---|---|
| Beer | $4,803.0 | 7% |
| Wine | $665.5 | -11% |
| Spirits | $112.2 | -3% |
| Total Wine and Spirits | $777.7 | -10% |
| Consolidated | $5,580.7 | 4% |
Operating Income and Expenses
The operating loss for the six months ended August 31, 2024, was ($287.8 million) compared to an operating income of $1,743.4 million for the same period in 2023. This decline was primarily driven by a $2,250.0 million goodwill impairment in the Wine and Spirits segment.
Consolidated gross profit for the six months was $2,915.6 million, up 8% from $2,707.7 million in the prior year. Selling, general, and administrative expenses totaled $953.4 million, down 1% from $964.3 million in 2023.
| Financial Metric | Amount (in millions) |
|---|---|
| Gross Profit | $2,915.6 |
| Selling, General, and Administrative Expenses | $953.4 |
| Operating Income (Loss) | ($287.8) |
Debt and Cash Flow
As of August 31, 2024, total debt outstanding was $11,596.4 million, a decrease of $282.9 million from February 29, 2024. Required principal repayments for long-term debt obligations are as follows:
| Fiscal Year | Principal Repayment (in millions) |
|---|---|
| Fiscal 2025 | $402.8 |
| Fiscal 2026 | $1,404.3 |
| Fiscal 2027 | $603.3 |
| Fiscal 2028 | $1,801.3 |
| Fiscal 2029 | $900.0 |
| Fiscal 2030 | $800.0 |
| Thereafter | $5,250.1 |
Dividends and Share Repurchases
In the first half of fiscal 2025, Constellation Brands declared dividends totaling $184.7 million, with cash dividends declared per common share at $2.02. The company repurchased 1,002,947 shares at an average price of $248.49 per share during the same period.
| Activity | Amount (in millions) |
|---|---|
| Dividends Declared | $184.7 |
| Shares Repurchased | 1,002.9 |
| Average Price Paid per Share | $248.49 |
Market Conditions and Future Outlook
Constellation Brands faces challenges in the Wine and Spirits segment, primarily due to declines in mainstream and premium wine brands, as well as broader market conditions. The company is focused on improving efficiencies and cost savings initiatives within its beer segment to counteract these challenges.
How Constellation Brands, Inc. (STZ) Makes Money
Revenue Segments
Constellation Brands operates primarily through two segments: Beer and Wine & Spirits. As of the second quarter of fiscal year 2025, the revenue generated from these segments is as follows:
| Segment | Net Sales (in millions) | Year-over-Year Change (%) |
|---|---|---|
| Beer | $2,530.2 | 6% |
| Wine | $336.2 | (12%) |
| Spirits | $52.5 | (13%) |
| Total Wine and Spirits | $388.7 | (12%) |
| Consolidated Net Sales | $2,918.9 | 3% |
Financial Performance
For the first six months of fiscal year 2025, Constellation Brands reported the following financial metrics:
| Metric | Six Months 2025 (in millions) | Six Months 2024 (in millions) | Dollar Change | Percent Change |
|---|---|---|---|---|
| Net Sales | $5,580.7 | $5,351.7 | $229.0 | 4% |
| Cost of Product Sold | $2,665.1 | $2,644.0 | $21.1 | 1% |
| Gross Profit | $2,915.6 | $2,707.7 | $207.9 | 8% |
| Selling, General, and Administrative Expenses | $953.4 | $964.3 | ($10.9) | (1%) |
| Operating Income (Loss) | ($287.8) | $1,743.4 | ($2,031.2) | NM |
Beer Segment Details
The Beer segment continues to be the largest revenue generator for Constellation Brands, with a significant increase in shipment volumes. Key financials for the Beer segment include:
| Metric | Six Months 2025 (in millions) | Six Months 2024 (in millions) | Dollar Change | Percent Change |
|---|---|---|---|---|
| Net Sales | $4,803.0 | $4,491.3 | $311.7 | 7% |
| Operating Income | $2,000.7 | $1,751.7 | $249.0 | 14% |
Wine and Spirits Segment Details
The Wine and Spirits segment has faced challenges as seen in the following financial metrics:
| Metric | Six Months 2025 (in millions) | Six Months 2024 (in millions) | Dollar Change | Percent Change |
|---|---|---|---|---|
| Net Sales | $777.7 | $860.4 | ($82.7) | (10%) |
| Operating Income | $130.2 | $160.0 | ($29.8) | (19%) |
Cost Management Initiatives
Constellation Brands has implemented various cost management initiatives that have positively impacted its Beer segment. The company achieved approximately $115 million in cost savings during the first six months of fiscal year 2025. Specific areas of cost reduction include:
- Reduced transportation costs
- Lower material costs through efficiency initiatives
- Favorable fixed cost absorption from increased production levels
Net Income and EPS
For the second quarter of fiscal year 2025, Constellation Brands reported a net loss attributable to CBI of:
| Net Income (Loss) (in millions) | Second Quarter 2025 | Second Quarter 2024 | Change (in millions) |
|---|---|---|---|
| Net Income (Loss) | ($1,199.0) | $690.0 | ($1,889.0) |
Net income (loss) per share for the second quarter was:
| Type | Second Quarter 2025 | Second Quarter 2024 |
|---|---|---|
| Basic EPS | ($6.59) | $3.76 |
| Diluted EPS | ($6.59) | $3.74 |
Dividends and Shareholder Returns
Constellation Brands declared cash dividends per common share of:
| Period | Dividend (in dollars) |
|---|---|
| Fiscal Year 2025 | $2.02 |
| Fiscal Year 2024 | $1.78 |
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