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• Beer Business Net Sales Growth: 4% to 7% expected for fiscal '25.

• Beer Business Operating Income Growth: 9% to 12% expected for fiscal '25.

• Beer Business Operating Margin: Approximately 39% expected for fiscal '25.

• Comparable EPS: $3.25 for Q3 fiscal '25.

• Enterprise Net Sales Growth: 2% to 5% expected for fiscal '25.

• Enterprise Operating Income Growth: 6% to 9% expected for fiscal '25.

• Wine and Spirits Net Sales Decline: 5% to 8% expected for fiscal '25.

• Wine and Spirits Operating Income Decline: 17% to 19% expected for fiscal '25.

• Free Cash Flow: $1.6 billion to $1.8 billion expected for fiscal '25.

• Net Leverage Ratio: 2.9 times in Q3 fiscal '25.

• Shareholder Returns: $220 million in share repurchases and over $180 million in dividends in Q3 fiscal '25.

• Marketing Expense for Beer Business: Approximately 8.5% of net sales expected for fiscal '25.

• Interest Expense: $410 million expected for fiscal '25.

• Comparable Effective Tax Rate: Approximately 18.5% expected for fiscal '25.

• Warning! GuruFocus has detected 3 Warning Signs with WDFC.

Release Date: January 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Constellation Brands Inc (NYSE:STZ) reported growth in consumer demand for its beer portfolio, with depletions growing by 3.2% in Q3, an acceleration from the previous quarter.

• The company achieved dollar sales growth outpacing the total CPG sector, maintaining its position as a CPG growth leader for nearly 12 years.

• Modelo Especial continued to be a top share gainer in US tracked channels, with a significant growth runway ahead in terms of awareness, distribution, and household penetration.

• Constellation Brands Inc (NYSE:STZ) maintained a strong capital allocation strategy, returning nearly $220 million to shareholders through share repurchases and over $180 million in dividends in Q3.

• The company reported a higher proportion of dollar sales from new legal drinking age consumers, particularly 21 to 24-year-olds, indicating strong brand appeal among younger demographics.

Negative Points

• Constellation Brands Inc (NYSE:STZ) faced softer consumer demand due to macroeconomic headwinds, impacting the overall growth rate of its beer business.

• The company adjusted its fiscal '25 beer business net sales growth outlook to 4% to 7%, reflecting uncertainty in consumer spending behaviors.

• Wine and spirits shipments declined by 16% year over year, driven by ongoing consumer demand headwinds and retailer inventory destocking.

• The company faced competitive pricing pressures in the high-end light beer segment, particularly affecting large pack formats.

• Constellation Brands Inc (NYSE:STZ) reported a decline in operating income for its wine and spirits business, with net sales and operating income expected to decline by 5% to 8% and 17% to 19%, respectively, for fiscal '25.