Constellation Brands Cuts Outlook on U.S. Wine Market Woes
By Don Nico Forbes
Constellation Brands cut its earnings outlook due to an impairment for the Wine & Spirits business, as negative trends in the U.S. wine market continue.
The producer of beer, wine and spirits said it now expects earnings per share of $3.05 to $7.92 for fiscal 2025, down from prior expectations of between $14.63 and $14.93.
The company attributed the cut to a non-cash goodwill impairment loss for the Wine and Spirits business of approximately $1.5 billion to $2.5 billion for its fiscal second quarter.
"The impairment reflects the company's updated expectations of its fiscal 2025 outlook for its Wine and Spirits business due to continued negative trends primarily in its U.S. wholesale market, driven by declines in both the overall wine market and its mainstream and premium wine brands," Constellation Brands said.
On a comparable basis, the company raised the lower end of EPS guidance, now expecting between $13.60 and $13.80, from $13.50 and $13.80 previously.
Constellation Brands also cut its sales growth expectations for its Enterprise, Beer and Wine & Spirits divisions. Enterprise growth is now seen at 4% to 6% for the fiscal year, down from 6% to 7%. Net sales in the Beer business are anticipated at 6% to 8%, down from 7% to 9%. Meanwhile, Wine & Spirits sales are expected to contract by 6% to 4%, compared with a prior range of a 0.5% contraction to 0.5% growth.
Write to Don Nico Forbes at don.forbes@wsj.com
(END) Dow Jones Newswires
September 03, 2024 09:48 ET (13:48 GMT)
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