The 10-second takeaway
For the quarter ended Nov. 30 (Q3), Constellation Brands missed on revenues and missed on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly, and earnings per share dropped significantly.
Margins improved across the board.
Constellation Brands reported revenue of $701 million. The seven analysts polled by S&P Capital IQ expected revenue of $720 million. Sales were 27% lower than the prior-year quarter's $966 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.50. The 11 earnings estimates compiled by S&P Capital IQ averaged $0.52 per share on the same basis. GAAP EPS of $0.52 for Q3 were 20% lower than the prior-year quarter's $0.65 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 40.4%, 390 basis points better than the prior-year quarter. Operating margin was 23.0%, 450 basis points better than the prior-year quarter. Net margin was 15.0%, 60 basis points better than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
What does the future hold?
Next quarter's average estimate for revenue is $625 million. On the bottom line, the average EPS estimate is $0.38.
Next year's average estimate for revenue is $2.6 billion. The average EPS estimate is $2.05.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 305 members out of 334 rating the stock outperform, and 29 members rating it underperform. Among 94 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 91 give Constellation Brands a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Constellation Brands is outperform, with an average price target of $22.80.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.