The 10-second takeaway
For the quarter ended Aug. 31 (Q2), Constellation Brands missed slightly on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue increased slightly and GAAP earnings per share shrank.
Margins dropped across the board.
Constellation Brands recorded revenue of $699.0 million. The six analysts polled by S&P Capital IQ looked for revenue of $710.1 million on the same basis. GAAP reported sales were 1.2% higher than the prior-year quarter's $690.2 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.71. The 10 earnings estimates compiled by S&P Capital IQ predicted $0.54 per share. GAAP EPS of $0.70 for Q2 were 7.9% lower than the prior-year quarter's $0.76 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 40.8%, 20 basis points worse than the prior-year quarter. Operating margin was 18.7%, 270 basis points worse than the prior-year quarter. Net margin was 17.8%, 580 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $746.3 million. On the bottom line, the average EPS estimate is $0.56.
Next year's average estimate for revenue is $2.74 billion. The average EPS estimate is $2.07.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 324 members out of 359 rating the stock outperform, and 35 members rating it underperform. Among 105 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 100 give Constellation Brands a green thumbs-up, and five 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 $32.91.
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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. TMFDisclosureHere