The 10-second takeaway
For the quarter ended May 31 (Q1), Constellation Brands met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue increased. Non-GAAP earnings per share dropped. GAAP earnings per share contracted significantly.
Margins shrank across the board.
Constellation Brands tallied revenue of $673.0 million. The seven analysts polled by S&P Capital IQ expected revenue of $674.4 million on the same basis. GAAP reported sales were 6.1% higher than the prior-year quarter's $634.8 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 $0.38. The 11 earnings estimates compiled by S&P Capital IQ averaged $0.40 per share. Non-GAAP EPS of $0.38 for Q1 were 5.0% lower than the prior-year quarter's $0.40 per share. GAAP EPS of $0.29 for Q1 were 24% lower than the prior-year quarter's $0.38 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 38.3%, 130 basis points worse than the prior-year quarter. Operating margin was 15.4%, 190 basis points worse than the prior-year quarter. Net margin was 7.9%, 340 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.52 billion. On the bottom line, the average EPS estimate is $0.87.
Next year's average estimate for revenue is $4.91 billion. The average EPS estimate is $2.82.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 331 members out of 368 rating the stock outperform, and 37 members rating it underperform. Among 106 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 103 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 $55.73.
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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. The Motley Fool has no position in any of the stocks mentioned. 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.