Constellation Brands reports 5.8% revenue growth driven by strong beer sales 

USA – Constellation Brands has reported a 5.8 percent year-over-year surge in revenue to US$2.66 billion, driven by strong demand for its core beer brands.  

The growth in beer sales helped offset the sluggish performance of the company’s wines and spirits business. 

The beer segment saw an 8.3 percent rise in sales to US$2.27 billion. This increase was driven by a 7.6 percent gain in shipment volumes and cost-saving initiatives.  

Core beer brands, including Modelo Especial and Pacifico, continued to experience persistent demand, resulting in a 6.4 percent depletion in volume growth, compared to a 5.5 percent growth last year. 

The company benefited from aggressive price hikes over recent quarters, lower marketing expenses, and sustained sales growth. As a result, Constellation’s operating margin in its beer business rose by 260 basis points to 40.6 percent. 

Constellation Brands reported a comparable profit of US$3.57 per share surpassing analysts’ estimates of US$3.46 per share, according to LSEG data.  

The company’s wines and spirits segment faced challenges, with sales declining 7 percent to US$389 million and shipment volumes slipping by 5.1 percent.  

Constellation attributed these declines to challenging market conditions in the U.S. wholesale channel across most price segments in the wine category. 

Despite the downturn in its wines and spirits business, Constellation Brands remains optimistic about its future prospects.  

From fiscal 2025 to fiscal 2028, the company expects approximately US$3 billion in capital expenditures to continue the development of modular additions at existing facilities in Mexico and its third brewery site in Veracruz. 

The Wine and Spirits Business reaffirmed its outlook for fiscal 2025, projecting a net sales decline of 0.5 percent to growth of 0.5 percent and an operating income decline of 9-11 percent.  

Bill Newlands, President and CEO of Constellation Brands, stated: “Our beer business continued to achieve strong volume growth well above that of its category and total beverage alcohol. This outstanding performance supported the second-largest dollar share gain within the broader beverage industry and reinforced our significant growth outperformance relative to the entire CPG sector.  

Our Wine and Spirits Business is making good progress against the operational and commercial execution initiatives identified in Q4 of Fiscal ’24 to support its trajectory toward this year’s guidance. All in, we continue to make progress and remain focused on our Fiscal ’25 outlook.”