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Factors Influencing Constellation Brands' (STZ) Q4 Earnings

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Constellation Brands, Inc. (STZ - Free Report) is scheduled to release fourth-quarter fiscal 2022 results on Apr 7, 2022. The alcoholic beverage bigwig is expected to deliver top and bottom-line growth in the to-be-reported quarter.

The Zacks Consensus Estimate for the company’s fiscal fourth-quarter earnings is pegged at $2.16, indicating 18.7% growth from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days. The consensus mark for revenues is pegged at $2.02 billion, suggesting a 3.2% increase from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for the company’s fiscal 2022 earnings is pegged at $10.09, indicating 1.2% growth from the year-ago quarter’s reported figure. Meanwhile, the consensus mark for revenues is pegged at $8.73 billion, suggesting a 1.4% increase from the prior-year quarter’s reported figure.

In the last reported quarter, the alcohol behemoth delivered an earnings surprise of 15.6%. Also, its bottom line beat estimates by 5.6%, on average, over the trailing four quarters.

Constellation Brands Inc Price and EPS Surprise

 

Constellation Brands Inc Price and EPS Surprise

Constellation Brands Inc price-eps-surprise | Constellation Brands Inc Quote

Key Factors to Note

Constellation Brands has been gaining from continued growth in the beer business and robust consumer demand for its iconic brands. Notably, The Modelo Especial emerged as the number 1 beer brand, thus strengthening its leadership position in the high-end category. Such upsides are likely to have boosted the top line in the quarter under review.

The company’s wine & spirits premiumization strategy has been playing out well, as evident from the accelerated growth rates for Power Brands. The high-end Power Brands, including Kim Crawford, Meiomi and The Prisoner Brand Family, have been performing well. This, along with investments to fuel growth of its Power Brands through innovation and successful product introductions, is anticipated to have aided the segment’s organic sales in the fiscal fourth quarter.

On its last reported quarter’s earnings call, management expected fiscal 2022 earnings per share to be $10.50-$10.65, on a comparable basis, excluding the Canopy business. The company predicted net sales growth of 10-11% for the beer segment. It projected operating income growth of 6-7% for the beer business.

However, softness in the wine & spirits business is expected to have weighed on the fiscal fourth-quarter performance. Management, on its last reported quarter’s earnings call, anticipated the wine and spirits business’s sales to decline 21-22% and operating income to dip 23-25% for fiscal 2022.

Supply-chain headwinds are likely to have impacted its business. Due to higher commodity prices and inflationary pressure, elevated material costs are anticipated to have also acted as deterrents.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Constellation Brands this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Constellation Brands has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.

Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Hain Celestial (HAIN - Free Report) currently has an Earnings ESP of +5.26% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports third-quarter fiscal 2022. The Zacks Consensus Estimate for quarterly earnings has been unchanged in the past 30 days, indicating a 4.6% rise from the year-ago quarter’s reported number. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hain Celestial’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $527.7 million, which suggests a rise of 7.1% from the figure reported in the prior-year quarter. HAIN has delivered an earnings beat of 6.6%, on average, in the trailing four quarters.

Helen of Troy (HELE - Free Report) currently has an Earnings ESP of +2.49% and a Zacks Rank of 3. The Zacks Consensus Estimate for quarterly earnings moved north by 1% in the last 30 days to $2.01 per share, indicating growth of 28% from the year-ago quarter's reported number.

Helen of Troy’s top line is expected to have risen year over year. The Zacks Consensus Estimate for HELE’s quarterly revenues is pegged at $472.2 million, suggesting a decline of 7.3% from the figure reported in the prior-year quarter. HELE has delivered an earnings beat of 19.1%, on average, in the trailing four quarters.

Sysco (SYY - Free Report) currently has an Earnings ESP of +1.05% and a Zacks Rank of 3. The Zacks Consensus Estimate for quarterly earnings has been unchanged at 54 cents per share, implying 145.5% growth from the year-ago quarter’s reported number.

Sysco’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $16.1 billion, which suggests a rise of 35.9% from the figure reported in the prior-year quarter. SYY has delivered an earnings beat of 3.7%, on average, in the trailing four quarters.

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