Constellation Brands Inc (NYSE:STZ)., a leading beverage company, saw its stock decline by over 3% on Thursday, despite surpassing expectations with its second-quarter results. The dip in shares is attributed to the company's future guidance, which investors found less than inspiring.
The company reported a robust net income of $690 million and sales totaling $2.837 billion for the second quarter. This was driven by strong beer sales that rose 12% and an 8.7% increase in shipments. Modelo Especial, one of the company's popular brands, saw its sales rise nearly 9%.
Constellation Brands has a track record of steady growth, having raised its dividend for 8 consecutive years, a fact highlighted by InvestingPro Tips. The company also boasts a high return over the last decade. Yet, its revenue growth has been slowing down recently, which might be a concern for potential investors.
Despite these positive figures, Constellation Brands faced challenges with the impact of Canopy Growth (NASDAQ:CGC) and declining wine and spirits sales. The company managed to raise its fiscal 2024 guidance and improve depletion volume. It also managed to significantly reduce the share of losses from Canopy Growth. This aligns with the InvestingPro Tips prediction that the company's net income is expected to grow this year.
InvestingPro Data shows that the company's market capitalization stands at $44.23B USD, with a negative P/E ratio of -141.62, indicating it was not profitable over the past year. However, six analysts have revised their earnings upwards for the upcoming period, and they predict the company will be profitable this year.
So far this year, Constellation Brands' stock has seen a 4% gain. It has underperformed when compared to the S&P 500's 11% rise. Yet, the company's stock generally trades with low price volatility, as noted by InvestingPro Tips. Over the last six months, the company has seen a 13.42% total return on its stock price, according to InvestingPro Data.
For more insightful tips on Constellation Brands and other companies, InvestingPro offers a wealth of information, including real-time metrics and expert analysis.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.