Summary by Moomoo AI
Constellation Brands has updated its fiscal 2025 outlook, projecting enterprise net sales growth of 4-6% and comparable EPS of $13.60-$13.80. The company expects to recognize a non-cash goodwill impairment loss of $1.5-2.5 billion in Q2 FY25 for its Wine and Spirits segment, reflecting continued negative trends in the U.S. wholesale market.The Beer segment maintains strong performance with projected net sales growth of 6-8% and increased operating income growth of 11-12%. However, the Wine and Spirits segment faces challenges, with expected net sales decline of 6-4% and operating income decline of 18-16%. The company cites macroeconomic headwinds, particularly rising unemployment, affecting consumer demand.Despite near-term challenges, Constellation remains confident in delivering double-digit comparable EPS growth. The company continues to execute its capital allocation strategy, including achieving a ~3.0x net leverage ratio target, returning cash to shareholders through dividends and share repurchases ($449 million executed in H1), and advancing brewery investments in its Beer Business.
