11:17 AM EDT, 04/11/2024 (MT Newswires) -- Constellation Brands ( STZ ) reported stronger-than-expected growth in fiscal fourth-quarter results on Thursday while guiding for earnings expansion in the ongoing year amid strong performance in its beer business.

Revenue increased to $2.14 billion for the three months ended Feb. 29 from $2 billion the year earlier and topped the $2.1 billion average analyst estimate on Capital IQ.

Constellation Brands ( STZ ) reported a sales increase of 11% to $1.7 billion in its beer business and depletion growth of 8.9%. Depletions represent US distributor shipments to retail customers. Depletions rose 14% at Modelo Especial, 1% at Corona Extra and 22% at Pacifico. Constellation owns the brand license for Corona and Modelo in the US.

"Our beer business continued its strong growth momentum as it achieved its 56th consecutive quarter of volume growth while maintaining best-in-class margins," Chief Executive Bill Newlands said in a statement. "These results were driven by sustained growth of our industry-leading beer brands that continue to gain share."

Fourth-quarter adjusted earnings per share advanced to $2.26 from $1.98 a year earlier and beat the Street's view of $2.10. Operating margin for the beer division increased 30 basis points to 34.4%, buoyed by cost-saving initiatives and favorable pricing, partially offset by higher packaging and raw material expenses.

In Constellation's wine and spirits business, sales dropped 6% to $436.4 million on a 4.6% decline in depletions. The company attributed the weakness to "unfavorable marketplace dynamics" that continued to pressure volumes, particularly for the largest premium brands.

Constellation Brands ( STZ ) guided for adjusted EPS in the range of $13.50 to $13.80 for fiscal 2025, implying growth from $12.06 reported for the company's fiscal 2024. The market view is for normalized EPS of $13.43 in the ongoing year. It expects free cash flow to potentially moderate further to between $1.4 billion and $1.5 billion after declining 12% to $1.51 billion last year.

"As we head into fiscal (2025), we remain confident and excited about the growth trajectory of our beer portfolio," Newlands said. "We continue to see growth potential in our wine and spirits business as we focus on strong commercial and operational execution."

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