Constellation Brands, Inc ( STZ ). shares are trading higher on Tuesday.

Constellation Brands ( STZ ) has revised its FY25 comparable EPS forecast to $13.60 – $13.80, compared to the previous forecast of $13.50 – $13.80. This is compared to the $13.70 estimate.

Constellation Brands ( STZ ) projects FY25 reported EPS in the range of $3.05 – $7.92, down from the previous forecast of $14.63 – $14.93 and well below the $14.62 estimate.

The company anticipates a hefty non-cash goodwill impairment loss of around $1.5 billion to $2.5 billion for its Wine and Spirits division in the second quarter of fiscal 2025, which is factored into the revised reported EPS outlook.

The company also revised its Enterprise net sales growth forecast to 4% – 6% (from 6% – 7% prior), citing incremental macroeconomic headwinds affecting consumers, particularly unemployment and prolonged inventory destocking in wine and spirits markets.

The company updated Beer net sales growth to 6% – 8% (from 7% – 9% prior) and Wine and Spirits net sales outlook to (6)% – (4)% (from (0.5)% – 0.5% prior).

“While ongoing macroeconomic headwinds, particularly rising unemployment, have led to a recent deceleration in the rate of growth of consumer demand for our products, we are on track to deliver a solid mid single-digit volume increase this fiscal year for our Beer Business,” said Constellation Brands ( STZ ) President and Chief Executive Officer Bill Newlands.

“These trends have been most notable in the top five states for our Beer Business, which account for just over half of our volumes; however, we continue to see volume growth within the low to mid single-digit range in these states and within the high single-digit range on average across the rest of the country.”

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The CEO noted that improvements from earlier initiatives benefit major brands in the Wine and Spirits sector, although category challenges continue to impact the fiscal year outlook.

Despite these challenges, the company has outpaced the CPG sector growth by nearly 3 percentage points in dollar sales and its Beer Business has achieved notable gains, including being the top dollar share gainer in its category and the third largest in the Beverage industry.

RBC Capital analyst Nik Modi reaffirms Constellation Brands ( STZ ) with an Outperform rating and maintains a $308 price target.

Price Action: STZ shares are sharing higher by 3.08% to $248.12 at last check Tuesday.

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