Constellation Brands, Inc. (NYSE:STZ) stock rose 0.82% (As on October 4, 11:21:27 AM UTC-4, Source: Google Finance) after the company beat second-quarter earnings estimates, as robust demand for its popular beer brands helped soften the hit from a slump in its wines and spirits business. The company has seen persistent demand in the beer segment, its major revenue driver, as consumers continued to spend on its light-bodied beer categories of Modelo Especial and Pacifico varieties. Strong beer sales, up 6% driven by a 4.6% increase in shipment volumes, were offset by weakness in wine and spirits, which decreased 12% driven by a 9.8% decrease in shipment volumes. The Wine and Spirits business is progressing with commercial and operational initiatives aimed at improving sequential net sales and operating income in the third quarter and fourth quarter of fiscal 2025.

STZ in the second quarter of FY 25 has reported the adjusted earnings per share of $4.32, beating the analysts’ estimates for the adjusted earnings per share of $4.08, according to data compiled by LSEG. The company reported a loss per share of $6.59, including a non-cash goodwill impairment loss for the Wine and Spirits business of $2.25 billion. The company had reported the adjusted revenue growth of 3 percent to $2.92 billion in the second quarter of FY 25, missing the analysts’ estimates for revenue of $2.95 billion.

Additionally, the company has declared a quarterly cash dividend of $1.01 per share for Class A Common Stock. The dividend will be payable on November 21 to stockholders of record as of the close of business on November 5.

Looking ahead, the company nudged up its adjusted profit outlook but trimmed its view on sales growth, amid continued weakness in wine and spirits. The company said it continues to expect a net decline between 4% and 6% and an operating income decline of 16% to 18% for its wine and spirits business for fiscal 2025. Beer segment net sales growth projected at 6% to 8% for the fiscal year. Operating income growth for Beer expected to be between 11% to 12%. Constellation Brands affirmed recently updated FY25 adjusted EPS forecast of $13.60 – $13.80, compared to the $13.69 estimate.

Newland said “the current macroeconomic environment has weighed on beverage alcohol,” as well as on the broader consumer packaged goods market, but the company continued to outperform the industry and remained the top market-share gainer in the beer business.