Constellation Brands, Inc. (NYSE:STZ) stock rose 0.92% (As on April 11, 11:252:08 AM UTC-4, Source: Google Finance) after the company forecast annual profit above Wall Street expectations, and delivered a stronger-than-expected fourth-quarter profit, as its beer business outperformed its expectation. Demand across the company’s beer brands like Modelo Especial and Pacifico remained strong as consumers stretched their budgets even though living expenses persistently rise. The company’s beer business for the reported December-to-February quarter, saw a 8.9% depletion growth – the rate at which products are sold – compared with a growth of 6% last year. With the benefits arising from sales growth, price hikes, reduced marketing expenses and cost efficient initiatives, Constellation was able to counter higher packaging and raw material and costs. Modelo Especial saw 14% depletion growth and Pacifico saw 22% depletion growth. The company, which also makes spirits including Mi Campo tequila and wines like The Prisoner, saw the operating margin of its beer business rise by 30 basis points to 34.4%. However, the company’s quarterly net sales declined 6% in its wines and spirits business as wholesalers across international markets cut back on orders for its high-priced premium brands. Constellation reported fiscal fourth-quarter net income of $392.4 million, or $2.14 a share, up from $223.0 million, or $1.21 a share, in the year-earlier period.

STZ in the fourth quarter of FY 23 has reported the adjusted earnings per share of $2.26, beating the analysts’ estimates for the adjusted earnings per share of $2.08. The company had reported the adjusted revenue growth of 7 percent to $2.14 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $2.10 billion, according to LSEG data. Operating margin grew by 0.3% to 34.4%. The company remains confident and excited about the growth trajectory of our beer portfolio [and] continue to see growth potential in the wine and spirits business as it focused on strong commercial and operational execution. Over the year, revenue jumped 5% to US$9.96 billion, while operating income increased by 7% to US$3.25 billion.

Constellation expects annual comparable earnings per share for 2025 in the range of $13.50 to $13.80, compared with analysts’ average estimates of $13.42 per share. Constellation guided for overall sales to increase by 6% to 7% for the year ahead, on 7% to 9% growth in the beer category but likely flat wine and spirit performance.