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Constellation Brands Updates Outlook; To Return $4.5 Bln To Shareholders By FY22

Constellation Brands (STZ) updated its fiscal 2019 reported basis EPS outlook to $12.95 - $13.05 and comparable basis EPS outlook to $9.20 - $9.30. The company noted that the guidance includes additional interest expense for Canopy financing, excludes fourth quarter Canopy equity earnings. The company affirmed fiscal 2019 operating cash flow target of approximately $2.45 billion and free cash flow projection of $1.2 - $1.3 billion.

For fiscal 2019, the beer business now expects net sales growth to be at the high end of the 9 - 11% range and operating margin to approximate 39%. For the wine and spirits business, the company now expects net sales and operating income to decline low-single digits.

For the third-quarter, the company announced reported basis EPS of $1.56 and comparable basis EPS of $2.37, a decrease of 36% and an increase of 18%, respectively. Sales were $2.16 billion compared to $1.98 billion, previous year.

"We expect the powerful cash generation capability of our core business to enable significant cash returns of $4.5 billion to shareholders in the form of share repurchases and dividends within the next three fiscal years," said David Klein, CFO.

On January 8, 2019, Constellation's board of directors declared a quarterly cash dividend of $0.74 per share of class A Common Stock and $0.67 per share of class B Common Stock, payable on February 26, 2019, to stockholders of record as of
the close of business on February 12, 2019.

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