Constellation Brands (STZ) Q3 2025 earnings summary

Executive summary

• Q3 FY25 net sales were flat year-over-year at $2.46B, with Beer growth offsetting double-digit declines in Wine and Spirits; net income rose 21% to $616M due to lower tax provision and improved Beer performance.

• Beer business outperformed the beverage industry in dollar sales growth, achieving its 59th consecutive quarter of depletion volume growth, while Wine and Spirits faced ongoing declines but saw growth in higher-end and craft brands.

• A $2.25B goodwill impairment in Wine and Spirits drove a sharp profit drop for the nine months, despite resilient Beer performance and cost savings.

• SVEDKA vodka divestiture completed in January 2025, with proceeds expected to generate a $250–$275M gain and a strategic shift toward premium brands.

• Over $1.2B returned to shareholders year-to-date through dividends and share repurchases, with net leverage ratio maintained at 2.9x, below the 3.0x target.

Financial highlights

• Q3 FY25 net sales were $2.46B (flat year-over-year); Beer up 3% to $2.03B, Wine and Spirits down 14% to $431M.

• Q3 net income attributable to CBI was $616M, up 21%; operating income was $793M (flat); diluted EPS was $3.39 (up 23%), comparable EPS $3.25 (flat).

• Q3 Beer shipments grew 1.6%, depletions up 3.2%; Wine and Spirits shipments down 16.4%, depletions down 4.3%.

• YTD free cash flow was $1.6B, up 13% year-over-year; operating cash flow reached $2.6B.

• Quarterly dividend of $1.01 per share declared; YTD dividends paid were $491M.

Outlook and guidance

• FY25 reported EPS outlook is $3.90–$4.30; comparable EPS $13.40–$13.80; organic net sales growth expected at 2–5% for the enterprise.

• Beer net sales growth outlook is 4–7%, operating income growth 9–12%, with operating margin around 39%.

• Wine and Spirits net sales expected to decline 5–8%, operating income down 17–19% for FY25.

• FY25 operating cash flow target raised to $2.9–$3.1B; free cash flow projected at $1.6–$1.8B.

• FY25 effective tax rate expected between 7% and 9%, reflecting SVEDKA divestiture impact.