Constellation Brands to record up to $2.5 billion in charges linked to wine business
12:07 pm Tuesday, September 03rd, 2024
(Reuters) – Constellation Brands will write down the value of its wine and spirits business and take up to a $2.5 billion charge in the current quarter, the Corona beer maker said on Tuesday, following several quarters of weak demand in the U.S.
The company also trimmed its annual enterprise net sales growth to between 4% and 6%, from 6% to 7% earlier, as retailers reduce stocking wine and spirits and consumers pare back spending on pricier alcoholic beverages.
Shares of the company, which is expected to report second-quarter results on Oct. 3, were unchanged in early trading.
In July, Constellation Brands topped Wall Street estimates for first-quarter profit on resilient demand for its beers such as Modelo Especial and Pacifico, as well as higher pricing.
The company expects a goodwill charge of about $1.5 billion to $2.5 billion in the second quarter related to the wine and spirits business.
Constellation Brands lowered its fiscal 2025 reported earnings per share estimates to a range of $3.05 to $7.92, from $14.63 to $14.93 earlier.
It raised the lower end of its annual adjusted earnings per share by 10 cents to $13.60 while maintaining the upper end at $13.80.
Wine and Spirits annual net sales is expected to decline between 6% and 4%, compared with a fall of 0.5% to a rise of 0.5% expected earlier.
(Reporting by Juveria Tabassum; Editing by Sriraj Kalluvila)
