Modelo and Corona parent Constellation Brands (NYSE:STZ) reported better than expected sales for its second quarter, with revenue reported at $2.84bn.
The revenue figure exceeded analyst forecasts pitched at $2.82 billion.
Performance was driven by the Mexican beer business unit, which saw sales growth of 12% — led by Modelo branded products Modelo Especial and Modelo Chelada.
Wines and spirits struggled with sales down 14% though the Meiomi and Kim Crawford wine brands and Mi Campo tequila saw improved volumes via distributors.
The company reported $1.6 billion in operating cashflow, down 2% due to investments in brewery capacity.
Earnings (adjusted EBITDA) per share was reported as $3.7, above the consensus forecast of $3.36.
Constellation lifted its EPS guidance range to $9.60 to $9.80 for the 2024 financial year and anticipates it will generate $2.4 billion to $2.6 billion in operating cash flow.
It also told investors it will pay an 89 cents per share dividend for the quarter.
“The record top-line and operating income performance of our beer business has enabled us to keep delivering on our capital allocation priorities, as we continue to move closer to our net leverage ratio target while returning cash to shareholders in line with our dividend payout ratio target and advancing our modular brewery capacity expansions,” said chief financial officer Garth Hankinson.
“We continue to make good progress against our operating and financial plans for fiscal 24, and our interest expense management actions have enabled us to raise our earnings per share outlook.”
In New York, Constellation Brands (NYSE:STZ) was down 2.54% for the day at $242.97, albeit the stock was 6.75% higher in the year to date.