Constellation Brands beats by $0.09, reports revs in-line; guides FY16 EPS in-line; initiates quarterly dividend
Reports Q4 (Feb) earnings of $1.03 per share, $0.09 better than the Capital IQ Consensus Estimate of $0.94, net sales +5% to $1.35 bln vs. $1.36 bln consensus, +6% ex-FX.
- Net sales for the beer segment increased 11% primarily due to volume growth driven by continued strong consumer demand.
- Wine and spirits net sales on a constant currency basis increased two%. This reflects favorable mix and distributor performance payments, partially offset by lower volume.
- For fiscal 2016, the beer business is targeting mid-single digit volume growth, high-single digit net sales growth and 10 - 12% operating income growth.
- For the wine and spirits business, the company expects net sales and operating income growth to be in the low-to-mid-single digit range.
>>> Initiates $0.31 Quarterly Dividend, Yield 1.0%
Constellation's board has approved the initiation of a dividend program under which the company intends to pay a regular quarterly cash dividend to stockholders of its common stock. The initial quarterly cash dividend is $0.31 per share of Class A Common Stock and $0.28 per share of Class B Common Stock, payable on May 22, 2015 to stockholders of record as of the close of business on May 8, 2015.
CEO: "The decision by Constellation's board of directors to initiate a dividend represents a significant milestone in the company's history and demonstrates confidence in our growth prospects, free cash flow generation and financial outlook over the long-term."
CFO: "Both our beer and wine and spirits businesses have strong, consistent, cash generation capabilities and produce solid returns on invested capital. The beer business acquisition and our organic growth focus across our businesses have strengthened our financial profile and created significant capital allocation flexibility and shareholder return opportunities. We are initially targeting a dividend payout ratio of 25-30% of our comparable basis net income. Going forward, we will evaluate opportunities to increase our dividend based on the growth of our net income and free cash flow."