Constellation Brands will write down the value of its wine and spirits business and take up to a $2.5 billion (€2.2 billion) charge in the current quarter, the Corona beer maker said on Tuesday, following several quarters of weak demand in the US.
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.
Goodwill Charge
Shares of the company, which is expected to report second-quarter results on October 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 (€1.3 billion) to $2.5 billion (€2.2 billion) in the second quarter related to the wine and spirits business.
Wine And Spirits
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.
Pernod Ricard
Meanwhile, France's Pernod Ricard on Thursday forecast its sales will grow again next year even as challenges in the US and Chinese markets persist, after reporting an annual 1% drop largely in line with forecasts and its own guidance.
The world's No.2 Western spirits maker and its rivals have suffered as a post-pandemic boom in expensive spirits sales has reversed amid high interest rates, inflation and economic challenges in China, the number one market for alcoholic drinks.
