Constellation Brands (STZ) Financials

Constellation Brands (NYSE: STZ) has shown a generally positive financial performance in recent quarters and years, with some volatility in operating income and net income across periods. Here is the analysis based on the last four years of reported data:

• Revenue Growth: Total revenues have mostly increased or remained strong over the period, with Q1 2026 reporting $2.68 billion, up from $2.54 billion in Q1 2023 and $2.27 billion in Q4 2022, reflecting a solid top-line expansion.
• Profitability Recovery: Net income has rebounded strongly after a loss in Q4 2025 (-$370.6M) to a $523.8M net income in Q1 2026, indicating operational improvements and possibly the impact of strategic initiatives.
• Operating Income Improvements: Total operating income swung from negative in Q4 2025 (-$150.3M) to $713.8M in Q1 2026, showing better control of costs or higher margin products/services.
• Strong Operating Cash Flow: Net cash from operating activities remains robust, with $637.2M generated in Q1 2026 and $690.5M in Q1 2025, demonstrating good cash conversion from earnings.
• Consistent Dividend Payments: The company has maintained or increased dividends per share, with $1.52 in Q4 2023 and rising to $2.90 in Q4 2022 (note Q4 2022’s likely restatement), indicating shareholder returns are a priority.
• Capital Expenditures: Significant capital expenditure outflows persist (e.g., $192.8M in Q1 2026), highlighting ongoing investments for growth or maintenance, typical for the industry but a cash outflow to monitor.
• Debt Structure: Total debt levels remain high, with long-term debt around $9.8 billion in Q1 2026 and similar levels historically, reflecting a sizeable leverage; however, refinancing and repayment activities continue actively.
• Volatility in Net Income: Notable fluctuations in quarterly net income, including significant losses in mid-2024 and late 2025, suggest underlying operational or market challenges in those periods.
• High Impairment Charges: Large impairment charges notably impacted earnings, e.g., $2.25 billion in Q2 2025, contributing to major net losses and indicating asset write-downs or restructuring costs.
• Interest Expense Impact: Interest expenses remain substantial, near $100 million quarterly, which strains net income especially in periods of weak operating results.

Summary: Constellation Brands demonstrates a solid recovery trajectory with good revenue growth and improving profitability in recent quarters after a challenging period featuring large impairment charges and net losses. Cash generation remains healthy, supporting dividends and capital expenditures. Investors should be mindful of volatile earnings and substantial debt levels but encouraged by the firm's ability to rebound and invest in future growth.