On this page of StockholderLetter.com we present the latest annual shareholder letter from CONSTELLATION BRANDS, INC. — ticker symbol STZ. Reading current and past STZ letters to shareholders can bring important insights into the investment thesis.
WORTH
REACHING
FOR
FISCAL YEAR 2024
ANNUAL REPORT
DEAR
SHAREHOLDERS
I   m extremely proud to say that our team delivered
another strong year of financial performance in Fiscal
2024, driving a more than half a billion dollar increase
in net sales at an enterprise level. This strong performance
garnered recognition from Circana as the #1 growth
leader among large CPG companies1 for the fifth time
in the past seven years, a claim no other large CPG
company can make.
Strong commercial and operational execution, along with
cost savings and efficiency initiatives, helped this business
combat trailing inflationary headwinds and maintain bestin-class operating margins. In addition, we continued
to invest in capabilities to fuel future growth, further
expanding brewing capacity at our Nava and Obreg  n
facilities, and continuing to build our new brewery
operations in Veracruz.
Our overall performance was driven largely by our
beer business, which delivered its 14th consecutive year
of volume growth with a 9% increase of $700 million
in net sales. We extended our leading position as the #1
high-end beer supplier in the U.S., achieving the largest
dollar share gain in company history for a full fiscal year,
and driving nearly 70% of the total dollar growth in the
beverage alcohol sector in tracked channels.
We expect the strong momentum of our Beer Business to
continue into Fiscal 2025, as we seek to deliver net sales
growth of 7-9% and an operating margin of approximately
39% aligned with our medium-term algorithm.
Modelo Especial led the charge for this business,
increasing depletions by nearly 10% and becoming
the #1 beer brand in U.S. dollar sales. Corona Extra
increased depletions nearly 1% and maintained its
position as the #3 high-end beer brand in the U.S. And
two of our high growth potential brands   Pacifico and
Modelo Chelada   delivered depletion growth of 17%
and 30%, respectively, with both surpassing the 20
million cases sold milestone on an annual basis.
Several consumer-led innovations aligned with
consumers    increasing desire for more flavorful and
better-for-you options added to our growth profile in
Fiscal 2024, including:
    Modelo Oro, the #3 share gainer in the U.S.
high-end beer segment;
    Corona Non-Alcoholic, the leading dollar share
gainer in the U.S. non-alcoholic beer segment; and
    Modelo Aguas Frescas, the #1 new FMB in its test
market of Nevada.
Constellation Brands, Inc. FY 2024 Annual Report
Our Wine and Spirits business faced a number of
challenging market dynamics in Fiscal 2024. Under
the leadership of our recently appointed President of
Wine and Spirits, Sam Glaetzer, our team intends to
maintain laser focus on driving enhanced commercial and
operational execution and delivering profitable growth in
line with our medium-term aspirations. Key goals for this
business in Fiscal 2025 include:
    prioritizing investments and efforts to accelerate
growth for our most scaled higher-end brands with
momentum, most notably Meiomi, Kim Crawford,
The Prisoner, High West Whiskey, and Mi CAMPO;
    revitalizing our largest mainstream brands   
Woodbridge and SVEDKA;
    aligning with our U.S. wholesale distributor partners
on clear priorities to help enhance performance in
our largest markets and retail channels;
    shifting investments in marketing and promotional
activities to maximize value and enhance support of
go-to-market activations; and
    driving operational and supply chain efficiencies.
#WORTHREACHINGFOR
In Fiscal 2024, we generated $2.8 billion in operating
cash flow and further strengthened our balance sheet
by reducing our net leverage ratio by 40 basis points,2
while returning over $900 million to shareholders through
quarterly dividends and share repurchases, as well as
deploying approximately $900 million to the previously
referenced modular brewery capacity additions to
support the growth of our Beer Business, all consistent with
our capital allocation priorities.
Furthermore, we made notable progress against our
environmental, social, and governance objectives by:
    appointing two new independent directors, former
CFO of AutoZone, Bill Giles and Luca Zaramella,
CFO of Mondel  z International, with strong
financial expertise;
    electing a new independent board chair, Chris
Baldwin of CVC Advisors (U.S.) Inc., former CEO
of BJ   s Wholesale Club Holdings Inc., with extensive
executive and board leadership experience, and a
deep knowledge of the CPG sector and food and
beverage industries from his more than 20 years of
service in multiple facets of business leadership
including branding, marketing, and human capital
development;
    completing a series of water stewardship initiatives
near our production facilities in Mexico designed
to ensure local residents and businesses have ample
supply and access to water, and in line with our
updated commitment to restore more than 5 billion
gallons of water withdrawals to key watersheds near
our production facilities between the timeframe
covering Fiscal 2023-2025, having achieved our
initial 1.1 billion gallon target two years early in
Fiscal 2023; and
    announcing two new environmental commitments
to reduce waste within our key operating facilities
and to enhance our use of circular packaging.
The progress made against our strategic priorities in
Fiscal 2024 gives us confidence in our ability to keep the
momentum going and to continue creating shareholder
value in Fiscal 2025 by seeking to:
    deliver best-in-class growth and operating margins
for our beer business;
    drive improved performance and profitability for
our Wine and Spirits business through enhanced
commercial and operational execution;
    maintain our disciplined approach towards capital
allocation; and
    continue our commitment to operate in a way that
is both good for business and good for the world.
On behalf of our Board of Directors and Executive Team,
I want to sincerely thank each of our colleagues across
the company, our distributor and retailer partners, and
our shareholders for your continued support of our
business. Together, we are building a company that is
truly Worth Reaching For.
All Circana statements are based on Total U.S. Multi-Outlet + Convenience, 52 weeks ending 2/29/24,
unless otherwise noted
1
Per Circana for calendar year 2023
2
Presented on a comparable basis, excluding Canopy EIE
Constellation Brands, Inc. FY 2024 Annual Report
Bill Newlands
President & CEO
#WORTHREACHINGFOR
FISCAL 2024 HIGHLIGHTS
CONTINUE TO BUILD
STRONG BRANDS THAT
PEOPLE LOVE
#1 growth leader among large CPG companies1
Top 3 dollar share gainer in total U.S. beer category for the past 11 years2
BUILD A CULTURE THAT IS
CONSUMER   OBSESSED
AND LEVERAGES ROBUST
INNOVATION CAPABILITIES
TO STAY ON THE FOREFRONT
OF CONSUMER TRENDS
Deploy capital in line with
disciplined and balanced
priorities
Generated $2.8B of operating cash
flow supporting
a
- 40 basis point3 reduction in net
leverage ratio
- Over $900 million returned to
shareholders through dividends
and share repurchases
- Approximately $900 million
in brewery capacity investments
to support the growth of our
Beer Business

10B
NET SALES
56th consecutive quarter
of depletion volume
growth in Beer Business
Empower enterprise to
achieve best-in-class
operational ef   ciency
Achieved $245M of cost savings
across the enterprise
Unlocked ~1.5M HL of additional
capacity at Mexican Breweries
through optimization initiatives
a
Operate in a way that
is good for business and
good for the world
Increased water withdrawal
restoration target to 5 billion gallons4
1
Per Circana for calendar year 2023
Circana data for 52 weeks ending February 23, 2014 to 52 weeks ending February 25, 2024
3
Presented on a comparable basis, excluding Canopy EIE
4
From Fiscal 2023 to Fiscal 2025 for local watersheds near our production facilities
5
In key operating facilities by Fiscal 2025
2
Constellation Brands, Inc. FY 2024 Annual Report
Pursuing TRUE Certification for
Zero Waste5
#WORTHREACHINGFOR
 • shareholder letter icon 6/3/2024 Letter Continued (Full PDF)
 • stockholder letter icon 6/1/2023 STZ Stockholder Letter
 • stockholder letter icon More "Beverages & Wineries" Category Stockholder Letters
 • Benford's Law Stocks icon STZ Benford's Law Stock Score = 80


STZ Shareholder/Stockholder Letter Transcript:

WORTH
REACHING
FOR
FISCAL YEAR 2024
ANNUAL REPORT

DEAR
SHAREHOLDERS
I   m extremely proud to say that our team delivered
another strong year of financial performance in Fiscal
2024, driving a more than half a billion dollar increase
in net sales at an enterprise level. This strong performance
garnered recognition from Circana as the #1 growth
leader among large CPG companies1 for the fifth time
in the past seven years, a claim no other large CPG
company can make.
Strong commercial and operational execution, along with
cost savings and efficiency initiatives, helped this business
combat trailing inflationary headwinds and maintain bestin-class operating margins. In addition, we continued
to invest in capabilities to fuel future growth, further
expanding brewing capacity at our Nava and Obreg  n
facilities, and continuing to build our new brewery
operations in Veracruz.
Our overall performance was driven largely by our
beer business, which delivered its 14th consecutive year
of volume growth with a 9% increase of $700 million
in net sales. We extended our leading position as the #1
high-end beer supplier in the U.S., achieving the largest
dollar share gain in company history for a full fiscal year,
and driving nearly 70% of the total dollar growth in the
beverage alcohol sector in tracked channels.
We expect the strong momentum of our Beer Business to
continue into Fiscal 2025, as we seek to deliver net sales
growth of 7-9% and an operating margin of approximately
39% aligned with our medium-term algorithm.
Modelo Especial led the charge for this business,
increasing depletions by nearly 10% and becoming
the #1 beer brand in U.S. dollar sales. Corona Extra
increased depletions nearly 1% and maintained its
position as the #3 high-end beer brand in the U.S. And
two of our high growth potential brands   Pacifico and
Modelo Chelada   delivered depletion growth of 17%
and 30%, respectively, with both surpassing the 20
million cases sold milestone on an annual basis.
Several consumer-led innovations aligned with
consumers    increasing desire for more flavorful and
better-for-you options added to our growth profile in
Fiscal 2024, including:
    Modelo Oro, the #3 share gainer in the U.S.
high-end beer segment;
    Corona Non-Alcoholic, the leading dollar share
gainer in the U.S. non-alcoholic beer segment; and
    Modelo Aguas Frescas, the #1 new FMB in its test
market of Nevada.
Constellation Brands, Inc. FY 2024 Annual Report
Our Wine and Spirits business faced a number of
challenging market dynamics in Fiscal 2024. Under
the leadership of our recently appointed President of
Wine and Spirits, Sam Glaetzer, our team intends to
maintain laser focus on driving enhanced commercial and
operational execution and delivering profitable growth in
line with our medium-term aspirations. Key goals for this
business in Fiscal 2025 include:
    prioritizing investments and efforts to accelerate
growth for our most scaled higher-end brands with
momentum, most notably Meiomi, Kim Crawford,
The Prisoner, High West Whiskey, and Mi CAMPO;
    revitalizing our largest mainstream brands   
Woodbridge and SVEDKA;
    aligning with our U.S. wholesale distributor partners
on clear priorities to help enhance performance in
our largest markets and retail channels;
    shifting investments in marketing and promotional
activities to maximize value and enhance support of
go-to-market activations; and
    driving operational and supply chain efficiencies.
#WORTHREACHINGFOR

In Fiscal 2024, we generated $2.8 billion in operating
cash flow and further strengthened our balance sheet
by reducing our net leverage ratio by 40 basis points,2
while returning over $900 million to shareholders through
quarterly dividends and share repurchases, as well as
deploying approximately $900 million to the previously
referenced modular brewery capacity additions to
support the growth of our Beer Business, all consistent with
our capital allocation priorities.
Furthermore, we made notable progress against our
environmental, social, and governance objectives by:
    appointing two new independent directors, former
CFO of AutoZone, Bill Giles and Luca Zaramella,
CFO of Mondel  z International, with strong
financial expertise;
    electing a new independent board chair, Chris
Baldwin of CVC Advisors (U.S.) Inc., former CEO
of BJ   s Wholesale Club Holdings Inc., with extensive
executive and board leadership experience, and a
deep knowledge of the CPG sector and food and
beverage industries from his more than 20 years of
service in multiple facets of business leadership
including branding, marketing, and human capital
development;
    completing a series of water stewardship initiatives
near our production facilities in Mexico designed
to ensure local residents and businesses have ample
supply and access to water, and in line with our
updated commitment to restore more than 5 billion
gallons of water withdrawals to key watersheds near
our production facilities between the timeframe
covering Fiscal 2023-2025, having achieved our
initial 1.1 billion gallon target two years early in
Fiscal 2023; and
    announcing two new environmental commitments
to reduce waste within our key operating facilities
and to enhance our use of circular packaging.
The progress made against our strategic priorities in
Fiscal 2024 gives us confidence in our ability to keep the
momentum going and to continue creating shareholder
value in Fiscal 2025 by seeking to:
    deliver best-in-class growth and operating margins
for our beer business;
    drive improved performance and profitability for
our Wine and Spirits business through enhanced
commercial and operational execution;
    maintain our disciplined approach towards capital
allocation; and
    continue our commitment to operate in a way that
is both good for business and good for the world.
On behalf of our Board of Directors and Executive Team,
I want to sincerely thank each of our colleagues across
the company, our distributor and retailer partners, and
our shareholders for your continued support of our
business. Together, we are building a company that is
truly Worth Reaching For.
All Circana statements are based on Total U.S. Multi-Outlet + Convenience, 52 weeks ending 2/29/24,
unless otherwise noted
1
Per Circana for calendar year 2023
2
Presented on a comparable basis, excluding Canopy EIE
Constellation Brands, Inc. FY 2024 Annual Report
Bill Newlands
President & CEO
#WORTHREACHINGFOR

FISCAL 2024 HIGHLIGHTS
CONTINUE TO BUILD
STRONG BRANDS THAT
PEOPLE LOVE
#1 growth leader among large CPG companies1
Top 3 dollar share gainer in total U.S. beer category for the past 11 years2
BUILD A CULTURE THAT IS
CONSUMER   OBSESSED
AND LEVERAGES ROBUST
INNOVATION CAPABILITIES
TO STAY ON THE FOREFRONT
OF CONSUMER TRENDS
Deploy capital in line with
disciplined and balanced
priorities
Generated $2.8B of operating cash
flow supporting
a
- 40 basis point3 reduction in net
leverage ratio
- Over $900 million returned to
shareholders through dividends
and share repurchases
- Approximately $900 million
in brewery capacity investments
to support the growth of our
Beer Business

10B
NET SALES
56th consecutive quarter
of depletion volume
growth in Beer Business
Empower enterprise to
achieve best-in-class
operational ef   ciency
Achieved $245M of cost savings
across the enterprise
Unlocked ~1.5M HL of additional
capacity at Mexican Breweries
through optimization initiatives
a
Operate in a way that
is good for business and
good for the world
Increased water withdrawal
restoration target to 5 billion gallons4
1
Per Circana for calendar year 2023
Circana data for 52 weeks ending February 23, 2014 to 52 weeks ending February 25, 2024
3
Presented on a comparable basis, excluding Canopy EIE
4
From Fiscal 2023 to Fiscal 2025 for local watersheds near our production facilities
5
In key operating facilities by Fiscal 2025
2
Constellation Brands, Inc. FY 2024 Annual Report
Pursuing TRUE Certification for
Zero Waste5
#WORTHREACHINGFOR



shareholder letter icon 6/3/2024 Letter Continued (Full PDF)
 

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