Tear Sheet: Constellation Brands Inc.

We estimate the company reduced its S&P Global Ratings-adjusted debt to EBITDA to 3.2x for the 12 months ended Aug. 31, 2023, from 3.7x as of the end of fiscal year 2023 (when its leverage was elevated due to its $1.5 billion debt-financed conversion of its class B equity shares to class A shares). Our expectation for a continued top-line expansion, underpinned by the strength of its beer segment, and a rebound in its EBITDA margin closer to its historical level of near 38%--as the benefits of its price increases offset the effects of last year?s input-cost inflation--will likely lead its leverage to approach 3x in the coming quarters, which is in Ine with our expectations. beer segment revenue was

...October 10, 2023 The pace of Constellation Brands' deleveraging through the first half of fiscal year 2024 (ended Aug. 31, 2023) was in line with our expectations. We estimate the company reduced its S&P Global Ratings-adjusted debt to EBITDA to 3.2x for the 12 months ended Aug. 31, 2023, from 3.7x as of the end of fiscal year 2023 (when its leverage was elevated due to its $1.5 billion debt- financed conversion of its class B equity shares to class A shares). Our expectation for a continued top-line expansion, underpinned by the strength of its beer segment, and a rebound in its EBITDA margin closer to its historical level of near 38%--as the benefits of its price increases offset the effects of last year's input-cost inflation--will likely lead its leverage to approach 3x in the coming quarters, which is in Ine with our expectations. The better-than-expected performance of Constellation's Beer segment offset the higher- than-anticipated sales declines in its Wine & Spirits segment. The...

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