US: Constellation expects continued growth
The US based Constellation Brands announced today that it expected to earn between US$2.43 and US$2.53 a share in 2005.
The company said that this included a $0.12 per share impact from restructuring and related charges and unusual costs. Excluding these charges, fiscal 2005 comparable diluted earnings per share are expected to be within a range from US$2.55 to US$2.65.
Chairman and chief executive officer Richard Sands said: "For fiscal 2004, we expect to report another great year of performance in what has been a challenging industry and economic environment. Looking ahead to fiscal 2005, we see continued industry growth in all categories and we believe that our balanced growth strategy across categories and geographies, and investments behind growth will continue to translate into mid to high single digit net sales growth into the foreseeable future."
Sands continued: "In fiscal year 2005, we expect strong operating income and net income growth. However, our earnings per share growth will be below recent trends primarily due to the full year impact of additional shares outstanding from our July 2003 equity offering. We are also increasing our brand investment in fiscal year 2005 to aggressively drive the outstanding long-term growth opportunities we have in our imported beer and branded wine portfolios."
In addition to the restructuring and related charges discussed in prior quarters, Constellation said it expects to record additional restructuring and related charges of approximately US$8.0m in fiscal 2005 related to the further realignment of business operations within its wine division.
Constellation said it expected 2005 to see mid to high single digit net sales growth driven primarily by expected wine growth. However, beer net sales are expected to be below historic growth trends as a result of wholesaler buy-in ahead of a recent price increase, resulting in a shift in volume and net sales from fiscal 2005 to fiscal 2004.
It expects 2005 reported operating income to increase approximately 20% and comparable operating income to increase in the high single digits driven primarily by expected wine growth.
Meanwhile for the fiscal year ending February 29, 2004, Constellation said it was expecting reported diluted earnings per share within a range from US$2.00 to US$2.03, including a US$0.46 per share impact from restructuring and related charges and unusual costs. Excluding these charges, fiscal 2004 comparable diluted earnings per share are expected to be within a range from US$2.46 to US$2.49.
The company's net sales growth is expected to come in around 29%. Pro forma net sales growth, which includes US$478m of Hardy net sales in the prior year period, is estimated at approximately 10%, driven by solid growth across all business segments and a positive 4% impact from currency.
Constellation is expecting reported operating income in 2004 in the range of US$477m to US$482m and comparable operating income in a range from US$555m to US$560m.
The fiscal 2004 outlook results in a diluted earnings per share outlook for the fourth quarter 2004 in a range from US$0.50 to US$0.52 on a reported basis and US$0.52 to US$0.54 on a comparable basis.
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