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The first week of 2024 was a busy one, with earnings reports released from companies like Walgreens (WBA), Conagra Brands (CAG), and Constellation Brands (STZ). Yahoo Finance analyzed company performance and sat down with industry experts to discuss the key takeaways.
Walgreens (00:00:14)
Walgreens’ first-quarter profit was $36.7 billion on revenue of $35.04 billion, compared to the expected $35.04 billion, and adjusted earnings per share were $0.66 versus the expected $0.62, with both bottom lines exceeding the top. Ta. “The company reiterated its full-year earnings outlook, but cut its dividend by almost 50 percent to $0.25 per share to strengthen its balance sheet and cash position,” Yahoo Finance’s Sheena Smith said. do.
Brian Tanquilut of Jefferies Healthcare Services Equity Research discusses the Walgreens results. “It’s obviously not good news when companies cut their dividends,” Tanquilut said. “We are facing a deteriorating consumer environment, which is clearly creating headwinds for consumers. And at the same time, we are seeing gross margin pressure from payers reducing reimbursement for drugs dispensed in retail pharmacies. He also claimed that it continues.
Conagra Brand (00:01:07)
Yahoo Finance’s Brooke DiPalma analyzes Conagra Brands’ financial results. The company has lowered its 2024 outlook and now expects “adjusted earnings per share to be in the range of $2.60 to $2.65.” This compares with previous expectations of $2.70 to $2.75. We also expect organic net sales to increase approximately 1% this year, down in the 1% to 2% range compared to our previous forecast,” DiPalma said. The company is also focusing on “innovation,” as it “announces new advertising investments focused on its biggest brands.”
Constellation Brand (00:01:56)
“It was a very strong quarter for Constellation in the beer business,” said Filippo Farolni, vice president of equity research at Citi. “The Modelo Especial brand is the largest brand in the beer sector and has seen an increase in depletion, a measure of volume, of around 12%.” “There are strengths across the portfolio,” Farolni points out.
“This year’s Bud Light (BUD) controversy…was probably the most important driver within the beer industry,” Farolni added. However, from a consumer perspective, “Modelo Especial did not have much of an advantage compared to other domestic brands such as Coors Light and Miller Lite (TAP). Many of the benefits of the Modelo Especial brand This was due to the level of recognition.”
video transcript
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Brooke DiPalma: Conagra and Walgreens both reported Thursday ahead of the opening, and Friday washed everything away with coverage of beer importer Constellation Brands.
Sheena Smith: The company reported its first fiscal first quarter results. The pharmacy retailer now beat Street expectations on both sales and bottom line, with adjusted earnings of $36.7 billion, or $0.66 per share. The company reiterated its full-year earnings forecast, but cut its dividend by almost 50% to $0.25 per share in an effort to strengthen its balance sheet and cash position.
Brian Tunkilt: They cut their dividend by 48%. Even though some investors have been expecting it for the past six months, it’s still clearly not good news for a company to cut its dividend. That’s number one. And I think the second thing is that we’re facing a weakening consumer environment, and that’s clearly creating headwinds for consumers. At the same time, they argued that gross margin pressure from payers continues to reduce reimbursement for drugs dispensed in retail pharmacies.
Brooke DiPalma: Therefore, the company updated its outlook for fiscal 2024, as the pace of recovery is expected to continue to slow. He also stated that he would like to directly reflect the results achieved so far. The company now expects adjusted earnings per share to be in the range of $2.60 to $2.65. This compares with previous expectations of $2.70 to $2.75.
The company also expects organic net sales to decline in the range of 1% to 2% this year, compared to its previous forecast of an increase of about 1%. The company is announcing new advertising investments focused on its biggest brands. The company also focused on innovation. Sean Connolly said on a conference call that fiscal year 2024 will be one of the biggest innovations ever.
Filippo Farolni: Constellation’s beer business had a very strong quarter. The Modelo Especial brand is the largest brand in the beer category, and its depletion, a measure of volume, increased by approximately 12%. Overall, the beer sector was primarily driven by his Modelo Especial, with attrition increasing by his 8.2%, but other brands also performed well.
In other words, there are strengths across the portfolio. This year’s Bud Light controversy was perhaps the most important driving force within the beer industry. However, from a consumer perspective, Modelo Especial did not have much of an advantage compared to other national brands such as Coors Light and Miller Lite.
We estimate that these brands compensate for approximately 80% to 85% of Bud Light’s equity losses. In other words, much of the benefit we received from the Modelo Especial brand was due to brand awareness. But from a distribution perspective, the Modelo Especial brand still has a lot of runway.
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