• Constellation Brands reported double-digit sales growth in its beer business as the division continues to dominate.
• Revenue growth was driven by demand for its Modelo Especial and Modelo Chelada brands as well as Corona Extra.
• The company raised its guidance for its fiscal 2024.

Constellation Brands on Thursday reported earnings and revenue that topped analysts' expectations for its fiscal second quarter of 2024.

The Mexican beer powerhouse, owner of the Modelo Especial and Corona Extra brands, reported double-digit sales growth in its beer business as the division continues to dominate the overall beer and high-end categories. Meanwhile, sales of wine and spirits lagged.

The company raised its fiscal 2024 earnings per share outlook to a range of $9.60 to $9.80, up from a prior range of $9.35 to $9.65.

Here's what Constellation reported for the three months ending Aug. 31, compared to what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

• Earnings per share: $3.70 adjusted vs. $3.36 expected
• Revenue: $2.84 billion vs. $2.82 billion expected

Constellation's beer portfolio posted 12% sales growth, boosted by 8.7% growth in shipments. The Modelo brand family was a particular bright spot: Modelo Especial grew nearly 9%, while Modelo Chelada brands posted growth of more than 40%.

Modelo Especial remains the best-selling brand in the U.S. beer category, the company said.

The company's wine and spirits brands, however, underperformed year over year.

The category posted a 14% decrease in sales and a nearly 8% decrease in depletions, an industry term for the number of cases sold to retailers by a distributor.

On a conference call with analysts Thursday, CEO Bill Newlands said the company's wine and spirits business continued to face lower demand, primarily among its mainstream brands, as consumers continue to favor premium-priced beverages.

The division wasn't without its standout brands, though: Constellation's Meiomi and Kim Crawford wine brands saw 7% and 6% depletion growth, respectively, while its craft spirit, Mi Campo Tequila, reported more than 60% depletion growth.

Newlands added that the wine and spirits business should begin to benefit from price increases and a boost from direct-to-consumer channels.

"The benefits of our wine and spirits strategy continue to take hold. We expected net sales growth and operating income growth of that business to ramp up through the remainder of fiscal '24," said Newlands. "And as we look to the coming years, we anticipate our wine and spirits business to further gain momentum and achieve stronger results."

Back in June, the company delivered an earnings beat and reiterated its forecast. In its previous quarter, beer sales rose 11% year over year driven by stable consumer demand and higher pricing.