Constellation Brands To Pay Out Dividend

Constellation Brands Inc. on Thursday unveiled its first cash dividend since going public in 1973, as the alcoholic-beverage maker's Mexican beer segment continued to drive growth in the latest quarter.

Constellation had signaled in recent months that it was looking to return cash to shareholders as it reduced its debt levels. The Victor, N.Y., company said it would pay out a cash dividend of 31 cents a share for its Class A stock and 28 cents per share for its Class B stock in May.

Constellation's Corona Extra and Modelo Especial brands have been two of the hottest beers in the U.S. as of late. Larger competitors Anheuser-Busch InBev NV and MillerCoors LLC, meanwhile, have struggled with declining volumes in recent years.

For its fourth quarter, Constellation's beer sales grew 11%. The company said wine and spirits net sales grew 2% on a constant currency basis, though the unit experienced a decline in volume.

To keep up with surging beer sales, Constellation has said it is planning to spend more than $1 billion to expand its brewery in Nava, Mexico.

Constellation said Thursday that the project is progressing on time and budget. The company said it is targeting between $950 million to $1.05 billion in spending on beer projects during its newly-started fiscal year.

Overall, for the fourth quarter, the company posted a profit of $215 million, or $1.06 a share, compared with $157 million, or 79 cents a share a year ago. Excluding certain items, per-share earnings were $1.03 a share.

Net sales rose 5% to $1.36 billion.

Analysts had projected 94 cents a share in profit and $1.36 billion in revenue, according to Thomson Reuters.

For its 2016 fiscal year ending next February, Constellation forecast per-share earnings of $4.70 to $4.90 a share, in line with analysts' expectation for $4.85 a share in earnings.

Constellation is targeting high-single digit sales growth for its beer business and low-to-middle single digit sales growth in the wine and spirit business.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

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