Bill, Thank morning, good and everyone. you,
our Despite end facing, industry year both relentlessly operating and the strength to we brands on continued solid adaptable again plans inflationary of for another higher pressures yet as was have company ‘XX our our initiatives. we deliver and Fiscal teams. been resilient and consumers demonstrated businesses, that strategic the our
further the expect to dedication our focus same ‘XX. momentum We in fiscal and support
So, let’s review year ‘XX in more detail outlook. performance ‘XX fiscal and fiscal our full
portfolio, business. end upper of I with increased comparable the beer ‘XX basis supporting exceeding primarily $XXX approximately range. on of $XXX in our fiscal will X% of the guidance focus strong always, our volumes. results. continued million was our uplift growth a performance sales As incremental This from shipment XX%, Net solid driven or across sales as financial demand Starting net million by
X% excess Net sales also unusual annual favorable benefited in algorithm. of from average pricing to X% pricing our
noted, Bill and X%, larger volume pricing in total mid-teen we as which, pandemic. continued to and XX% pricing of share to cost taken accounted brands, XX% were the value As growth inflationary the Especial, certain growth We in brands. nearing case. ‘XX, headwinds. of the introduced On-premise on-premise markets driven Modelo across our largest response for strong from previously of Modelo volume pricing incremental ‘XX was in noted, actions prior and start chain Depletion in Pacifico approximately depletions the to fiscal Corona year the in by ahead due over pressures adjustments regular grew increases made was Chelada fiscal for Extra, depletions our year-over-year,
our guided, previously shipments As aligned were absolute an closely on and depletions basis.
of was also bottom million exceeding beer for end range. sales net to from our yielded our This in with was the line increased implied of driven range. the line increase X%, which growth operating business. a an margin Operating $XXX on largely and our Moving upper by guidance guidance benefit income XX.X%,
inflationary As expected affected and were headwinds. noted margins operating over ‘XX, negatively fiscal by
largely pressures of This impact, we absolute on of some a and per raw For the in that and driven case of packaging from basis. X% the was charge by reflected have raw an portion an costs, and increases in an approximately increase in a seltzer materials case obsolescence been obsolescence in our on import COGS, of increase costs the entirety fiscal nearly benefits our which would inflationary faced ‘XX excluding our materials XX% represents business, per packaging any XX% beer resulted basis lapping the XX% on basis. the as which
COGS two categories, the XX% ‘XX. these that represented import obsolescence just the including Note COGS portion’s in of impact fiscal over
And by driven of efficiency a in basis by driven year-over-year expenses XX% up per account by costs, just and just a were investments. under was X% overhead XX% that basis COGS. costs mainly capacity for We our costs Freight on also saw labor X% initiatives. XX% import. that in we on a a accounted were brewery up for incremental freight and and increase case offset shipment rise of case faced import and XX% overhead under Labor mainly per were
still compared operating XX% range A incremental beer were the with margins sales. business increase support our Note, $XX by with entirely XX% and other by the also or however, a incremental increase our sponsorships nearly in within of million brands. a brewery marketing momentum a million $XX increased to to our when addition, driven or for capacity XX% almost percentage were in sales related as $XX our year, while nearly in to increase SG&A, X% associated prior million In of beer -- sports that they spend align investments. or our in depreciation, nearly X% to marketing the investments investments in affected net
All important for of that fiscal that still business our ‘XX. in margins best-in-class we said, beer and delivered to note it’s
Spirits business. to our Wine shifting Now and
a in fiscal we wine from collection ‘XX. mainstream that recall please wine divested primarily brands First, portfolio of our
on during brands. divested contributions also an the remarks, today’s the be basis, excludes line which I So will top discussing from organic
by of impact was Bill of mainstream build. lapping decline as inventory market excluding of an and X%, organic brands guidance The driven prior divestiture, Wine performance primarily and sales they net As our range. landing on in brands despite basis, in faced higher-end our the the our year ultimately fiscal noted, challenging the strong sales, of conditions net decline Spirits
Again, U.S. this higher-end total market. both wine offset decline the by in strong in higher-end category was partially and in our growth Spirits which for brands, the Wine U.S. outperformed and
we and and for our international also rapidly to and higher-end these portfolio markets. strong higher-end expect to channels end brands, growth the direct-to-consumer channels our top markets had time, migrate in toward acceleration. emerging continue Our to our support brands growth and expanding Over higher line
depletions organic Shipments basis and X% decreased on an by under decreased by X%.
higher-end million this sales mainstream by by driven noted, net primarily volume $XXX price, to brands, as driven just organic mix our As brands largely reduced decline, net sales. million, our provided and $XXX organic uplift by was which a
favorable from exclusion. following longer continue DTC X%, and increased increased and Spirits to grade marketing less increased to strategically million nearly are costs operating $XX SG&A that lower margin profit, in cost higher enhanced costs This harvest. $XX of in points by the $XX same efficient mix excluding XX%, their which growing also from by ‘XX, by in Benefits tailwind was Wine Zealand net higher was primarily gross divestiture well reflecting partially basis in as a strategies, of channels. income, that part other increase supported marketing and costs to uplift driven fiscal margin headcount our the no XX more strong as million the helped the a These increased actions product business, sales brands invest from flow-through partially as a the to opportunities supported lower-grade highest as income. offset return savings New benefits logistics material million resulting expense were offset operating which from investment focus we operating
initiatives productivity to improvements We Wine time remain over in well to our expand in and and business Spirits with future. continue mix margins positioned the
fiscal $XXX the of Now portfolio, approximately ‘XX, from landing $XXX the our the our related our and corporate $XX million moving all-in, to investments rest guidance to unconsolidated low million. SG&A P&L. million included on end of from at at In expense ventures
implementation for million. corporate $XX for digital DBA SG&A business of which expense, accounted our program, the of acceleration, stands Within the portion
As fiscal Interest to in a upper to introduced initiative ‘XX our coming the rates QX investments was ‘XX similar guidance approximately place DBA rates. debt the XX% we of and for as our of in by took approximately increased in increase impact carry well of interest stock of into expect on the our range. This fiscal of multiyear driven fiscal which XX% end year ‘XX. at rising primarily reminder, expense with million, the adjustable the reclassification, financing as $XXX
earnings, favorability as full Our we higher comparable activity. stock-based basis versus XX.X% excluding equity driven rate, at in in by lapped Canopy came year effective fiscal ‘XX, compensation tax XX.X% year primarily last
by net investment ‘XX, for Free $XXX which activities, including beer the our business. in of provided less above guidance we $X cash our totaled flow fiscal define operating billion, cash CapEx range $X.X over CapEx, as at was end of upper billion. million
in came the facilities. below materials Nava of equipment Obregon our at certain guidance, our timing shifts CapEx spend due our and and primarily brewery to Mexico for investments in
our of million hectoliters. total our ‘XX, nominal the hectoliters of This had Mexico our from includes the a X fiscal at capacity As a months approximately initiatives Obregon few to represents footprint ago. million This breweries. end is Nava X.X our once hectoliters the continued unlocked million existing at flexibility million capacity This facility production productivity XX uplift facility. at brewery have operations of and hectoliter that additional of result uplift Nava our our of XX.X the facility again relative we communicated
As at million unlocked X.X year, shared reminder, had and these additional a of earlier hectoliters initiatives this at million that X.X hectoliters Oregon. Nava we capacity
of our we Nava shortly. adjusted which at productivity that in ‘XX, I new capacity line hectoliters light at plans unlocked have the X.X discuss fiscal In for of ABA the slightly will facility, million production ramp-up
With now fiscal our let’s to move for outlook that, ‘XX.
$XX.XX diluted to in to of Canopy earnings. EPS We $XX, equity the be comparable excluding expect basis range a
growth net X% For to fiscal ‘XX, our beer X%. targeting business of is sales
Extra Corona brands, brands. earlier, momentum largely and next and continued our Chelada discussed Modelo by driven to and be Especial volume brands, the growth we Bill Pacifico Modelo strong As icon expect wave
an each and ‘XX in to and year-over-year the depletions shipments track comparison. absolute on terms closely, both anticipate basis We of fiscal other full our year
in fiscal peak fiscal seasonal pattern. in reminder, in traditional wines cases in the anticipate of last a our despite years as ‘XX As cadence due a our follow weather our half for we pandemic-related some we the meet and to impacts, quarterly ship growth year-over-year of approximately to shipment summer our ‘XX rates expect fluctuations to more few and We XX% the demand severe shipments first products.
manage seasonality expect from QX. always in activities when at particularly perspective, regular inventory still comparisons and to also maintenance rates, levels our show as looking as addition, around we In a variability they some growth year year-over-year shipment we and depletion brewery quarterly throughout the have,
said, do have rate for our expect we in fiscal that as lapping of to All did incremental shipment not growth in any we variability ‘XX. QX
a algorithm. perspective, X% pricing at pricing our planning From we this annual for within stage, are to X% average
We likely pricing above face the for years increases algorithm. and X consumers mindful continue last our that future are were this macroeconomic to foreseeable fiscal conditions that will challenging the in
As our to throughout and we we inflationary the of potential is continue recessionary the ensure our brands. risks pricing advance to year, momentum will appropriately to dynamics monitor balanced support
provide We will further of calls. in part as update any our that future regard quarterly
operating income growth. In terms of
to ‘XX business beer implies XX%. margin is which X%, fiscal targeting approximately X% operating of Our a
represent beer beer have absolute packaging our we relate margin the to inflationary to business. continue majority raw portion which, in As discussed, for average, our operating to we COGS impacted headwinds. in expect our inputs of adjustments costs, in be material increase these import of these high-single-digit negatively and terms on the year-over-year a by The
off on expect for pre-pandemic based these of inputs that subject for our we In pricing are ‘XX, contractual are elevated to to for our XX% raw trailing remain to some approximately material adjustments and significantly most their some and account to fiscal data still relative imports reflect costs. XX% packaging annual of prices. prices peaks, While terms
and tied continue headcount and approximately single-digit be our terms, XX% In absolute year-over-year freight high XX% increase to to of approximately we labor costs increases. and volume increase expect high-teens driven annual and largely addition, of And a costs to training contractual overhead we as investments. by and a in increased XX% capacity face reflect be reflect brewery absolute to to
Obregon, incremental growing expect of bring investments, into business, $XX beer production fiscal to ‘XX. depreciation our we incremental capacity to in we our from as $XX approximately continue million For at particularly million
the initiatives bit from brands. We ABA to unlocked growth additional Nava capacity As our line. now from noted footprint new Chelada to us intend that the facility incremental spend of of ramp-up earlier, more our a production existing has new strong additional time given our the flexibility optimizing better ABA Modelo productivity support on
anticipate will to X Obregon FYXX. line up of we move we ramping of to in hectoliter of be package the Accordingly, QX ABA at next been being for fiscal that investment enabled and Conversely, able the ramp-up is the use had Mexicali. equipment This brewery we intended ‘XX. by accelerate previously our QX in have of million
our our To COGS. our only DBA XX% fiscal then adjustments of pricing for benefits ‘XX, ‘XX beer XX% our operating well fiscal Now, them. XX% margins. productivity execute and contractual reduce to adjustments pressures. efficiencies within to is to exposure around program. number from plan we those our and help We our ‘XX have that These COGS in of COGS going contractual to are subject expectations for to operational about expect a from embedded as actions offset to initiatives to fiscal back note ongoing relevant cost-saving and business efforts hedging to business inflationary it initiatives into include of beer program negotiation as The shared program end, that hedging
efficiencies, wave deliver other types In of addition, optimizing investments and focus we our and greater including brands. toward an expect on even marketing to next these SG&A icon
operating margins to and fiscal for expect expect all within medium-term we our deliver to So we best-in-class target margin results fiscal our operating ‘XX despite above latest slightly efforts still remaining below quarter’s business, ‘XX this result. yield our quarters beer
our to Spirits Moving outlook the and business. for Wine
organic are sales we X.X fiscal ‘XX, divested percentage be sales, ‘XX net to -- relatively in targeting ‘XX. the million within from of net fiscal brands fiscal from Our point net $XX.X flat sales fiscal for excluding
in our our consumer-led facing international expect to face to we which of mainstream will continue growth of channels U.S. brands wholesale with offset and our markets. Premium due the our challenging are DTC brands, help to headwinds segments ongoing premiumization. Spirits market conditions Wine strong to expect We Wine, business the Fine These and Craft and
approximately our products. expect to for and we More with line XX% beer and second again, our Wine half, volumes continued our ‘XX ship business, demand of operating of X%, implies inflationary of growth $XX.X at gross brands between operating fiscal exclusive income to to XX million ‘XX. X% profit, marketing, fiscal margin business Conversely targeting basis seasonal to in least pressures, of Spirits an points. the we less our in notably, Wine despite in related are Spirits This improvement divested
XX% cost The mix primary brands our mainstream continued fiscal metro higher-end management sales stabilize include optimized Similar reductions margin areas, brands, with on additional areas additional initiatives. with expect for products Wine new ongoing that in direct-to-consumer higher-margin our Aspira brands, be business, to high-growth, by adjustments our our to portfolio improvement our innovation drivers and consumer-led in ‘XX and marketing driven within SG&A growth reduced primarily to our in help extend additional COGS offerings portfolio, consumer-led investments enduring high-return business spend and further to improvement, our channels increasingly and approximately from targeted trends, particularly ‘XX. beer net subject international relative fiscal of with through growth momentum higher-end optimized our Spirits focused premiumization we
just rest expected Corporate million. Now $XXX the expectations P&L fiscal to moving expense, ‘XX. in approximately to SG&A of be is including for portion, the the
of from by offset and for will that ‘XX roles Sands ‘XX, fiscal We expect to payable the inflationary fiscal pressures compensation merit-driven be by in shareholders retirement executive their following Richard reclassification in from termination not impact the of see benefits agreement, favorability Rob and approved certain and the increases. the salary of
and the tax outstanding expected benefits approximately earnings is rate, for XX%. to be targeted $XX in around increase $XXX interest is anticipate a excluding up year. to weighted average is million Rounding million due expected fiscal comparable of XXX XX% are associated the is incremental to the P&L, shares financing non-controlling approximately we ‘XX The from expense with and Canopy approximately be the at expense diluted This Interest the million. equity primarily reclassification. and interest
cash to Turning flow.
to to We our of updates. fiscal $X.X cash $X.X to of billion, flow flow remainder includes of expect range reflects in $X.X $X billion free CapEx CapEx and the billion support $X.X $X.X Wine be billion billion. which of range the ‘XX Mexico and billion the cash operating billion, in most investment to to support and brewery will our Spirits approximately hospitality $X.X
dilution I like beer fiscal priorities an and to capital disciplined up, additions financial hospitality existing ‘XX and And would fill that unchanged. via with to continuing investments. our through enhance leverage through earlier repurchases to repurchases, and to portfolio. reiterate throughout committed our net maintaining our in Bill and lastly, cover incremental Spirits in acquisitions remaining that our delivering we ratio We the as by discussed refreshed payout goal or allocation Wine we smaller for investment-grade that brewing additional line a opportunistic share introduced have ratio to growth our To towards move at remain rating gaps businesses support any and by least foundation while of wrap our will shareholders our capital through deployed in returns both remain target, dividends
strong and this be questions. exceptional with that strategy, the foreseeable disciplined execution, will empower premier believe a take return allocation I us With your to future. for combined to generator We are capital that, shareholder happy Bill
