Revenue Analysis:
Reviewing STZ’s revenue, we note a progressive increase in both Total Revenue and Operating Revenue over the last three years. From 2023-02-28 to 2024-02-29, Total Revenue increased from approximately $1.998 billion to $2.139 billion. Operating Revenue also showed a similar uptrend from about $2.148 billion to $2.3 billion. The Gross Profit margin remained relatively consistent, reflecting stable profitability in core operations.
Cost Management:
Cost of Revenue increased slightly from around $1.037 billion in 2023 to $1.1 billion by 2024, indicating growing production or service delivery costs. Operating Expenses and Total Expenses have seen an uptick, revealing higher overheads and possibly increased sales and marketing activities or administrative expenses, which align with scaling operations.
Profitability Analysis:
EBITDA and Operating Income have both shown healthy growth, with EBITDA increasing from $479 million in 2023 to $701 million by 2024. This suggests improved operational efficiency and effective cost management despite rising expenses. Pre-tax Income and Net Income have also increased significantly, underscoring effective tax management and profitability growth.
Cash Flow Indicators:
Reconciled Depreciation expenses show a consistent investment in capital expenditures, as indicated by figures hovering around $105-$108 million annually. Interest Expense remained also consistent at about $102-$118 million, reflecting stable finance costs against its borrowings.
Taxation:
STZ’s Tax Rate fluctuated from 12.95% in 2023 to nearly 17.905% by 2024, while the Tax Provision increased consistently, indicating a higher tax liability parallel to its rising income. Tax Effects of Unusual Items have been minimal, suggesting most earnings components are from regular operations.
Shareholder Metrics:
Diluted EPS and Basic EPS have shown improvement from $1.21 in 2023 to figures that were unfortunately omitted in the most recent fiscal year data. Average Shares outstanding were reported consistently around 184 million shares. Net Income Available to Common Stockholders aligns closely with reported Net Income, ensuring shareholder returns commensurate with company performance.
Conclusion:
The analysis indicates that STZ has demonstrated substantial revenue growth, improved operational efficiency, and effective cost management strategies over the past three years. Continued investments in capital expenditures are evident from stable depreciation costs, while the management efficiently handles increased expenses to ensure profitability growth. The firm should consider the implications of rising costs and explore strategic opportunities to optimize operational and overhead expenses, maintaining profitability and shareholder value.