Constellation Brands posts smaller‑than‑expected quarterly sales drop on steady Mexican beer demand
08/04/2026 22:23
Corrects bullet 2 to clarify company withdrew its fiscal 2028 outlook April 8 (Reuters) - Corona beer maker Constellation Brands STZ.N posted a smaller-than-expected drop in fourth-quarter sales on Wednesday, helped by stable demand for its Mexican lager brands such as Pacifico and Victoria. Lower prices and a sharper marketing strategy helped lift demand for the company's key beers, including Modelo Especial and Corona Sunbrew, even as the broader U.S. alcohol market was muted due to macroeconomic uncertainty. The company said it remains encouraged by recent demand trends in its beer as well as wine and spirits businesses. However, it expects a volatile operating environment and limited near-term visibility, prompting it to withdraw its fiscal 2028 outlook. Shares of the beer maker, which fell about 38% in 2025, were down 1.5% in extended trading. Constellation's quarterly net sales fell 11% to $1.92 billion from a year ago, smaller than analysts' average estimate of a 13% decline to $1.88 billion, according to data compiled by LSEG. It reported adjusted profit of $1.90 per share for the quarter ended February 28, beating estimates of $1.72. The broader industry backdrop remains challenging as customers cut back spending on alcohol. In January, CEO Bill Newlands warned that beer sales will be pressured as demand among Hispanic consumers remains weak. Newlands will be succeeded by Nicholas Fink from April 13. Constellation said that under a U.S. government announcement issued this month, its products are no longer subject to aluminum tariffs from April 6, easing the margin pressure going forward. The company expects product innovation, such as Modelo Chelada Suprema and Limon y Sal non-alcoholic offerings, along with new pack formats, to support higher sales. It expects fiscal 2027 organic net sales of a 1% decline to 1% growth, compared with a 10% drop in fiscal 2026. Constellation projects annual adjusted earnings of $11.20 to $11.90 per share for fiscal 2027, compared with estimates of $12.36. (Reporting by Sanskriti Shekhar and Savyata Mishra in Bengaluru; Editing by Shreya Biswas) ((Sanskriti.Shekhar@thomsonreuters.com))