Constellation Brands reduced its fiscal 2026 guidance as U.S. consumers trimmed spending on premium imports, prompting retailers and distributors to pull back. Management now projects enterprise organic net sales to decline (6)%–(4)% and beer net sales to fall (4)%–(2)%, with reported EPS of USD 10.77–11.07 and comparable EPS of USD 11.30–11.60.
President and CEO Bill Newlands said trip frequency and spend per trip decelerated after Q1 FY26, with high-end beer buy-rate declines among Hispanic shoppers “more pronounced than general market declines.” Despite this, through July the company gained volume share in 49 of 50 states and added 0.4 dollar-share points in Circana channels.
Coverage by The Wall Street Journal underscored the broader pullback in high-end beer as shoppers make fewer trips and tighten budgets, while CNBC highlighted the market reaction as shares fell on the guidance cut and noted the sharper demand decline among Hispanic consumers.
The current weakness among Hispanic consumers follows earlier setbacks linked to U.S. politics. In 2018, Constellation’s beer sales were hit by Donald Trump’s immigration rhetoric and tariff threats, which weighed particularly on demand for Modelo within its core Hispanic base (inside.beer, 10.04.2025). This demographic still accounts for about half of Constellation’s beer sales, amplifying the impact of current spending cutbacks.
Executive Vice President and CFO Garth Hankinson affirmed lower corporate expense at USD 225 million, capex of ~USD 1.2 billion, and free cash flow of USD 1.3–1.4 billion. Management also flagged earlier-than-usual Q2 distributor inventory rebalancing—shipments are expected to trail depletions by 6–7 points before aligning in the second half—and cited lower volumes, operating deleveraging, and additional tariffs as key headwinds for beer operating income (now seen down (9)%–(7)%).
Founded in 1945, Constellation Brands originally built its business in the wine sector and today still owns major labels in the U.S., Italy, and New Zealand, including Kim Crawford, Robert Mondavi Winery, and Lingua Franca. The company’s decisive entry into beer came in 2013, when U.S. regulators required AB InBev to divest Grupo Modelo’s U.S. business as part of its full acquisition of the Mexican brewer. Constellation acquired the U.S. rights to import, market, and sell Corona Extra, Modelo Especial, Pacifico, and Victoria, along with the Piedras Negras brewery in Mexico, ensuring long-term supply. Since then, the Mexican beer portfolio has become the company’s key growth driver, while its wine and spirits operations have been streamlined through divestitures.
