Core Insights - Constellation Brands reported revenue of $2.48 billion for the quarter ended August 2025, a decrease of 15% year-over-year, with EPS at $3.63 compared to $4.32 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $2.46 billion by 0.98%, while the EPS surpassed the consensus estimate of $3.37 by 7.72% [1] Revenue and Earnings Performance - Net Sales for Wine and Spirits were reported at $136 million, below the five-analyst average estimate of $138.99 million, reflecting a significant year-over-year decline of 65% [4] - Net Sales for Beer reached $2.35 billion, slightly above the $2.33 billion average estimate, but still represented a year-over-year decrease of 7.3% [4] - Operating Income for Wine and Spirits was reported at -$19.8 million, worse than the estimated -$9.36 million [4] - Operating Income for Beer was $951.6 million, exceeding the average estimate of $911.22 million [4] - Corporate Operations and Other reported an Operating Income of -$45.6 million, better than the estimated -$53.47 million [4] Stock Performance - Shares of Constellation Brands have returned -4.2% over the past month, contrasting with the Zacks S&P 500 composite's increase of 4.3% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Performance - Constellation Brands reported quarterly earnings of $3.63 per share, exceeding the Zacks Consensus Estimate of $3.37 per share, but down from $4.32 per share a year ago, indicating a year-over-year decline [1] - The company achieved revenues of $2.48 billion for the quarter ended August 2025, surpassing the Zacks Consensus Estimate by 0.98%, but down from $2.92 billion in the same quarter last year [2] - Over the last four quarters, Constellation Brands has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Constellation Brands shares have declined approximately 35.7% since the beginning of the year, contrasting with the S&P 500's gain of 14.2% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.79 on revenues of $2.2 billion, and for the current fiscal year, it is $11.50 on revenues of $9.08 billion [7] - The outlook for the Beverages - Alcohol industry is currently in the bottom 22% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] Industry Context - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - Another company in the same industry, Molson Coors Brewing, is expected to report quarterly earnings of $1.81 per share, reflecting a year-over-year change of +0.6% [9]

Core Viewpoint - Constellation Brands Inc. reported quarterly results that exceeded expectations, leading to an increase in share prices after hours, while maintaining its full-year outlook [1] Financial Performance - The company’s quarterly results surpassed market expectations, indicating strong operational performance [1] - Management reaffirmed its full-year outlook, suggesting confidence in future performance despite market conditions [1]

Core Viewpoint - Constellation Brands experienced a smaller-than-expected decline in second-quarter sales, supported by consistent demand for beer despite challenges faced by key Hispanic consumers due to the Trump administration's immigration policies [1] Company Summary - The second-quarter sales drop was less severe than anticipated, indicating resilience in the company's performance [1] - Steady demand for beer has been a significant factor in mitigating the sales decline [1] Industry Summary - The impact of immigration policies on Hispanic consumers may pose challenges for the broader beverage industry, particularly for companies reliant on this demographic [1]

Core Insights - Constellation Brands reported strong fiscal second-quarter earnings, beating expectations on both net income and earnings per share, but reiterated a lowered full-year guidance due to macroeconomic challenges [1][3]. Financial Performance - The company achieved a net income of $466 million, or $2.65 per share, compared to a loss of $1.2 billion, or $6.59 per share, in the same quarter last year [1]. - Adjusted earnings per share were reported at $3.63, exceeding the expected $3.38, while revenue was $2.48 billion, slightly above the anticipated $2.46 billion [5]. Sales and Market Trends - Net sales decreased by 15% year-over-year to $2.48 billion, with operating margins declining by 200 basis points, partly due to aluminum tariffs [2]. - The company anticipates organic net sales to fall by 4% to 6% for fiscal 2026, a significant revision from a previous expectation of 1% growth to a 2% decline [3]. Strategic Focus - The CEO emphasized the company's commitment to strategic objectives, including distribution gains, disciplined innovation, and brand investment, despite a challenging socioeconomic environment affecting consumer demand [2]. Consumer Behavior - A noted trend of reduced demand from Hispanic consumers has been linked to concerns over immigration policies and potential job losses, impacting the company's sales [4].

Financial Performance - Constellation Brands reported second-quarter revenue of $2.48 billion, exceeding analyst estimates of $2.46 billion [1] - The company achieved adjusted earnings of $3.63 per share, surpassing estimates of $3.38 per share [1] Business Segment Performance - The beer business experienced a high-single-digit net sales decline, while the wine and spirits business saw double-digit organic net sales declines [2] - The company acknowledged a challenging socioeconomic environment that negatively impacted consumer demand across the industry [2] Strategic Actions and Shareholder Returns - Despite challenges, the company focused on controllable factors, achieving share and distribution gains in the beer business and outperforming in the higher-end wine segment [3] - Constellation Brands returned over $475 million to shareholders through dividends and share repurchase programs [3] - The company ended the quarter with approximately $72 million in total cash and cash equivalents [3] Future Guidance - Constellation Brands affirmed its fiscal 2026 adjusted earnings guidance of $11.30 to $11.60 per share, compared to estimates of $11.49 per share [4] - The company expects fiscal 2026 operating cash flow of $2.5 billion to $2.6 billion and free cash flow of $1.3 billion to $1.4 billion [4] Stock Performance - Constellation Brands shares rose 3.09% in after-hours trading, reaching $143 at the time of publication [5]

Constellation Brands, the owner of the Corona and Modelo Especial brands in the US, reported better-than-expected results for its fiscal second quarter, citing robust beer and wine sales https://t.co/RRRDGr8rdM ...

Sales and Revenue Projections - Fiscal 2026 net sales growth is projected to decline by 6% to 4% for the enterprise, with beer sales expected to decline by 4% to 2%[11] - Reported EPS is projected to be between $10.77 and $11.07, compared to the previous range of $12.07 to $12.37[11] - Operating cash flow is expected to be between $2.5 billion and $2.6 billion, down from the previous estimate of $2.7 billion to $2.8 billion[11] - Operating income guidance for the year ending February 28, 2026, is projected between $2,719 million and $2,790 million, reflecting a percentage change of 666% to 686% compared to the actual operating income of $354.9 million for the year ended February 28, 2025[37] - Forecasted diluted EPS (GAAP) for the year ending February 28, 2026, is estimated to be between $10.77 and $11.07, with a forecasted comparable EPS (Non-GAAP) ranging from $11.30 to $11.60[49] - Free cash flow (Non-GAAP) guidance for the year ending February 28, 2026, is projected between $1,300 million and $1,400 million, with net cash provided by operating activities estimated at $2,500 million to $2,600 million[51] - Comparable operating income (Non-GAAP) for the year ending February 28, 2026, is expected to be between $2,864 million and $2,935 million, showing a decrease of 9% to 11% compared to the actual comparable operating income of $3,230.2 million for the year ended February 28, 2025[37] Cost and Expense Management - Corporate expenses are expected to decrease to $225 million, down from $265 million, due to lower compensation and benefits expenses[11] - The company recognized costs related to the 2025 Restructuring Initiative, which amounted to $41 million for the year ended February 28, 2025[40] - Strategic business reconfiguration costs recognized by the company amounted to $6 million for the year ended February 28, 2025[43] - The company expects to incur $0.22 per share in assets held for sale impairment and related expenses for the year ending February 28, 2026[49] Market Performance and Trends - Segment operating income for beer is anticipated to decline by 9% to 7%, impacted by lower volumes and additional tariffs[11] - High-end beer buy rates have declined by 1.1% in July, reflecting ongoing consumer demand headwinds[15] - Hispanic consumer high-end beer buy rates decreased by 3.5% in July, indicating a significant impact on this demographic[22] - The company achieved approximately $445 million in beer cost savings from FY24 through Q1 FY26[25] - The company gained distribution and shelf space with a growth of MSD% in points of distribution across the country[24] - The company is the 1 dollar share gainer in the total beer category and the 1 new beer brand[25] Impairments and Divestitures - The company reported a goodwill impairment of $2,797.7 million, primarily due to negative trends in the Wine and Spirits business[47] - The company reported a net gain from the SVEDKA Divestiture, contributing to the overall financial performance[46] - The company anticipates a net income tax expense of $0.03 per share recognized as a result of the 2025 Wine Divestitures[49]

Group 1 - Constellation Brands, Inc. reported its second quarter fiscal 2026 financial results, with a conference call scheduled for October 7, 2025, to discuss these results and the company's outlook [1] - The company is a leading international producer and marketer of beer, wine, and spirits, with operations in the U.S., Mexico, New Zealand, and Italy [2] - Constellation Brands aims to build beloved brands and anticipates market trends to deliver value to consumers, shareholders, and employees, contributing to its status as one of the fastest-growing large CPG companies in the U.S. [2] Group 2 - The company's product portfolio includes high-end imported beers like Corona Extra and Modelo Especial, a variety of wines such as The Prisoner Wine Company and Robert Mondavi Winery, and craft spirits like Casa Noble Tequila [3] - Constellation Brands emphasizes sustainability and responsibility in its operations, integrating an ESG strategy focused on environmental stewardship, community investment, and promoting responsible alcohol consumption [4]

Core Viewpoint - Constellation Brands Inc has gained favor with Berkshire Hathaway, which has increased its stake in the company multiple times, indicating potential undervaluation and investor interest in recovery signs ahead of the upcoming earnings report [1][5][6]. Earnings Estimates - Analysts project Constellation Brands to report second-quarter revenue of $2.46 billion, a decrease from $2.92 billion in the same quarter last year [2]. - Expected earnings per share (EPS) for the second quarter is $3.38, down from $4.32 in the previous year [2][3]. - The company missed EPS estimates in the first quarter but has beaten analyst estimates in nine of the last ten quarters overall [3]. Analyst Sentiment - Analysts have been reducing their price targets for Constellation Brands ahead of the quarterly results, with Bank of America Securities lowering its target from $182 to $150 and downgrading the stock from Neutral to Underperform due to soft beer consumption [4]. - Other analysts have also adjusted their price targets downward, with UBS lowering from $205 to $175, Goldman Sachs from $196 to $168, Wells Fargo from $170 to $155, and Citigroup from $155 to $145 [9]. Key Items to Watch - Berkshire Hathaway's stake in Constellation Brands has increased by 114% in the first quarter and by 12% in the second quarter, currently holding 13.4 million shares valued at $1.9 billion [6]. - The stake represents approximately 7.6% ownership of Constellation Brands, although it constitutes only 0.6% of Berkshire Hathaway's investment portfolio [6]. - The company has faced challenges with Modelo Especial losing its title as the bestselling beer in America, now surpassed by Michelob ULTRA, attributed to weaker demand among Hispanic consumers [8][10]. Company Guidance - Constellation Brands previously lowered its full-year guidance, expecting net beer sales to decline by 2% to 4%, compared to an earlier forecast of flat to a gain of 3% year-over-year [11]. - Analysts and investors will be monitoring if there are any improvements in guidance during the upcoming earnings report [11]. Stock Performance - Constellation Brands' stock has decreased by 2.4% to $138.75, with a year-to-date decline of 37.7% in 2025 [11].