Core Viewpoint - Constellation Brands, Inc. (NYSE: STZ) is expected to report its Q1'26 results on July 1, with no anticipation of exceptional performance in the operating results [1] Company Performance Expectations - The focus is on the company's operating performance for the upcoming quarter, with an emphasis on maintaining a long-term investment perspective [1]

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Constellation Brands due to lower revenues, with actual results being crucial for near-term stock price movements [1][2]. Earnings Expectations - The upcoming earnings report is expected to show quarterly earnings of $3.39 per share, reflecting a -5% change year-over-year, and revenues of $2.58 billion, down 3.2% from the previous year [3]. - The consensus EPS estimate has been revised 0.15% lower in the last 30 days, indicating a bearish sentiment among analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Constellation Brands is lower than the consensus estimate, resulting in an Earnings ESP of -2.69%, which complicates predictions of an earnings beat [12]. - A positive Earnings ESP is generally a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10]. Historical Performance - In the last reported quarter, Constellation Brands exceeded the expected earnings of $2.28 per share by delivering $2.63, resulting in a surprise of +15.35% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [14]. Conclusion - Constellation Brands does not currently appear to be a compelling candidate for an earnings beat, and investors should consider other factors when making decisions regarding the stock ahead of the earnings release [17].

Constellation Brands (STZ -1.34%) and Anheuser-Busch InBev (BUD 0.01%) both sell alcohol. The former produces beer, wine, and spirits, and the latter is the world's largest brewer by volume. Typically, alcohol companies do well in good and bad times. Of course, these remain uncertain times, particularly given economic policies such as tariffs. That makes it challenging to figure out how consumers will react. Still, investors should concentrate on the long term. Which of these two alcoholic beverage companie ...

Core Insights - Constellation Brands has faced significant challenges over the past five years, resulting in an 8% decline in stock value while the S&P 500 rose by 86% [1] - The company generates the majority of its revenue from its beer business, which has seen a shift in revenue distribution from 67.3% in fiscal 2020 to 83.7% in fiscal 2025 [4][6] - Analysts predict a decline in revenue from $10.2 billion in fiscal 2025 to $9.9 billion by fiscal 2028, but expect profitability to return in fiscal 2026 [13] Business Performance - In fiscal 2025, Constellation's revenue breakdown was 83.7% from beer, 14.2% from wine, and 2.1% from spirits, indicating a significant shift towards beer [4] - Revenue growth from beer has decelerated, with a 5% growth rate in fiscal 2025 compared to 11% in the previous two years [5][7] - The wine and spirits segments have experienced declining revenues, with wine revenue decreasing by 7% and spirits by 11% in fiscal 2025 [5][10] Strategic Moves - The company has divested lower-margin wine and spirits brands to focus on premium offerings, which has impacted overall revenue [6] - Management plans to continue pruning its wine and spirits portfolio to strengthen higher-margin brands [10] - Constellation is exploring options to mitigate tariff impacts, including potentially increasing prices, although demand among younger consumers may limit pricing power [12] Future Outlook - Analysts expect a compound annual growth rate of 7% in EPS from fiscal 2026 to fiscal 2028, with profitability anticipated to return in fiscal 2026 [13][14] - If the company can navigate tariff challenges and refine its product portfolio, stock prices could rise by approximately 45% over the next five years [14] - Despite potential gains, Constellation may still underperform compared to other consumer staples and the S&P 500 [15]

Core Viewpoint - Constellation Brands is facing challenges in the beverage alcohol sector, leading to a more conservative outlook for fiscal years 2026 and beyond [5]. Group 1: Company Overview - Constellation Brands is a leading international producer and marketer of beer, wine, and spirits, primarily operating in the United States and Mexico [1]. - The company generates approximately $10 billion in annual revenues and holds the number one beer brand in the U.S., Modelo, along with other notable brands like Corona and Pacifico [1]. Group 2: Market Trends - The start of the calendar year has been more challenging than anticipated for the beverage alcohol industry, prompting a reassessment of market trends and future outlooks [5]. - Current consumer-level challenges are impacting the overall performance and expectations for the company [6].

Core Insights - Constellation Brands, Inc. (STZ) has experienced a significant decline in its stock price, dropping 26.5% over the past six months, contrasting with a 2.5% and 2.8% increase in the industry and Consumer Staples sector, respectively [1] - The company's beer sales growth outlook has been revised downward from 7%-9% to 2%-4% for fiscal years 2027 and 2028 due to weakening demand and macroeconomic challenges [10] Stock Performance - STZ is currently trading below its 50-day and 200-day moving averages, indicating potential weakness in momentum [3] - The stock's underperformance is attributed to declining beer demand and broader macroeconomic headwinds [7] Factors Behind Stock Decline - The core beer business, traditionally a strong growth driver, is facing decelerating depletion trends, particularly for key brands like Modelo and Corona, due to cautious spending among Hispanic consumers [9] - Rising input costs, particularly from tariffs on aluminum cans, inflation, and moderated volume growth have raised concerns about margin sustainability [11] Growth Strategies - Despite current challenges, STZ's focus on premiumization is driving growth in its Wine and Spirits segment, with key brands like The Prisoner, Kim Crawford, and Meiomi [12] - The company plans to invest nearly $2 billion from fiscal 2026 to 2028 to expand its Veracruz brewery and increase capacity from 48 million hectoliters to 55 million hectoliters by fiscal 2028 [13] Earnings Estimates - The Zacks Consensus Estimate for fiscal 2026 earnings per share (EPS) has been revised down by 0.9% to $12.74, indicating a year-over-year decline of 7.6% [14]

Core Insights - Constellation Brands, Inc. (STZ) is successfully implementing a premiumization strategy, leading to accelerated growth in its Power Brands, particularly in the beer segment [1] Group 1: Divestiture and Portfolio Restructuring - The company has completed the divestiture of its mainstream wine brands to The Wine Group, which includes brands like Woodbridge, Meiomi, and Robert Mondavi Private Selection [2][9] - The wine portfolio now focuses on exclusive wines priced at $15 and above, featuring renowned brands from top regions globally [3] - The craft spirits portfolio includes High West whiskey, Mi CAMPO tequila, and Casa Noble tequila, aligning with consumer-led premiumization trends [4] Group 2: Financial Outlook - For fiscal 2026, Constellation Brands anticipates net sales growth of 0-3% in the beer segment and a significant increase in enterprise operating income by 765-783% [5] - The medium-term outlook for fiscal 2027 and 2028 includes enterprise net sales growth of 2-4%, with operating income margins projected at 35-36% overall [6] - Earnings per share (EPS) growth is expected to be mid-single-digit to low-double-digit for fiscal 2027 and low-single-digit to mid-single-digit for fiscal 2028 [7] Group 3: Capacity Expansion and Market Position - The company is investing in capacity expansion in Mexico to meet demand for its high-end Mexican beer portfolio, aiming for a capacity of approximately 55 million hectoliters by fiscal 2028 [8] - Constellation Brands is focused on enhancing distribution and innovation to support its leading position in the beer market [8] Group 4: Challenges - The company faces challenges from rising selling, general, and administrative costs, as well as inflationary pressures affecting packaging and raw material costs [10]

Constellation Brands (STZ) 2025 Conference Summary Industry Overview - The conference focused on the beverage alcohol industry, particularly the beer segment, with a significant emphasis on the Hispanic consumer market and broader consumer trends. Key Points and Arguments Consumer Behavior and Market Trends - The Hispanic consumer segment, which constitutes roughly half of Constellation's business, is currently facing challenges due to inflation and immigration concerns, leading to reduced dining out and social occasions, with 75% of Hispanic consumers going to restaurants less [1][2][3]. - Despite these challenges, brand loyalty remains strong, and brand health metrics are at an all-time high [4]. - There is a noticeable shift in consumer spending habits, with Hispanic consumers spending less time in convenience stores and opting for broader market stores [6][7]. - Non-Hispanic consumers are also exhibiting value-seeking behavior, influenced by inflation, leading to trade-down behavior primarily in lower price segments [10][11]. Brand Performance and Strategy - Constellation Brands has successfully developed its non-Hispanic consumer base, with Modelo's demographic shifting from 80% Hispanic to 55% over recent years [11]. - The company maintains a strong market position, with Modelo identified as a significant growth driver, particularly in California where its market share is double the national average [44]. - Corona is expected to maintain a neutral growth trajectory, while Pacifico is emerging as a strong growth driver, particularly among younger consumers [47]. Financial Outlook and Guidance - The company anticipates a transitional year for its beer business, with a focus on maintaining a 39% to 40% margin target, supported by low single-digit volume growth and pricing strategies [25][27]. - A robust restructuring program is expected to yield savings exceeding $200 million, with a significant portion benefiting the wine and spirits business [22]. - Operating cash flow is projected to reach approximately $2.7 to $2.8 billion in fiscal 2026, with expectations for continued growth in subsequent years [74][78]. Innovation and Product Development - Constellation is focusing on price pack architecture to cater to varying consumer spending capabilities, introducing smaller pack sizes to meet consumer needs [16][17]. - The company is committed to maintaining a simple SKU assortment, which enhances efficiency and effectiveness in distribution [32][36]. - Investments in R&D and data analytics are aimed at improving product quality and consumer insights, with a focus on internal capabilities [90][92]. Marketing and Brand Support - Constellation Brands is committed to maintaining high marketing spend, with a focus on effective channels such as live sports and digital advertising [56][59]. - The company emphasizes the importance of brand health and consumer engagement, ensuring that marketing efforts are aligned with consumer trends [53][54]. Long-term Aspirations - The company aims to continue outperforming the market, gaining share, and ensuring that its stock reflects its operational results by 2030 [93][94]. Additional Important Insights - The company has increased its influence with major retailers, achieving category captain status in over 80% of accounts, which has contributed to share gains [66]. - Constellation's relationship with wholesalers is strong, with a focus on delivering growth and profitability [73]. - The company is strategically managing its debt profile, with plans for early redemption of senior notes to optimize its financial structure [82][84]. This summary encapsulates the key discussions and insights from the Constellation Brands conference, highlighting the current challenges and strategic initiatives within the beverage alcohol industry.

Core Viewpoint - Constellation Brands has announced the full redemption of its outstanding Senior Notes prior to maturity, indicating a strategic financial move to manage its debt obligations effectively [1][2]. Group 1: Redemption Details - The company will redeem all of its 4.75% Senior Notes due 2025 and 5.00% Senior Notes due 2026, with redemption dates set for July 2, 2025, and June 12, 2025, respectively [1]. - As of June 2, 2025, the total outstanding principal amount of the notes is $900.0 million [1]. Group 2: Company Overview - Constellation Brands is a prominent international producer and marketer of beer, wine, and spirits, with operations in the U.S., Mexico, New Zealand, and Italy [3]. - The company's brand portfolio includes well-known names such as Corona Extra, Modelo Especial, and Robert Mondavi Winery, among others [3].

Core Viewpoint - Constellation Brands has successfully completed the divestiture of its mainstream wine brands to The Wine Group, allowing the company to focus on a premium wine portfolio that aligns with consumer trends towards premiumization [1][3]. Group 1: Transaction Details - The divestiture includes mainstream wine brands such as Woodbridge, Meiomi, Robert Mondavi Private Selection, Cook's, SIMI, and J. Rogét sparkling wine, along with associated inventory, facilities, and vineyards [1]. - The retained portfolio consists of high-end wines priced predominantly at $15 and above, featuring brands like Robert Mondavi Winery, Schrader, Double Diamond, and Kim Crawford, among others [2]. Group 2: Strategic Focus - The company aims to reposition its portfolio to focus exclusively on higher-end products, which is expected to enhance performance in this segment over time [3]. - Constellation Brands emphasizes its commitment to aligning with consumer-led premiumization trends, which is anticipated to drive improved business performance [3]. Group 3: Company Overview - Constellation Brands is a leading international producer and marketer of beer, wine, and spirits, with operations in the U.S., Mexico, New Zealand, and Italy [4]. - The company is recognized for its dedication to building beloved brands and has become one of the fastest-growing large consumer packaged goods companies in the U.S. retail market [4].