Constellation reported lower third-quarter sales as beer sales lag amid weak consumer sentiment and a pullback in spending from Hispanic drinkers due to the Trump administration's immigration crackdow... ...

Constellation Brands, Inc. (NYSE:STZ) shares climbed in Wednesday's extended trading after the company released its third quarter earnings report, beating estimates on the top and bottom lines. Here's a look at the key figures from the quarter. STZ stock is moving. Watch the price action here.The Details: Constellation Brands reported quarterly earnings of $3.06 per share, which beat the analyst consensus estimate of $2.64, according to Benzinga Pro data.Quarterly revenue came in at $2.22 billion, which bea ...

Financial Performance - Reported net sales for Q3 FY2026 were $2,223 million, a decline of 10% year-over-year[1] - Comparable diluted EPS for Q3 FY2026 was $3.06, down 6% from the previous year[1] - Fiscal 2026 reported EPS outlook is updated to $9.72 - $10.02, with comparable EPS outlook affirmed at $11.30 - $11.60[6] - Consolidated net sales for the three months ended November 30, 2025, were $2,222.8 million, a decrease of 10% compared to $2,463.8 million for the same period in 2024[46] - Gross profit for the three months ended November 30, 2025, was $1,183.2 million, down 8% from $1,284.3 million in the prior year[46] - Operating income for the three months ended November 30, 2025, was $692.0 million, a 13% decline from $793.0 million in 2024, while operating margin decreased to 31.1% from 32.2%[46] - Net income attributable to CBI for the three months ended November 30, 2025, was $502.8 million, an 18% decrease from $615.9 million in 2024[48] - Comparable EPS for the three months ended November 30, 2025, was $3.06, a 6% decline from $3.25 in the same period last year[48] - The company reported a significant increase in operating income for the nine months ended November 30, 2025, reaching $2,279.8 million, compared to $505.2 million in 2024, marking a 351% increase[46] - The company experienced a 10% decrease in gross profit for the nine months ended November 30, 2025, totaling $3,759.8 million, down from $4,199.9 million in 2024[46] Shareholder Returns - The company returned nearly $1.4 billion to shareholders through share repurchases and maintained a ~30% dividend payout ratio[5] - The company declared cash dividends of $1.02 per common share for the three months ended November 30, 2025, slightly up from $1.01 in the same period of 2024[34] - Dividends paid during the nine months ended November 30, 2025, totaled $(538.8) million, slightly down from $(551.3) million in the previous year[38] Cash Flow and Liquidity - Year-to-date operating cash flow reached $2.1 billion, with free cash flow of $1.45 billion[6] - Cash and cash equivalents increased to $152.4 million as of November 30, 2025, compared to $68.1 million as of February 28, 2025, an increase of 123.4%[32] - The company reported a net cash provided by operating activities of $2,106.2 million for the nine months ended November 30, 2025, compared to $2,557.5 million for the same period in 2024, a decrease of 17.6%[36] - For the nine months ended November 30, 2025, net cash provided by operating activities was reported at $2.106 billion, down from $2.557 billion in the prior year[71] Business Segments Performance - The Beer Business gained dollar and volume share, outperforming the total beverage alcohol category by nearly 0.5 percentage points[6] - Wine and Spirits net sales declined 51%, driven by a 70.6% decrease in shipment volumes due to divestitures[15] - Beer net sales for the three months ended November 30, 2025, were $2,009.7 million, a decline of 1% from $2,032.4 million in 2024[41] - Wine and Spirits net sales for the three months ended November 30, 2025, were $213.1 million, a significant drop of 51% compared to $431.4 million in 2024[41] - Wine net sales dropped 53% to $174.5 million for the three months ended November 30, 2025, compared to $374.6 million in 2024[46] - Spirits net sales decreased by 32% to $38.6 million for the three months ended November 30, 2025, down from $56.8 million in the previous year[46] Strategic Initiatives - The company anticipates potential impacts from its acquisition and divestiture strategies, including the 2025 Wine Divestitures, which may affect future performance[30] - The company completed the sale of the SVEDKA brand on January 6, 2025, and the 2025 Wine Divestitures on June 2, 2025, impacting net sales[40] - The company recognized costs related to the 2025 Restructuring Initiative aimed at optimizing business performance, with an estimated cost of $73 million for the year ending February 28, 2026[54][66] - The company incurred strategic business reconfiguration costs of $6 million as part of its efforts to streamline operations[66] Asset and Liability Management - Total current assets decreased to $2,909.1 million as of November 30, 2025, from $3,716.4 million as of February 28, 2025, a decline of 21.7%[32] - Total liabilities decreased to $13,683.1 million as of November 30, 2025, from $14,517.5 million as of February 28, 2025, a reduction of 5.8%[32] - Cash and cash equivalents at the end of the period were $152.4 million, an increase from $73.7 million at the end of the previous year[38] Impairments and Losses - The company experienced a goodwill impairment of $2,250.0 million in the nine months ended November 30, 2024, which significantly impacted net income for that period[34] - The company reported a goodwill impairment related to negative trends in the Wine and Spirits business, impacting financial results significantly[58] - A net loss of $1.1 million was recorded from the sale of assets for the three months ended November 30, 2025, while a net gain of $3.0 million was reported for the nine months ended November 30, 2024[59] - The company recognized a loss of $20.7 million related to foreign currency as a result of tax examinations and assessments[59] Future Guidance - Free cash flow guidance for the year ending February 28, 2026, is projected to be between $1.3 billion and $1.4 billion, with net cash provided by operating activities estimated at $2.5 billion to $2.6 billion[71] - Operating income (GAAP) guidance for the year ending February 28, 2026, is set between $2.685 billion and $2.756 billion, reflecting a significant increase from the previous year[66]

Group 1: Financial Results - Constellation Brands, Inc. reported its third quarter fiscal 2026 financial results on January 7, 2026 [1] - A conference call to discuss the financial results and outlook will be hosted by the CEO and CFO on January 8, 2026 [1] Group 2: 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 [2] - The company's mission is to build brands that people love, focusing on elevating human connections and anticipating market trends [2] Group 3: Product Portfolio - The company offers a high-end, imported beer portfolio including Corona Extra, Modelo Especial, and other brands like Pacifico and Victoria [3] - Its wine brands include The Prisoner Wine Company, Robert Mondavi Winery, Kim Crawford, and others [3] - The craft spirits brands feature Casa Noble Tequila and High West Whiskey [3] Group 4: Sustainability and ESG Strategy - As an agriculture-based company, Constellation Brands emphasizes sustainable and responsible operations [4] - The company's ESG strategy focuses on environmental stewardship, community investment, and promoting responsible beverage alcohol consumption [4]

Core Viewpoint - Constellation Brands, Inc. is a significant player in the beverage industry, focusing on beer, wine, and spirits, with a diverse portfolio of well-known brands and a presence in multiple countries [1] Stock Performance - The average target price for Constellation Brands has increased slightly from $156.57 to $158, indicating a modest positive sentiment among analysts in the short term [2] - The current target price is lower than last year's $188.11, reflecting a more cautious outlook over the past year [2] Future Outlook - Despite challenges anticipated in 2025, Constellation Brands is focusing on cost-cutting and expects a resurgence in beer demand among Hispanic consumers [3] - Analyst Lauren Lieberman from Barclays has set a price target of $281, indicating optimism about the company's future performance [3] Earnings Report - The upcoming third-quarter earnings report is expected to show strong performance with a double-beat in revenue and earnings per share, which could positively influence analyst target prices and investor sentiment [4] Strategic Initiatives - Market trends and strategic initiatives, such as new product launches or partnerships, are crucial factors that could impact Constellation Brands' stock outlook as the company navigates its challenges [5]

Core Viewpoint - Constellation Brands is focusing on cost reductions and anticipating a rebound in Hispanic beer demand to enhance its earnings after a challenging 2025 and several forecast downgrades [1] Group 1 - The company experienced a difficult year in 2025, leading to multiple cuts in earnings forecasts [1] - Constellation Brands is implementing cost-cutting measures as part of its strategy to improve financial performance [1] - There is an expectation for a recovery in demand for beer among Hispanic consumers, which the company is betting on to boost earnings [1]

With U.S. stock futures trading mixed this morning on Wednesday, some of the stocks that may grab investor focus today are as follows:Wall Street expects Albertsons Companies Inc. (NYSE:ACI) to post quarterly earnings at 68 cents per share on revenue of $19.17 billion before the opening bell, according to data from Benzinga Pro. Albertsons shares gained 1.1% to $17.30 in after-hours trading.Penguin Solutions Inc. (NASDAQ:PENG) reported better-than-expected first-quarter financial results. The company report ...

Core Viewpoint - Constellation Brands Inc is expected to report a decline in earnings and revenue for its fiscal third quarter, reflecting ongoing challenges in the wine and spirits industry [1] Financial Performance - Analysts predict earnings of $2.66 per share and revenue of $2.18 billion, marking a year-over-year decrease of 18.2% in earnings and 11.6% in revenue [1] - The company's previous results exceeded estimates despite a decline compared to the same quarter last year, leading to a fourth consecutive post-earnings gain for the stock [2] Stock Performance - The stock has rebounded slightly from a five-year low of $126.45, currently trading at $143.06, but remains down 35.8% year over year [3] - The stock has experienced an average earnings swing of 4.4% over the last two years, with options pricing in an 8.3% move for the upcoming earnings report [2] Market Sentiment - A positive reaction to the earnings report could trigger short covering, as short interest represents 7% of the stock's available float, although it has begun to unwind [5]

Core Viewpoint - Constellation Brands is expected to report a double-beat in revenue and earnings per share for the third quarter, indicating manageable tariff concerns [1] Earnings Estimates - Analysts predict third-quarter revenue of $2.16 billion, down from $2.46 billion in the same quarter last year [2] - Expected earnings per share for the third quarter is $2.64, a decrease from $3.25 in the previous year [2] - The company has beaten analyst estimates in seven of the last ten quarters for revenue and nine of the last ten quarters for earnings per share [2] Analyst Commentary - Needham analyst Gerald Pascarelli describes expectations for the third quarter as "pretty muted" [3] - Pascarelli maintains a Buy rating with a price target of $180, noting a projected 5% decline in depletions and a 3.5% year-over-year decline in beer shipments [4] - Overall revenue is estimated to decline by 12.2% year over year, with organic revenue expected to decrease by 3.3% [5] Management Guidance - Analysts do not anticipate significant changes in management's tone or guidance, with expectations that the company will reiterate its current outlook [6] - The Hispanic consumer market remains challenging, and there are no indications of a significant change in sentiment [6] Future Outlook - The company may provide positive commentary, with favorable forward comparables and the 2026 World Cup seen as a potential revenue catalyst [7] - Analysts believe that much of the current negative sentiment is already reflected in the stock price [7] Key Items to Watch - Wells Fargo maintains an Overweight rating and raises the price target from $155 to $160 [8] - Jefferies downgrades from Buy to Hold and lowers the price target from $170 to $154 [8] Business Performance - The beer business reported a high-single-digit decline in net sales despite beating estimates in the second quarter [9] - Constellation holds the U.S. license for importing popular brands like Modelo and Corona, which are among the top five imported beers in America [9] Tariff Impact - The company has been affected by tariffs, and analysts are looking for quantification of tariff impacts on costs for the third and fourth quarters [10] World Cup Potential - Analysts see potential benefits from the 2026 World Cup, with expectations for commentary on how the event could influence revenue and marketing strategies [11] Berkshire Hathaway Stake - Berkshire Hathaway has increased its stake in Constellation Brands, owning 13,400,000 shares by the end of the third quarter [12] - The new CEO of Berkshire, Greg Abel, is expected to closely monitor Constellation's financial results [13] Stock Performance - Constellation Brands stock is currently up 0.3% to $142.90, with a 52-week trading range of $126.45 to $226.22, and shares have declined by 35.9% over the past year [13]

Core Viewpoint - Constellation Brands is facing challenges with a projected decline in earnings and revenue, but is focusing on long-term growth through strategic investments in beer capacity and premium brands [1][4][6] Financial Performance - Anticipated earnings per share (EPS) for Constellation Brands is $2.65, reflecting an 18.2% decrease from the same quarter last year [2][6] - Revenue projections are estimated between $2.16 billion to $2.2 billion, representing an 11.6% drop year-over-year due to weak wine and spirits shipments [3][6] Strategic Initiatives - The company is investing in expanding its beer capacity in Mexico and emphasizing premium brands to strengthen market position and drive future revenue growth [4][6] Financial Metrics - Constellation Brands has a price-to-earnings (P/E) ratio of 20.49 and a price-to-sales ratio of 2.59, indicating market valuation [5] - The company's debt-to-equity ratio stands at 1.34, reflecting its financial leverage, while a current ratio of 1.08 suggests its ability to cover short-term liabilities [5]