Constellation Brands(STZ) - 2026 Q2 - Quarterly Results

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]