Constellation Brands shares sink as Modelo maker slashes guidance, sees Hispanic consumer decline

Core Viewpoint - Constellation Brands has reduced its fiscal year outlook due to a challenging economic environment impacting alcohol sales, particularly in the beer segment [1][2][3] Financial Outlook - The company has lowered its comparable earnings per share forecast for fiscal 2026 to a range of $11.30 to $11.60, down from $12.60 to $12.90, resulting in an approximate 8% decline in stock price [2] - Organic net sales are expected to decrease by 4% to 6%, a significant revision from the previous expectation of 1% growth to a 2% decline [3] - Net beer sales are projected to fall by 2% to 4%, compared to earlier expectations of flat to 3% growth [4] - Free cash flow estimates have been reduced from $1.5 to $1.6 billion to a new range of $1.3 to $1.4 billion [4] Consumer Behavior - The CEO noted a decline in high-end beer purchase rates, with both trip frequency and spending per trip decreasing [3] - There has been a notable drop in demand from Hispanic consumers, who represent about half of the company's beer sales, attributed to concerns over immigration policies and job security [5] Strategic Initiatives - The company is focusing on strategic objectives such as distribution gains, disciplined innovation, and brand investment [4] - Constellation has initiated a portfolio repositioning by divesting "mainstream" wines and has authorized a share repurchase program, resulting in $604 million in buybacks in the first half of the fiscal year [6]