Constellation Brands Inc (NYSE: STZ) Surpasses Earnings Expectations

Core Insights - Constellation Brands Inc reported fiscal second-quarter earnings for 2026, achieving an EPS of $3.63, exceeding Wall Street's expectation of $3.37, marking a 7.72% earnings surprise [1][6] Financial Performance - Year-over-year earnings declined from $4.32 per share to $3.63, while revenue for the quarter was $2.48 billion, slightly above the estimated $2.46 billion but down from $2.92 billion a year ago, reflecting a 15% decrease in net sales [2][6] - The company reported a net income of $466 million, a significant improvement from a loss of $1.2 billion in the previous year [3][6] - Adjusted earnings, excluding restructuring costs, were $3.63 per share [3] Strategic Focus - Despite the challenging socioeconomic environment, the company remains committed to its strategic plans, focusing on share and distribution gains [3][6] Market Reaction - Following the earnings report, Constellation Brands' stock price increased approximately 3% in extended trading [4] Guidance and Challenges - The company reiterated its lowered full-year guidance, citing macroeconomic headwinds as a significant challenge [4][6] - The beer segment experienced a high-single-digit decline in net sales, while the wine and spirits business saw a double-digit decline in organic net sales [4] Financial Ratios - Constellation Brands has a price-to-sales ratio of approximately 2.43 and an enterprise value to sales ratio of about 3.57 [5] - The enterprise value to operating cash flow ratio stands around 11.60, indicating cash flow efficiency [5] - The debt-to-equity ratio is approximately 1.59, suggesting a higher level of debt compared to equity, while the current ratio is about 1.07, reflecting the company's ability to cover short-term liabilities [5]