Core Viewpoint - Constellation Brands reported a decline in revenue and earnings per share (EPS) for the quarter ended November 2025, indicating potential challenges in its financial performance [1]. Financial Performance - Revenue for the quarter was $2.22 billion, down 9.8% year-over-year, but exceeded the Zacks Consensus Estimate of $2.18 billion by 2.18% [1]. - EPS for the quarter was $3.06, compared to $3.25 a year ago, missing the consensus estimate of $2.65 [1]. Key Metrics - Net Sales for Wine and Spirits were $213.1 million, significantly above the average estimate of $170.25 million, but represented a year-over-year decline of 50.6% [4]. - Net Sales for Beer were $2.01 billion, matching the average estimate, with a slight year-over-year decrease of 1.1% [4]. - Operating Income for Wine and Spirits was $33.7 million, exceeding the estimate of $10.85 million [4]. - Operating Income for Beer was $763.5 million, surpassing the average estimate of $724.82 million [4]. - Corporate Operations and Other reported an Operating Income of -$58.3 million, better than the estimated -$61.78 million [4]. Stock Performance - Shares of Constellation Brands have returned +0.2% over the past month, underperforming the Zacks S&P 500 composite's +1.2% change [3]. - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance in the near term [3].

Core Viewpoint - Constellation Brands is expected to report a significant decline in quarterly earnings and revenues, with earnings per share projected at $2.66, down 18.2% year-over-year, and revenues forecasted at $2.18 billion, reflecting an 11.6% decrease [1]. Earnings Estimates - There has been no revision in the consensus EPS estimate for the quarter over the last 30 days, indicating that analysts have maintained their initial forecasts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Key Metrics Projections - Analysts estimate 'Net Sales- Wine and Spirits' to be $170.25 million, representing a decline of 60.5% from the previous year [5]. - The consensus for 'Net Sales- Beer' is projected at $2.01 billion, indicating a slight decrease of 1% year-over-year [5]. - 'Operating Income- Wine and Spirits' is expected to be $10.85 million, a significant drop from $95.20 million in the same quarter last year [6]. - 'Operating Income- Beer' is projected to reach $729.44 million, down from $769.90 million year-over-year [6]. Stock Performance - Constellation Brands shares have increased by 1.7% over the past month, outperforming the Zacks S&P 500 composite, which rose by 0.8% [6]. - The company holds a Zacks Rank of 4 (Sell), suggesting it is expected to underperform the overall market in the near term [6].

Group 1: Trade Negotiations - The EU and US are set to restart trade negotiations after a two-month pause to address unresolved issues in their tariff deal from July [1][2] - High-level meetings will take place in Brussels involving US commerce secretary Howard Lutnick, trade representative Jamieson Greer, EU ministers, commissioners, and industry leaders [1][2] Group 2: Tariff Issues - Washington officials express frustration over the EU's slow implementation of the July deal, which is not legally binding and requires parliamentary approval [3] - Significant outstanding issues include the 50% tariffs on steel and aluminum, separate tariffs on steel-containing products, and food and drink levies [3] Group 3: Member State Concerns - Several EU member states, including France and Ireland, are advocating for the removal of the 15% tax on wine and spirits, which has impacted their exports [4] - The EU's trade commissioner and other officials will discuss the ongoing chip supply crisis from China during the meetings [4] Group 4: Industry Impact - Industry leaders, including those from Volkswagen and TotalEnergies, will participate in discussions, emphasizing the need to address the impact of steel derivatives on the trade deal [5] - The US has listed 407 products with steel elements facing separate tariffs, with plans to add 700 more products, causing significant challenges for exporters [5][6] Group 5: Strategic Alignment - The EU and US will explore aligning their domestic steel industries to protect against cheaper Chinese imports, with hopes that new anti-dumping proposals will lead to reduced tariffs on EU steel [7]

Financial Performance - The company updated its FY26 reported EPS outlook to $986-$1016 and affirmed its comparable EPS outlook of $1130-$1160[15] - The company affirmed its FY26 targets for operating cash flow of $25 billion to $26 billion and free cash flow of $13 billion to $14 billion[15] - Enterprise Q2 FY26 reported net sales were $2481 billion, a 15% decrease compared to Q2 FY25, while organic net sales also decreased by 8%[23, 26] - The Beer Business experienced a high-single digit net sales decline and a low-double digit operating income decline, with a 200 bps year-over-year operating margin contraction to 406%[17] - The Wine and Spirits Business saw a double-digit organic net sales decline and triple-digit operating income declines, with operating margin contraction from 181% to (146%)[18] Capital Allocation - The company maintained its net leverage ratio at a target of approximately 30X[16, 21] - The company declared a dividend of $102 per Class A share[16] - The company executed $298 million of share repurchases in Q2, bringing the fiscal YTD total to $604 million[16, 21] - Capital expenditures in Q2 were $217 million, bringing the fiscal YTD total to $410 million, primarily focused on Beer brewing capacity additions[16, 21] Outlook - The company continues to expect FY26 organic net sales for Wine and Spirits to decline 17%-20% and organic operating income to decline 97%-100%[18] - The company affirms its FY26 outlook for Beer Business net sales to decline 2%-4% and operating income to decline 7%-9%[17]

Core Insights - Constellation Brands reported revenue of $2.48 billion for the quarter ended August 2025, a decrease of 15% year-over-year, with EPS at $3.63 compared to $4.32 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $2.46 billion by 0.98%, while the EPS surpassed the consensus estimate of $3.37 by 7.72% [1] Revenue and Earnings Performance - Net Sales for Wine and Spirits were reported at $136 million, below the five-analyst average estimate of $138.99 million, reflecting a significant year-over-year decline of 65% [4] - Net Sales for Beer reached $2.35 billion, slightly above the $2.33 billion average estimate, but still represented a year-over-year decrease of 7.3% [4] - Operating Income for Wine and Spirits was reported at -$19.8 million, worse than the estimated -$9.36 million [4] - Operating Income for Beer was $951.6 million, exceeding the average estimate of $911.22 million [4] - Corporate Operations and Other reported an Operating Income of -$45.6 million, better than the estimated -$53.47 million [4] Stock Performance - Shares of Constellation Brands have returned -4.2% over the past month, contrasting with the Zacks S&P 500 composite's increase of 4.3% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Insights - Constellation Brands is expected to report quarterly earnings of $3.37 per share, a decline of 22% year-over-year, with revenues forecasted at $2.46 billion, reflecting a 15.8% decrease compared to the previous year [1] - Analysts have revised their consensus EPS estimate down by 6.5% over the past 30 days, indicating a collective reassessment of the company's financial outlook [2] - The relationship between earnings estimate trends and short-term stock price movements is well-documented, highlighting the importance of these revisions for investor sentiment [3] Financial Metrics - Analysts project 'Net Sales- Wine and Spirits' to be $138.99 million, indicating a significant year-over-year decline of 64.2% [4] - 'Net Sales- Beer' is estimated at $2.33 billion, suggesting an 8% decrease year-over-year [5] - 'Operating Income- Wine and Spirits' is forecasted to be -$9.36 million, a stark contrast to the $70.50 million reported in the same quarter last year [5] - 'Operating Income- Beer' is expected to reach $911.22 million, down from $1.08 billion in the previous year [5] Market Performance - Over the past month, Constellation Brands' shares have declined by 11%, while the Zacks S&P 500 composite has increased by 3.5% [6] - The company currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the overall market in the near future [6]

Fiscal 2026 Outlook Update - The company updated its fiscal year 2026 outlook, projecting organic net sales to decline by 6% to 4% for the enterprise and 4% to 2% for the beer business [11] - The company anticipates a reported operating income growth of 666% to 686%, but a comparable operating income decline of 11% to 9% [11] - Corporate expense is expected to be $225 million [11] - The company forecasts reported EPS of $10.77 to $11.07 and comparable EPS of $11.30 to $11.60 [11] - Operating cash flow is projected to be $2.5 billion to $2.6 billion, with free cash flow estimated at $1.3 billion to $1.4 billion [11] Market and Consumer Trends - Ongoing U S consumer demand headwinds are impacting the business, with employment in 4,000+ calorie jobs remaining pressured [12] - Consumer sentiment remains volatile and depressed [12, 13] - High-end beer buy rates are declining due to ongoing consumer headwinds [14, 15] - The company's beer brands have higher levels of exposure to the Hispanic consumer, who are showing elevated concern about personal finances and the socioeconomic environment [17, 18, 19, 20] - Hispanic consumer high-end beer buy rates are down more than the total consumer [21, 22] Business Execution - The company is gaining distribution, shelf space, and volume share across the country, with mid-single-digit percentage growth in points of distribution and approximately 30,000 Shopper First Shelf resets [24] - The company has achieved approximately $445 million in beer cost savings from fiscal year 2024 through Q1 fiscal year 2026 [25]

Core Insights - Constellation Brands reported a revenue of $2.52 billion for the quarter ended May 2025, reflecting a year-over-year decline of 5.5% and an EPS of $3.22, down from $3.57 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $2.57 billion, resulting in a surprise of -2.07%, while the EPS also missed the consensus estimate of $3.34 by -3.59% [1] Financial Performance Metrics - Net Sales for Wine and Spirits were reported at $280.5 million, significantly below the five-analyst average estimate of $297.74 million, marking a year-over-year decline of 27.9% [4] - Net Sales for Beer were $2.23 billion, slightly below the $2.27 billion average estimate, with a year-over-year change of -1.7% [4] - Operating Income for Wine and Spirits was reported at -$6 million, contrasting with the four-analyst average estimate of $12.38 million [4] - Operating Income for Beer was $873.4 million, compared to the average estimate of $899.7 million [4] - Operating Income for Corporate Operations and Other was -$57.5 million, slightly better than the average estimate of -$63.99 million [4] Stock Performance - Shares of Constellation Brands have returned -6.6% over the past month, while the Zacks S&P 500 composite has seen a +5.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Constellation Brands is expected to report a decline in quarterly earnings and revenues, indicating potential challenges in its business performance [1][2]. Earnings Estimates - Analysts predict quarterly earnings of $3.37 per share, a decrease of 5.6% year-over-year [1]. - Revenue is forecasted at $2.57 billion, reflecting a year-over-year decrease of 3.4% [1]. - The consensus EPS estimate has been revised down by 0.5% in the last 30 days [2]. Key Metrics - Estimated 'Net Sales- Wine and Spirits' is projected at $297.74 million, a significant decline of 23.5% year-over-year [5]. - 'Net Sales- Beer' is expected to reach $2.27 billion, showing a minimal decrease of 0.1% year-over-year [5]. - 'Operating Income- Wine and Spirits' is anticipated to be $12.38 million, down from $59.70 million in the same quarter last year [5]. - 'Operating Income- Beer' is projected at $899.70 million, compared to $941.60 million reported in the same quarter last year [6]. Stock Performance - Shares of Constellation Brands have decreased by 10.2% over the past month, contrasting with a 6% increase in the Zacks S&P 500 composite [7]. - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market in the near future [7].