Shares of Constellation Brands (NYSE:STZ) fell 8% Tuesday morning following the company’s substantial reduction of its fiscal 2026 earnings forecast, citing a challenging macroeconomic backdrop that is weighing on consumer demand.
The company now expects comparable earnings per share of $11.30-$11.60, significantly below its previous range of $12.60-$12.90 and analysts’ consensus of $12.66. Constellation also revised its enterprise organic net sales projection, anticipating a 4%-6% decline versus its earlier guidance of a 2% drop to 1% growth.
Within the beer segment, home to brands such as Corona and Modelo, net sales are now forecast to fall 2%-4%, a reversal from the previously expected 0%-3% growth. Operating income for the beer business is projected to decline 7%-9%, compared with prior guidance of 0%-2% growth.
The company attributed the revisions to “incremental macroeconomic headwinds affecting consumer demand” and noted that high-end beer buy rates have slowed in recent months due to decreases in both trip frequency and spending per trip. Constellation specifically highlighted that Hispanic consumers, a key demographic for its beer portfolio, showed a sharper decline in premium beer purchases compared to the broader market.
“We continue to navigate a challenging macroeconomic environment that has dampened consumer demand and led to more volatile consumer purchasing behavior since our first quarter of fiscal 2026,” said Constellation Brands President and CEO Bill Newlands.
The company also lowered its free cash flow guidance to $1.3-$1.4 billion from the previous $1.5-$1.6 billion. For Q2, Constellation anticipates that inventory rebalancing at the distributor level will occur sooner than usual, resulting in shipments lagging depletions by 6.0-7.0 points.
Despite these headwinds, Constellation emphasized that through July it increased volume share in 49 of 50 U.S. states and remained the top dollar share gainer in the total U.S. beer market.
Constellation Brands stock price
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