Strong beer performance lifts quarterly results
Constellation Brands Inc Class A (NYSE:STZ) reported first-quarter results ahead of Wall Street expectations, supported by continued strength in its beer division.
Adjusted earnings came in at $3.43 per share, surpassing the consensus forecast of $3.25 by $0.18. Revenue reached $2.43 billion, slightly above analysts’ expectations of $2.41 billion, although total sales declined 3% compared with the same period a year earlier.
Shares rose 2.4% in premarket trading on Wednesday following the results.
Beer segment offsets weakness elsewhere
The company’s beer business remained its primary growth engine, with net sales increasing 2% to $2.28 billion and operating income also rising 2% to $891.4 million.
Beer shipment volumes grew 1.8%, while Constellation continued to gain the largest dollar share among beer brands across tracked US retail channels.
Within the wine and spirits division, organic net sales increased 8%. However, reported net sales fell 47% following the divestiture of several wine brands completed in 2025.
Analysts highlight broad earnings beat
Barclays analysts described the quarterly performance as stronger than anticipated despite softer expectations for the beer business in recent weeks.
“STZ just reported a better-than-expected quarter across all key metrics, albeit in the context of estimates for the beer division that had moderated in recent weeks given weak industry scanner data,” the bank said in a post-results note.
“The majority of the beat stemmed from better topline and margins, but we estimate a ~4c tailwind from BTL items (namely tax),” Barclays added.
Company maintains full-year guidance
Constellation reaffirmed its fiscal 2027 adjusted earnings guidance of between $11.20 and $11.90 per share. The midpoint of $11.55 remains below analysts’ consensus estimate of $11.74.
The company continues to forecast enterprise organic net sales growth of between negative 1% and positive 1%, alongside free cash flow of $1.6 billion to $1.7 billion.
Performance across the beer portfolio was mixed. Modelo Especial recorded an approximate 2% decline in depletion volumes, while Corona Extra fell by more than 5%. In contrast, Pacifico, Victoria and Modelo Chelada delivered growth of 21%, 14% and 6%, respectively.
Operating cash flow increased 4% to $662 million, while free cash flow rose 9% to $485 million.
“Our portfolio continues to benefit from the strength of our brands, disciplined commercial execution, and our ability to connect with consumers across a broad range of occasions,” said President and Chief Executive Officer Nicholas Fink.
During the quarter, Constellation returned more than $400 million to shareholders through $324 million of share repurchases and dividend payments.