1Q26 Revenue: $2.52B, -5.3% YoY, miss estimates by $30M
1Q26 Non-GAAP EPS: $3.22, miss estimates by $0.09
FY26 Guidance: For the Beer business, Constellation continues to project net sales growth of 0%-3%, operating income growth of 0%-2%, operating margin of approximately 39%-40% and capital expenditures of approximately $1.0B. For the Wine and Spirits business, the company maintains its outlook of organic net sales decline of 17%-20%, organic operating income decline of 97%-100% and capital expenditures of approximately $0.2B. The company updated its reported EPS outlook to $12.07-$12.37 while maintaining its comparable EPS outlook of $12.60-$12.90.
Comment: Constellation Brands missed first-quarter sales and profit expectations as tariff-related cost pressures and economic uncertainty weighed on consumer demand for beer and wine. Net sales came in at US$2.52bn, slightly below the US$2.55bn expected, while comparable EPS of US$3.22 missed estimates of US$3.31. Tariffs on beer imports and aluminum have raised input costs, while political tensions, including immigration crackdowns, have dampened consumption among key Hispanic consumers. Beer depletion volumes fell 2.6%, marking a sharp reversal from last year’s 6.4% growth. Despite these headwinds, the company reaffirmed its full-year fiscal 2026 guidance, including flat-to-modest growth in its core beer segment and steep declines in its wine and spirits division. Looking ahead, Constellation Brands remains committed to long-term growth in its beer portfolio by managing costs, adjusting pricing strategies, and investing in core brands like Modelo and Corona. However, ongoing macroeconomic uncertainty, tariff headwinds, and shifting consumer behavior may continue to pressure short-term performance. The company’s ability to maintain its full-year guidance, even amid current challenges, suggests disciplined financial management and a potential rebound as economic conditions stabilize and demand in its key segments recover. 2Q26recommended trading range: $160 to $180. Neutral Outlook.
