Constellation Brands has cut its earnings forecast and projected a fall in annual beer sales.
Pointing to “volatile consumer purchasing behaviour”, the Modelo brewer lowered its outlook for earnings per share and both the sales and operating profit forecasts for its beer business.
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“We continue to navigate a challenging macroeconomic environment that has dampened consumer demand and led to more volatile consumer purchasing behaviour since our first quarter of fiscal 2026,” president and CEO Constellation Brands Bill Newlands said.
In April, the Pacífico brewer said pressure on Hispanic consumer sentiment in the US was affecting its beer business.
A month later, Constellation Brands indicated there were signs of confidence improving but today (2 September) Newlands said the company had been hit by a reduced appetite among Hispanic drinkers for pricier brews.
“Over the last several months, high-end beer buy rates decelerated sequentially, as both trip frequency and spend per trip declined. Notably, high-end beer buy rate declines for Hispanic consumers were more pronounced than general market declines, which has an outsized impact on our beer business compared to the broader beer category,” he said.
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By GlobalDataHowever, the Constellation Brands chief executive said the company had managed to grow its “volume share” in 49 of the 50 US states.
Citing Circana data, Newlands added the group’s beer business “remained the top dollar share gainer in the total US beer category with a 0.4 point increase”.
Nevertheless, pointing to “incremental macroeconomic headwinds affecting consumer demand”, Constellation Brands now sees its annual beer net sales falling 2-4% in its 2026 financial year, down from its previous forecast of flat to up 3%. The company’s 2026 financial year runs to the end of February.
As a consequence, amid lower volumes, “operational deleveraging” and “additional tariffs”, Constellation Brands has forecast a 7-9% drop in the operating profit from its beer division, compared to its previous projection of flat to up 2%.
Overall, Constellation Brands is forecasting a reported diluted net income per share of $10.77 to $11.07, versus $12.07 to $12.37 previously.
It is projecting a 4-6% decline in its “enterprise organic net sales”, against its previous forecast of at best 1% up and, at worst, down 2%.
Bernstein analyst Nadine Sarwat said: “Constellation’s guidance does not reflect a broken growth story per se. Its lost volumes are not going to competitors. Constellation continues to gain 40 basis points of market share year on year and has even seen some sequential improvement in Nielsen. Rather, this cut reflects an overall painful beer industry where volumes are declining at mid-single-digit percentage rate in 2025.” Shares in Constellation
