Constellation Brands Shares Plunge 6.6% on 220.74% Volume Surge as Guidance Cuts Signal Struggles

Constellation Brands (STZ) fell 6.60% on Sept. 2, with a trading volume of $920 million, a 220.74% surge from the prior day’s volume. The decline followed the company’s updated fiscal 2026 guidance, which signaled weaker-than-expected performance amid macroeconomic headwinds.

The company revised its reported EPS guidance to $10.77–$11.07, down from $12.07–$12.37, and comparable EPS to $11.30–$11.60, reflecting a 10% reduction in expectations. Organic net sales are now projected to decline 6%–4%, with beer sales expected to fall 4%–2% due to lower volumes and tariff impacts. Operating income growth for the enterprise was adjusted to 666%–686%, but comparable operating income is set to decline 11%–9%.

Management cited a challenging economic climate dampening consumer demand, particularly among Hispanic consumers, who account for roughly half of its beer sales. High-end beer buy rates have slowed, with Hispanic consumer declines outpacing broader market trends. Despite these challenges, the company highlighted growth in beer volume share across 49 U.S. states and a 0.4-point increase in dollar share within the U.S. beer category.

Constellation also announced $604 million in share repurchases under its $4 billion three-year authorization and emphasized cost-saving initiatives to support brand investments. The firm expects inventory rebalancing at the distributor level to lag behind consumer trends in Q2, with shipments trailing depletions by 6–7 percentage points.

The updated guidance excludes the impact of the SVEDKA divestiture and 2025 wine divestitures, which previously contributed to sales and profit. The company will present its outlook at the 2025 Barclays Global Consumer Staples Conference, where financial metrics and strategic priorities will be detailed.

Free cash flow guidance was reduced to $1.3–$1.4 billion from $1.5–$1.6 billion, aligning with lower operating cash flow projections. The stock’s sharp drop underscores investor concerns over prolonged macroeconomic pressures and the company’s reliance on volatile consumer segments.