Constellation Brands Slashes FY26 Guidance, Shares Plummet 7% to New 5-Year Low

Constellation Brands' shares fell 7% to a 5-year low after slashing FY26 guidance, citing decreased consumer demand and unpredictable purchasing patterns. Beer sales have slowed, with reduced trip frequency and spending per trip, particularly among Hispanic consumers. The guidance cut reflects macroeconomic challenges and is affecting peers in the beer and spirits sector.

Constellation Brands, Inc. (STZ) reported a significant downgrade in its full-year 2026 financial outlook, sending shares tumbling 7% to a five-year low. The beverage alcohol company attributed the revised guidance to a challenging macroeconomic environment and decreased consumer demand [1].

The company now projects earnings per share in the range of $10.77 to $11.07, down from the previously expected $12.07 to $12.37. Comparable earnings are expected to decline to $11.30 to $11.60 per share, compared to the earlier forecast of $12.60 to $12.90. Net sales are projected to decline by 6% to 4%, down from the prior outlook of a 2% decline to a 1% growth [1].

Constellation Brands President and CEO Bill Newlands cited a challenging macroeconomic environment, noting that consumer demand has been dampened and purchasing behavior has become more volatile since the first quarter of fiscal 2026. The company also highlighted a decline in high-end beer purchases, particularly among Hispanic consumers [2].

The revised outlook reflects broader economic headwinds affecting consumer demand. According to Bump Williams, CEO of Bump Williams Consulting, factors such as health concerns, fewer social gatherings, and the rise of alternative beverages like cannabis and energy drinks have contributed to the decline in beer sales [3].

Constellation Brands' peers in the beer and spirits sector are also feeling the impact of these macroeconomic challenges. Legacy beer brands like Bud and Coors have seen significant declines in sales volume, while consumers are turning to healthier alternatives and spirits-based ready-to-drink beverages [3].

The company's shares fell more than 6% in morning trading following the announcement, underscoring the market's reaction to the downgraded outlook. Investors are closely watching Constellation Brands' ability to navigate the current economic climate and adapt to shifting consumer preferences.

References:
[1] https://www.nasdaq.com/articles/constellation-brands-slashes-fy26-outlook-stock-down-8
[2] https://apnews.com/article/constellation-brands-modelo-corona-beer-hispanic-6975e8c593048e45ccd3bf20135482f3
[3] https://www.aol.com/beer-demand-weakens-corona-modelo-201706137.html