Constellation Brands Inc. (STZ) Shareholders Suffer Further Losses, Down 32% Over Past Year.

Constellation Brands shareholders have incurred further losses as the stock declined 4.9% this week, taking one-year losses to 30%. The company's earnings per share dropped below zero, and while there was some significant insider buying, the focus should be on earnings and revenue growth trends. Despite a 30% drop in the last year, long-term shareholders have made a 1.2% gain per year over half a decade.

Constellation Brands (STZ) shareholders have faced further losses this week, with the stock declining by 4.9% and taking one-year losses to 30%. The company's earnings per share (EPS) dropped below zero, despite some significant insider buying. Long-term shareholders, however, have made a 1.2% gain per year over the past five years.

The recent decline follows a weak Q1 2026 earnings report, where the company reported a 10% year-over-year (YoY) drop in comparable EPS and a 5.5% decline in net sales [1]. Key factors contributing to this underperformance include soft consumer demand driven by socioeconomic headwinds and a 30.4% reduction in wine and spirits shipment volumes. The beer segment also underperformed, with a 2% sales decline and a 3.3% drop in shipment volumes, particularly in core brands like Modelo Especial and Corona Extra [1].

Operating margins contracted across both business segments. The beer division's margin fell 150 basis points to 39.1% due to higher tariffs, marketing costs, and fixed cost absorption issues. The wine and spirits segment posted an operating loss of $6 million, attributed to lower distributor payments and unfavorable contractual adjustments [1].

Despite these challenges, Constellation Brands maintained strong liquidity, with $73.9 million in cash and $637.2 million in operating cash flow for the quarter. The company also distributed $381 million in buybacks, reflecting disciplined capital allocation [1]. For FY26, management projects enterprise operating income growth of 742-760% on a reported basis, though comparable income is expected to decline 3-1% [1].

While the recent negative trend has led to a decline in stock price, investors should focus on earnings and revenue growth trends. The company's strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day delivered a 166.71% return from 2022 to the present, outperforming the benchmark return of 29.18% [1].

References:

[1] https://www.ainvest.com/news/constellation-brands-shares-plunge-2-58-380m-volume-surge-hit-393rd-daily-trading-activity-earnings-woes-weigh-2508/
[2] https://au.finance.yahoo.com/news/why-constellation-brands-stz-down-153002112.html