What does Constellation Brands do and what are its main business segments?

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What is the revenue and EPS growth rate for Constellation Brands year over year?

What factors drove the changes in Constellation Brands's revenue and profit?

What is Constellation Brands's gross profit margin?

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What guidance did Constellation Brands's management provide for the next earnings period?

What is Constellation Brands's latest dividend and current dividend yield?

- **Consumer Sentiment Drives Volatility**: 80% of consumers express economic concern, impacting spending, but brand loyalty for Corona and Modelo remains strong. Corona Familiar and Sunbrew are key growth engines.
- **Marketing and Innovation Lead**: Aggressive marketing (e.g., MLB partnerships) and new products like Corona Sunbrew target younger consumers, driving share gains.
- **Cost Savings Offset Margin Headwinds**: $105M in cost savings offset 160bps margin drag from fixed costs and tariffs, maintaining 39-40% margin target.
- **Wine & Spirits Resilience**: Despite first-half challenges, the business is on track to beat the market, with second-half improvement expected.
- **Macroeconomic Risks**: Management cautious on sustained low volume growth but optimistic about cyclical recovery, with continued investment in long-term growth.

**【CEO Summary Section】**
- **Consumer Sentiment and Volume Challenges**: CEO Bill Newlands highlighted that 80% of surveyed Hispanic and non-Hispanic consumers expressed concern about the socioeconomic environment, leading to reduced spending. However, brand loyalty remains strong, with Corona and Modelo showing resilience. Corona Familiar and Sunbrew are key growth drivers, while Corona Extra faces headwinds but maintains a halo effect for the brand family.
- **Marketing and Innovation**: Increased marketing spend, including partnerships with Major League Baseball and College Football, aims to attract younger consumers. New products like Corona Sunbrew (mixing beer with orange juice) are gaining traction, becoming the #1 new brand in dollars.
- **Wine & Spirits Growth**: Despite first-half challenges, the business is on track to beat the market, driven by brands like Kim Crawford, Ruffino, and The Prisoner. Management expects second-half improvement due to seasonal volume and better inventory alignment.

**【CFO Financial Commentary】**
- **Cost Savings and Margin Management**: CFO Garth Hankinson reported $105 million in year-to-date cost savings, focusing on logistics, manufacturing, and supplier optimization. However, 160 basis points of margin headwinds (fixed costs, tariffs, marketing) are expected for the year. The company maintains a 39-40% operating margin target but acknowledges risks if volumes remain depressed.
- **CapEx and Long-Term Growth**: Despite cutting top-line guidance, CapEx remains unchanged for FY26 due to long-term investments. Future adjustments will depend on macroeconomic trends.
- **Tariff Impact**: Beer tariffs are expected to add $70 million in FY26, with wine tariffs at $20 million, tracking volume trends.

**【Q&A Highlights】**
- **Hispanic Consumer Dynamics**: Management attributes volume declines to macroeconomic factors rather than secular trends, emphasizing brand loyalty and targeted marketing. Repositioning Modelo Oro and Premier at lower price points aims to address affordability concerns.
- **Margin Sustainability**: While current margins are strong, sustained low single-digit volume growth could pressure margins. Management is cautious but optimistic about a cyclical recovery.
- **Wine & Spirits Inventory**: Healthy distributor inventory levels support second-half growth, with focus on top-line share gains rather than margin chasing.


Constellation Brands, Inc. (STZ) Q2 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

STZ

STZ fundamentals

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