Constellation Brands Stock Tumbles After Cutting Outlook
Maker of Modelo and Corona cites weakening beer demand and slowing consumer spending for its reduced fiscal 2026 forecast.
Shares of Constellation Brands (STZ) plunged more than 7% after the beverage giant significantly cut its financial outlook for fiscal 2026, signaling trouble ahead for its high-end beer portfolio. The company, which produces popular brands like Modelo Especial and Corona, pointed to a challenging macroeconomic environment and a slowdown in consumer demand as primary drivers for the revision.
The company announced that it , a sharp decrease from its previous forecast of $12.60 to $12.90. Furthermore, Constellation projects its beer segment's operating income will decline by 7% to 9%, a stark reversal from prior expectations of modest growth. This adjustment reflects what CEO Bill Newlands described as "volatile consumer purchasing behaviors" that have emerged in recent months.
A key factor behind the lowered guidance is a notable deceleration in the purchasing rates of high-end beer, particularly among Hispanic consumers—a crucial demographic for the company's Mexican beer brands. According to the company, this group showed a more pronounced decline in both trip frequency and spending per trip compared to the general market. This trend has led to an outsized impact on Constellation's Beer Business relative to the broader category.
Despite the headwinds, the company noted it is still gaining market share. The Beer Business grew its volume share in 49 of 50 states and remains a top dollar share gainer in the U.S. beer category. However, the immediate market reaction was severe, with following the news. While some analysts see the current stock price as a potential long-term opportunity, suggesting it is , the revised forecast has clearly shaken investor confidence for the near term as the company navigates weakening consumer spending.