Constellation Brands, Inc. (STZ)

Constellation Brands reported second-quarter fiscal 2027 net sales of $2,633 million, up 6 percent 1. Reported operating income fell 8 percent to $805 million, while comparable operating income, which leaves out items the company calls one-off, rose 1 percent to $897 million 1.

Beer, the main business, grew net sales 5 percent on a 5.5 percent rise in shipments to distributors, but depletions, the sales from distributors on to stores and bars, fell 0.6 percent 1. Modelo Especial slipped about 2 percent and Corona Extra about 5 percent, while Pacifico grew about 19 percent 1.

The smaller wine and spirits business grew net sales 17 percent and moved to an operating profit of $6.1 million from a loss of $19.8 million 1. The company credited tariff recoveries and savings from its restructuring 1.

After the quarter closed, the company bought SpikedAde, a vodka-based ready-to-drink brand, paying $75 million at close for all of it, with up to $278 million more over five years if the brand performs 4. It also raised the top of its reported full-year earnings outlook while keeping its comparable outlook 1.

Constellation is a Delaware company incorporated in 1972 as the successor to a business founded in 1945, based in Rochester, New York 3. It makes and sells beer, wine and spirits, with operations in the U.S., Mexico, New Zealand and Italy 3.

Its Mexican import brands, led by Modelo Especial and Corona Extra, sold to a growing U.S. audience, and the company holds a perpetual sub-license to sell them in the U.S. 3. Roughly half of beer sales come from Hispanic consumers, CNBC reported in April 2025 8.

Wine was the weak spot 3. Wine sales were falling in the U.S. wholesale market, so in fiscal 2025 the company wrote its wine and spirits goodwill down to zero, a $2,740.7 million charge 3. It took a further $57.0 million charge on wine trademarks 3.

It then shrank the wine business on purpose 3. It sold the SVEDKA vodka brand on January 6, 2025 for $409.2 million in cash 3. On June 2, 2025 it sold or licensed out its mainstream wine brands, wineries and vineyards for $845.9 million, which paid down debt 3.

Net sales for fiscal 2026 fell 10 percent to $9,139.0 million from $10,208.7 million, mainly because of those sales, and beer shipments also fell 3. Beer net sales were $8,315.2 million against $8,539.8 million 3.

A cost-cutting program is expected to save over $200 million a year by fiscal 2028, with $72.2 million of its costs booked in fiscal 2026 3. U.S. tariffs on aluminum hit results until April 2026, when beer made from malt was removed from them 3.

Reuters reported that Nicholas Fink would replace Bill Newlands as chief executive, as the company battled weak demand 7. Fink took over on April 13, 2026 3.

Beer

Beer is by far the larger segment, with $8,315.2 million of net sales in fiscal 2026 3. The company says it is the number one seller of imported beer in the U.S. and has the right to sell its brands in all 50 states 3.

The line-up is Modelo (Especial, Negra, Chelada), Corona (Extra, Familiar, Light, Premier, Non-Alcoholic), Pacifico and Victoria 3. In the latest quarter Pacifico became a top-10 brand by dollar sales in the company's tracked data, and Modelo Especial stayed the best seller by dollar sales 1.

Wine and spirits

The segment is now a higher-end portfolio: Kim Crawford, The Prisoner Wine Company, Robert Mondavi Winery, Mi CAMPO and the Casa Noble and High West spirits 3. Its net sales were $823.8 million in fiscal 2026, against $1,668.9 million a year earlier 3.

New drinks

In fiscal 2026 it launched Corona Sunbrew nationally and the seasonal Modelo Noche Especial, and in fiscal 2027 Modelo Chelada Suprema, an 8% ABV single-serve can 3. SpikedAde adds a ready-to-drink spirit brand 4.

Plants and land

Beer is brewed in two Mexican breweries, at Nava and Obregón, and a third at Veracruz is under construction 3. A glass plant next to the Nava brewery is run through a joint venture with Owens-Illinois and supplies about 60% of the glass bottles for the beer brands 3.

In wine, it runs nine wineries in the U.S., two in New Zealand and six in Italy, and owned or leased about 10,000 acres of vineyards at the end of fiscal 2026 3.

People

Nicholas Fink has been President and Chief Executive Officer since April 13, 2026, and Garth Hankinson is Executive Vice President and Chief Financial Officer 31.

Rivals

The 10-K names Anheuser-Busch InBev, The Boston Beer Company, Heineken, Mark Anthony and Molson Coors in beer 3. In wine and spirits it names Gallo, Treasury Wine Estates, Diageo, Pernod Ricard and Brown-Forman among others 3.

Current problems

A stockholder class action filed on February 18, 2025 in federal court in Western New York names the company, its former chief executive and its chief financial officer 2. It claims statements about the wine and spirits strategy were false or misleading 2.

Reuters reported that Hispanic consumers have pulled back on purchases amid the immigration crackdown and economic uncertainty 7.

The umbrella, in words

The brands are Modelo, Corona, Pacifico and Victoria in beer, and Kim Crawford, The Prisoner, Robert Mondavi, Casa Noble and High West in wine and spirits 3. CB International Finance is a wholly-owned subsidiary 3.

Ties: the company owns half of the glass plant at Nava through an equally owned joint venture with Owens-Illinois 3. It also holds an investment in Canopy Growth, a Canadian public company, which since April 2024 sits in non-voting Exchangeable Shares 3.

Control: the Sands Family Stockholders, meaning Richard Sands, Robert Sands, other family members and certain related entities, own Class A stock and hold Board nomination rights, the 10-K says 3.

For fiscal 2027, the company expects reported earnings per share of $11.85 to $12.55 and comparable earnings per share of $11.20 to $11.90 13. It also targets operating cash flow of $2.4 to $2.5 billion and free cash flow of $1.6 to $1.7 billion 1.

It expects organic net sales growth of negative 1 to positive 1 percent, beer operating margin of 37 to 38 percent and wine and spirits margin of 5 to 6 percent 1. Capital spending is about $800 million, almost all on brewery expansion 13.

The 10-Q says commercial production at the Veracruz brewery is now expected at the beginning of fiscal 2028 2. The restructuring program is meant to reach full savings by fiscal 2028 3.

The board declared a quarterly dividend of $1.03 per Class A share payable on November 13, 2026 1. As of September 30, 2026, $2,546.2 million remained under the share repurchase authorization 2.

On the debt side, a $300 million delayed draw term loan agreed on September 18, 2026 can be drawn until June 18, 2027 5. The company also gave notice to redeem all of its 4.350% senior notes due 2027 early 6.