Constellation Brands beats forecasts as beer stabilises
The US drinks group has delivered an unexpectedly strong third quarter, offering rare optimism in a challenging market. Better-than-forecast profits helped lift shares despite ongoing pressure on sales.
Despite the pervading gloom surrounding beverage alcohol in the United States, Constellation Brands has provided some cheer to begin 2026 with third quarter results that easily exceeded expectations.
After losing 37% of their value in 2025, the shares jumped by 3% and analysts suggested that they would continue to recover, albeit slowly, as the year progresses.
Sales fall less than feared
In the three months to the end of November, Constellation’s net sales fell 10% to US$2.22 billion; commentators had predicted a 12.4% drop to US$2.16 billion.
The quarterly adjusted profit was US$3.06 per share, easily beating estimates of US$2.63 per share.
Beer performance shows signs of improvement
Beer sales fell by 1% during the third quarter, but that represented an improvement from a 7% drop in the summer quarter.
Demand for the Mexican beers Modelo Especial and Corona fell largely due to President Trump’s 50% tariffs on aluminium; 41% of Constellation’s Mexican beer packaging comprises aluminium. Trump’s drive to prevent immigration also affected demand among the Hispanic population.
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There was a noted upturn in the fortunes of commodity beer brands such as Pacifico, Victoria, Corona Sunbrew and Corona Familiar, reflecting household budgets under pressure.
Wine and spirits decline driven by disposals
Net sales of wines and spirits fell by 51% on the back of shipments being 70% lower than in the same quarter in 2024.
But those bald figures were largely due to Constellation’s sale of much of its wines portfolio and the disposal of Svedka vodka in a drive to concentrate on higher margin lines.
Management highlights market share gains
Chief executive Bill Newlands said: “Our beer business delivered dollar and volume share gains in tracked channels.” Wines and spirits, he said, “continued to outperform the US industry”.
The company forecast annual earnings per share to be between $9.72 and $10.02, compared with its prior expectation of $9.86 to $10.16.
It reaffirmed its forecast of an organic net sales decline of between 4% and 6% for the year to the end of February, with a drop of between 2% and 4% in beer sales and a steeper decline of up to 20% for wine and spirits.
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