Constellation Brands now expects fiscal 2026 comparable earnings per share (EPS) between $11.30 and $11.60, compared with the prior forecast of $12.60 to $12.90.
Constellation Brands’ (STZ) shares declined over 7% on Tuesday morning after the Corona beer maker cut its annual profit and sales forecasts on falling consumer demand for its products as shoppers turn more price-sensitive due to rising costs of goods.
The company now expects fiscal 2026 comparable earnings per share (EPS) to be between $11.30 and $11.60, compared with its prior forecast of $12.60 to $12.90. Constellation Brands has revised its forecast for organic net sales to now decline between 4% and 6%, compared with the previous expectation of a 1% rise to 2% fall.
“We continue to navigate a challenging macroeconomic environment that has dampened consumer demand and led to more volatile consumer purchasing behavior since our first quarter of fiscal 2026,” said CEO Executive Officer Bill Newlands.
Retail sentiment on Constellation Brands remained unchanged in the ‘bullish’ territory, with message volumes at ‘high’ levels, according to data from Stocktwits.
“Over the last several months, high-end beer buy rates decelerated sequentially, as both trip frequency and spend per trip declined. Notably, high-end beer buy rate declines for Hispanic consumers were more pronounced than general market declines, which has an outsized impact on our Beer Business compared to the broader beer category,” Newlands added.
Last week, Bank of America downgraded Constellation Brands to ‘Underperform’ from ‘Neutral’ with a price target of $150, down from $182, according to TheFly. The firm noted that beer industry consumption remains soft, creating risk to sales and margin.
“Looking at our second quarter, we expect inventory rebalancing at the distributor level to reflect softer consumer trends, and to occur earlier than is typical for our Beer Business,” CFO Garth Hankinson said.
Constellation Brands will report second-quarter results on October 1. Shares of the company have declined by 32% this year and by nearly 38% over the last 12 months.
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