USA: Constellation Brands cuts outlook on weak beer demand
Constellation Brands cut its fiscal-year outlook as widespread consumer weakness, including among its core Hispanic demographic, continued to weigh on demand, MSN reported on September 2.
The Rochester, N.Y.-based importer of Modelo and Corona beers said on September 2 that a challenging macroeconomic backdrop is leading shoppers to cut back on high-end beer as they make fewer trips and tighten their spending.
Chief Executive Bill Newlands said these trends are particularly evident among Hispanic consumers, a group that executives earlier this year noted was pulling back amid fears of immigration crackdowns.
Shares tumbled 8% to $149 in premarket trading. Through the close on Friday, August 29, the stock has lost about a third of its value over the past year.
Constellation—which also makes Kim Crawford wine and Casa Noble tequila—now expects organic net sales to fall 6% to 4% in its fiscal 2026. That compares with a prior outlook that called for sales in the range of down 2% to up 1%.
Beer sales are now projected to fall 4% to 2%, compared with a prior view of flat to up 3%. The company maintained its outlook for wine and spirit sales to tumble 20% to 17%.
The new outlook comes after Constellation in July logged lower profit and sales in its fiscal first quarter and warned that it would need to see sequential sales improvements in order to meet its guidance. Earlier this year, the company sold some of its lower-priced wine brands and began an organizational restructuring, aiming to cut more than $200 million in costs by 2028.
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