Company Reports

Constellation Brands benefits from a Wide Morningstar Economic Moat Rating due to the strong brand equity and tight distributor relations enjoyed by its top-selling imported Mexican beer portfolio.

Constellation Brands' first-quarter organic sales increased 3% to $2.4 billion, with 2% organic growth in beer and 8% in wine and spirits. Comparable operating margin expanded 120 basis points to 34.3%, driven by a mix shift toward higher-margin beer following last year's wine divestitures.

Constellation Brands benefits from a Wide Morningstar Economic Moat Rating due to the strong brand equity and tight distributor relations enjoyed by its top-selling imported Mexican beer portfolio.

Constellation Brands' fiscal 2026 sales dropped 10% on an organic basis, with beer down 3% and wine and spirits down 14% amid headwinds in alcohol consumption. Operating deleverage caused the comparable operating margin to contract 180 basis points to 32.2%.

Constellation Brands' fourth-quarter sales dropped 11% (including divestitures in wine and spirits). Beer revenue declined 1% and its operating margin fell 340 basis points to 33.2%. Wine and spirits' organic revenue declined 6% and its operating margin plunged 21.7 percentage points to 1.3%.

Constellation Brands benefits from a Wide Morningstar Economic Moat Rating due to the strong brand equity and tight distributor relations enjoyed by its top-selling imported Mexican beer portfolio.

On Feb. 12, Constellation Brands' board appointed Nick Fink, director since 2021, as the new chief executive officer, effective in April. Fink will succeed Bill Newlands, who will step down from the CEO position after seven years and retire from the board.

Constellation Brands benefits from a Morningstar Economic Moat Rating of wide due to the strong brand equity and tight distributor relations enjoyed by the brewer’s top-selling, imported Mexican beer portfolio.

Constellation Brands' third-quarter sales fell 10%, led by divestitures in wine and spirits. A beer revenue decline of 1% moderated from a 5% fall in the first half. Adjusted operating profits were flat, but EPS fell 6%.

Constellation Brands benefits from a Morningstar Economic Moat Rating of wide due to the strong brand equity and tight distributor relations enjoyed by the brewer’s top-selling Mexican beer portfolio.

Constellation Brands' sales fell 15% in the second quarter of fiscal 2026, led by beer volume contraction and wine and spirits divestitures. Adjusted operating profits and earnings per share fell 13% and 16%, respectively.

Constellation Brands benefits from a wide economic moat on the basis of the strong brand equity and tight distributor relations that the company’s top-selling Mexican beer portfolio enjoys.

On Sept. 2, Constellation Brands lowered its 2026 outlook, cutting its organic sales guidance to declines of 4%-6%, from decline of 2% to growth of 1% previously, and its outlook for adjusted EPS to $11.30-$11.60 from $12.60-$12.90. Shares fell 7% on the news.

Constellation Brands benefits from a wide economic moat on the basis of the strong brand equity and tight distributor relations that the company’s top-selling Mexican beer portfolio enjoys.

Constellation posted a 4% decline in organic sales in the first quarter of fiscal 2026, with sales in beer and in wine and spirits down 2% and 21%, respectively. Adjusted operating profits fell 11% as margins contracted 250 basis points to 32.2%.

We award a wide moat rating to Constellation Brands on the basis of the strong brand equity and tight distributor relations that the company’s top-selling Mexican beer portfolio enjoys, as well as some scale-based cost advantages in procurement and advertising.

Constellation Brands posted 2% sales growth for fiscal 2025 while adjusted earnings per share rose 11% on efficiency gains in the beer segment. For the next three years, it expects low- to mid-single-digit sales growth, below its prior midterm target of 6%-8%.

We are maintaining our fair value estimates for the beverage firms we cover following the US tariff announcements April 2. While tariffs for an extended period will pressure sales and margins, we think it’s possible that they could be rescinded as they tend to be used as a negotiating tactic. We see investment opportunities in Brown-Forman and Constellation Brands, which trade at respective 36% and 34% discounts to our $52 and $274 fair value estimates.

We award a wide moat rating to Constellation Brands on the basis of the strong brand equity and tight distributor relations that the company’s top-selling Mexican beer portfolio enjoys, as well as some scale-based cost advantages in procurement and advertising.

Shares of wide-moat Constellation Brands plunged over 17% after its weaker-than-expected fiscal third-quarter results, driven by frugal consumers scaling back alcoholic beverage spending. As a result, revenue remained flat at $2.5 billion, buoyed by a slowing 3% increase in beer sales (82% of sales). Challenges in the wine and spirits portfolio persisted, with sales dipping 14% during the quarter. Meanwhile, adjusted earnings per share remained unchanged from the prior year as cost efficiencies offset rising marketing investments. Ultimately, management lowered its full-year outlook for net sales growth to 2%-5% from 4%-6% and for adjusted EPS to $13.40-$13.80 from $13.60-$13.80. After nudging down our 6% and $13.76 respective estimates, we plan on reducing our $291 fair value estimate by a mid-single-digit percentage, leaving shares undervalued. We think our 10-year forecasts for 6% sales growth and 32% operating margin remain within reach, thus the moderate fair value change relative to share price movement. We remain constructive on the firm’s long-term outlook, given the strong brand equity of its Mexican beers and premiumization tailwinds.