Beer sales have dropped off. Modelo and Corona parent's stock dives to a 5-year low.

By Tomi Kilgore

Constellation Brands issues a profit and sales warning, as beer buy rates have decelerated in the last several months

Shares of Constellation Brands, parent of Corona and Modelo beer, sank to a five-year low after a profit and sales warning.

Shares of Constellation Brands Inc. were dropping in early Tuesday trading toward the lowest levels seen since the height of the COVID-19 pandemic, as the beer maker issued a profit and sales warning, citing a sudden drop in sales.

While beer sales have been weak for a while, particularly among the company's large Hispanic consumer base, the lowered full-year outlook comes as purchase rates of high-end beer have decelerated since guidance was last provided in early July.

The parent of brands including Modelo and Corona beer, as well as Kim Crawford and Ruffino wines (STZ), said people are making fewer trips to buy beer and spending less when they do.

"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," said Chief Executive Bill Newlands.

Constellation has said in the past that Hispanic consumers account for roughly half of its overall beer business.

Read: Amid higher prices and immigration crackdown, Corona brewer Constellation tries to chart path back to 'normal.'

The stock sank 6.8% in afternoon trading, putting it on track for the lowest close since April 7, 2020.

For the current fiscal quarter, its second, the company said softer consumer trends will lead to inventory rebalancing by its distributors earlier than is typical for its beer business, leading to weaker sales.

For fiscal 2026, the company now expects adjusted earnings per share, which excludes nonrecurring items, of $11.30 to $11.60, down from previous guidance of $12.60 to $12.90. The average analyst estimate compiled by FactSet is for EPS of $12.64.

The growth outlook range for organic net sales was cut to a decline of 6% to 4% from a decline of 2% to growth of 1%. That includes a reduction in beer sales growth guidance to a decline of 4% to 2% from flat to up 3%.

Kudos to BofA Securities analyst Peter Galbo who warned investors last week to sell the stock, citing the belief that beer consumption remained soft and signs that depletions, or sales of the Constellation's distributors' retail customers, would be worse than the company was projecting.

Galbo downgraded the stock on Aug. 26 to underperform from neutral, to make him the only analyst, of the 25 surveyed by FactSet, who is bearish on the stock.

On the bright side, the company said it increased market share by volume in 49 of 50 states, which suggests it is outperforming other brewers in a tough environment.

The stock has tumbled 231.7% in 2025, while the S&P 500 index SPX has gained 8.7%.

From the archives (June 2023): Bud Light dethroned as top-selling beer by Modelo, as boycott cuts into sales

-Tomi Kilgore

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09-02-25 1340ET