Corona brewer says shoppers are going for cheaper beer and wine, as it grows more cautious on demand

By Bill Peters

Constellation Brands pulled its longer-term outlook, after executives last year said concerns about ICE raids and higher prices were keeping Hispanic consumers from going out

Constellation Brands reported fourth-quarter results on Wednesday.

Shares of Constellation Brands were down after hours Wednesday after the beer and wine producer said it pulled a longer-term forecast, citing an "evolving socioeconomic backdrop and limited near-term visibility" as consumers seek out cheaper options.

That outlook came after executives at the company - best known for selling Corona and Modelo in the U.S. - said last year that concerns about higher prices and ICE raids kept its large numbers of Hispanic consumers from gathering. Beer demand has also taken a hit due to a weaker construction market, executives have said.

Shares of Constellation (STZ) slipped 0.8% after hours on Wednesday. The company will hold its earnings call on Thursday.

The move lower for the stock came amid a broader market rally following the announcement of a two-week cease-fire deal between the U.S. and Iran. The war in Iran has driven gas prices higher, threatening to further squeeze consumers dealing with years of price increases for essentials.

In prepared remarks on Wednesday, Constellation executives said lower-income consumers continued to struggle, and that demand for beer and wine had been muted over recent months.

"As a result, spending behavior across beverage alcohol categories became more deliberate, with consumers increasingly seeking value and exhibiting greater selectivity in their purchases," they said - adding that people continued to consume alcohol nonetheless.

Constellation said it was withdrawing its outlook for its fiscal 2028, initially provided last year. For its fiscal 2027, which runs through February, management said it expects organic sales for the company to be anywhere from down 1% to up 1%. Constellation said it expects adjusted earnings per share of $11.20 to $11.90 over that period.

For its fourth quarter, Constellation reported sales of $1.92 billion, an 11% year-over-year drop but better than FactSet forecasts for $1.88 billion. However, beer sales rose more than 1%.

The company reported adjusted earnings per share of $1.90, down from $2.63 in the year-prior quarter but also topping estimates for $1.71 for its fourth quarter, which ended on Feb. 28.

Constellation's results came as board member Nicholas Fink prepares to succeed Bill Newlands as its next CEO on April 13. Some said the move signaled little change in strategy.

Shares of Constellation are down 18% over the past 12 months, but up 8.9% so far this year. By comparison, the S&P 500 SPX is up 24.3% over the past 12 months.

-Bill Peters

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04-08-26 1659ET