Constellation Brands (NYSE: STZ) reported its fiscal year 2027 Q1 results on June 30, revealing revenues of $2.43 billion, surpassing expectations of $2.39 billion. However, adjusted earnings per share (EPS) of $3.43 fell short of the anticipated $3.70. Management raised the full-year EPS outlook to between $11.50 and $12.20, a 23% increase year-over-year at the midpoint.
Constellation’s beer segment, primarily driven by Modelo Especial and Corona Extra, saw net sales grow 2%, while the Wine and Spirits segment reported a 47% drop in net sales largely due to last year’s divestiture. Despite this, organic net sales rose by 8%. The company returned over $400 million to shareholders during the quarter through repurchases and dividends. As of July 8, STZ traded around $130, approximately 29% below the analysts’ consensus price target of $167.89.
This earnings report was the first under newly appointed CEO Nicholas Fink, who outlined a growth strategy focusing on understanding consumer brand preferences and opportunities, particularly for Modelo Especial and Mi CAMPO. Constellation aims to navigate changing consumer behaviors amidst economic pressures, suggesting that current challenges are more about consumer selectivity rather than an overall decline in alcohol consumption.
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