Constellation Brands cuts fiscal 2026 outlook on consumer demand weakness

Constellation Brands Inc. (NYSE: STZ) lowered its fiscal 2026 financial outlook, citing challenging macroeconomic conditions affecting consumer demand and purchasing behavior.

The beverage alcohol company updated its reported earnings per share guidance to $10.77-$11.07, down from the prior range of $12.07-$12.37. Comparable EPS guidance was reduced to $11.30-$11.60 from $12.60-$12.90.

Enterprise organic net sales are now expected to decline 4% to 6%, compared to the previous forecast of a decline of 2% to growth of 1%. Beer net sales are projected to fall 2% to 4%, versus the prior outlook of flat to 3% growth.

The company's beer business has been particularly affected, with high-end beer buy rates decelerating as both trip frequency and spending per trip declined. Hispanic consumer buy rate declines were more pronounced than general market declines, which disproportionately impacts Constellation's beer segment compared to the broader beer category.

"We continue to navigate a challenging macroeconomic environment that has dampened consumer demand and led to more volatile consumer purchasing behavior," said CEO Bill Newlands in a statement based on the company's press release.

Despite the headwinds, Constellation reported growing volume share in 49 of 50 states through July 2025 and maintained its position as the top dollar share gainer in the total U.S. beer category with a 0.4 point increase in Circana channels.

The company also expects inventory rebalancing at the distributor level to occur earlier than typical for its beer business in the second quarter, with shipments trailing depletions by 6.0 to 7.0 points.

Operating cash flow guidance was reduced to $2.5-$2.6 billion from $2.7-$2.8 billion, while free cash flow is expected to be $1.3-$1.4 billion versus the prior range of $1.5-$1.6 billion.

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