Constellation Brands disclosed on Tuesday its quarterly earnings and revenue figures, which fell short of analysts’ predictions due to tariffs on aluminum impacting its profit margins.
Despite the disappointing results, the brewer maintained its forecast for fiscal year 2026, expressing confidence in its ability to achieve financial objectives even in light of higher tariffs and weaker quarterly metrics.
Following the announcement, the company’s shares declined by less than 1% during after-hours trading. This year, the stock has experienced a drop of over 20%, largely driven by apprehensions regarding the impact of increased tariffs under former President Donald Trump on beer demand.
In comparison to Wall Street estimates gleaned from an LSEG survey, Constellation’s reported figures were as follows:
- Earnings per share: $3.22 adjusted vs. an expected $3.31
- Revenue: $2.52 billion vs. an expected $2.55 billion
The financial report, which covers the period ending May 31, highlights the initiation of Trump’s tariffs on imported canned beer in early April, along with substantial increases in aluminum duties set at 25% in mid-March and 50% in early June.
Aluminum and imported beer are vital to Constellation’s beer segment, which generates approximately 80% of the company’s total revenue. The company’s portfolio is primarily comprised of Mexican beer brands, including Corona, Pacifico, and Modelo Especial—recently dethroning Bud Light as the leading beer brand in the U.S. market.
Constellation reported a fiscal first-quarter net income of $516.1 million, equating to $2.90 per share, a decrease from $877 million or $4.78 per share in the prior year. Additionally, the company’s operating margin fell by 150 basis points during the quarter, partially attributable to rising aluminum costs.
When adjusted for specific items, the brewer’s earnings stood at $3.22 per share.
Net sales suffered a 5.8% drop to $2.52 billion, driven by weakened beer demand and the divestiture of Svedka vodka.
According to CEO Bill Newlands, softer consumer demand continues to challenge the company. He noted that this decline is influenced by “non-structural socioeconomic factors.” Shipment volumes for the beer segment saw a 3.3% decline, primarily due to reduced consumer interest.
Newlands highlighted in the previous quarter that concerns regarding Trump’s immigration policies have led to decreased beer purchases among Hispanic consumers, who account for nearly half of Constellation’s beer sales.
Further insights into the quarter’s performance are expected to be discussed by Constellation executives during a conference call scheduled for Wednesday at 10:30 a.m. ET.
Looking ahead to fiscal 2026, Constellation anticipates comparable earnings per share to be within the range of $12.60 to $12.90, while organic net sales are projected to fluctuate between a decline of 2% and an increase of 1%.
