Constellation Brands Inc - Class A
Q3 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +0.38%.
Did STZ Beat Earnings? Q3 2026 Results
Constellation Brands delivered a stronger-than-expected Q3 FY2026, posting comparable EPS of $3.06 against a consensus estimate of $2.63, a beat of 16.21%, even as the company navigated a year-over-year revenue decline of 9.8% to $2.22 billion, which itself edged past the $2.16 billion estimate by 3.04%. The headline revenue drop was heavily distorted by divestitures, including the SVEDKA sale and recent wine asset disposals, which caused the Wine and Spirits segment to crater 51% to $213.10 million; on an organic basis, the enterprise decline was a far more modest 2%. The Beer Business, still the company's core engine, held relatively steady at $2.01 billion in net sales, with margin expanding 10 basis points to 38.0% despite aluminum tariff headwinds, while Pacifico and Victoria posted depletion growth exceeding 15% and 13%, respectively, helping offset softness in Modelo Especial and Corona Extra. Looking ahead, Constellation affirmed comparable EPS guidance of $11.30 to $11.60 for the full fiscal year, with free cash flow targeted at $1.30 billion to $1.40 billion.
- Beer Business gained dollar and volume share in U.S. tracked channels despite challenging operating environment
- Favorable pricing partially offset beer shipment volume declines of 2.2%
- Pacifico and Victoria delivered strong growth of over 15% and 13% respectively in depletions
- SVEDKA Divestiture and 2025 Wine Divestitures drove significant Wine and Spirits revenue decline
- Lower depreciation contributed positively to Beer operating margins
- Aluminum tariffs and unfavorable fixed cost absorption pressured Beer COGS
- Interest expense declined from $104.4 million to $83.2 million year-over-year
“The operating environment during the third quarter of fiscal 2026 remained challenged, which was in line with our expectations and relatively consistent with the prior quarter. Our Beer Business delivered dollar and volume share gains in tracked channels and gained incremental distribution points, while our Wine and Spirit Business continued to outperform the U.S. wine industry. By focusing on factors within our control, we are confident that we are positioning the company for long-term success.”
Constellation Brands CEO, on the earnings call
Forward Guidance & Outlook
Constellation Brands updated its fiscal 2026 reported EPS outlook to $9.72-$10.02 and affirmed comparable EPS guidance of $11.30-$11.60. The company expects enterprise organic net sales decline of 4%-6%, with Beer net sales declining 2%-4% and Wine and Spirits organic net sales declining 17%-20%. Beer operating income is expected to decline 7%-9%, while Wine and Spirits organic operating income is projected to decline 97%-100%. Operating cash flow is targeted at $2.5-$2.6 billion, capital expenditures at approximately $1.2 billion (including approximately $1.0 billion for Mexico beer operations), and free cash flow at $1.3-$1.4 billion. Interest expense is expected to be approximately $370 million, with an effective comparable tax rate of approximately 19% and weighted average diluted shares of approximately 176 million. Corporate expense is expected to be approximately $225 million.
STZ YoY Financials
STZ Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.