Constellation Brands Inc. reported fiscal third‑quarter 2026 results that surpassed consensus expectations, delivering net sales of $2.22 billion—a 10% decline year‑over‑year but a 2% drop in comparable sales. Comparable earnings per share rose to $3.06, beating the $2.65 consensus by $0.41, while reported EPS of $2.88 also exceeded the $2.63–$2.67 range cited by analysts.
The company’s beer portfolio remained the primary driver of the earnings beat. Modelo Especial and Corona maintained market share and lifted prices by 1% to 2%, offsetting volume softness. Pacifico and Victoria added more than 15% and 13% in growth, respectively, contributing to a 38.0% operating margin that improved by 10 basis points year‑over‑year. These gains were achieved through disciplined cost control and a favorable mix of high‑margin premium brands.
In contrast, the wine and spirits business suffered a 65% drop in operating income to $33.7 million, reflecting the impact of earlier divestitures and a weaker premium‑wine market. Net sales in the segment fell 51% and shipment volumes declined 70.6%, underscoring the strategic shift away from legacy products and the challenges of a price‑sensitive market.
Management reaffirmed its fiscal 2026 guidance, maintaining an adjusted EPS range of $11.30 to $11.60 and projecting operating cash flow of $2.5 billion to $2.6 billion. The company also highlighted ongoing capital deployment, noting $604 million of share repurchases in the first half of fiscal 2026 and a $4 billion share‑repurchase authorization through 2028.
Bill Newlands, President and CEO, said the quarter was “challenging but in line with expectations,” noting that the beer business delivered “dollar and volume share gains in tracked channels” while the wine and spirits segment “continued to outperform the U.S. wine industry.” Garth Hankinson, CFO, emphasized that “cost savings and efficiency initiatives continue to deliver incremental benefits,” supporting the company’s confidence in maintaining profitability amid headwinds such as aluminum tariffs.
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