Constellation Brands Lowers Sales and Profit Forecast

Constellation Brands, the company behind popular beers like Modelo and Corona, announced on Tuesday that it has reduced its sales and profit expectations for the year, largely due to a drop in demand among Hispanic consumers.

According to Bill Newlands, president and CEO, high-end beer purchases in the U.S. have been steadily declining in recent months. He noted that consumers are both traveling less to buy beer and spending less money on each trip.

This decline seems to hit Hispanic consumers the hardest, as they represent roughly half of Constellation’s market. In a recent call with investors, Newlands emphasized this point.

Since 2013, Constellation has had the rights to sell these brands in the U.S. as part of a legal agreement following AB InBev’s acquisition of Grupo Modelo in Mexico. Additionally, the company offers a range of wines and spirits, including Robert Mondavi wines and Casa Noble Tequila.

Back in April, Constellation had already indicated that Hispanic consumers were feeling financial pressure. Surveys revealed that a significant portion of this demographic was worried about rising costs in everyday life and immigration issues, with many also expressing concerns regarding the job market.

Newlands remarked, “This kind of situation leads consumers to cut back spending in various areas. Beer is not immune to this trend, especially since social gatherings—where many Hispanic consumers often enjoy beer—are declining amid these broader concerns.”

As for the future, Constellation Brands expects its net beer sales to decline between 2% and 4% for fiscal year 2026, a revision from earlier forecasts suggesting only a 3% increase. The company’s fiscal year concludes on February 28th.

Furthermore, the anticipated adjusted earnings per share will now be estimated at $11.30 to $11.60, down from previous expectations of $12.60 to $12.90. The news prompted a more than 7% drop in Constellation’s stock during trading on Tuesday afternoon.