Constellation Shares Fall 8% Due to Lower Demand for Corona and Modelo in a Challenging Environment

Shares of Constellation Brands (NYSE: STZ) recently registered a drop of nearly 8% at the opening of Wall Street, after significantly cutting its profit forecasts for fiscal year 2026, amid an adverse macroeconomic context that affects consumption.

The alcoholic beverage company revised down its estimate of adjusted earnings per share, placing it between $11.30 and $11.60, compared to the previous forecast of $12.60-$12.90 and below analysts’ expectations, which pointed to $12.66. It also adjusted its organic net sales projections, which it now expects to fall between 4% and 6%, compared to the previous range of a 2% reduction to 1% growth.

The beer business, which includes brands such as Corona and Modelo, is the most affected. The company expects net sales of the segment to contract between 2% and 4%, when it previously estimated an advance of up to 3%. It also anticipates that the operating profit of the division will fall between 7% and 9%, compared to previous forecasts of growth of up to 2%.

Constellation attributed the cuts to the slowdown in demand for high-end beer, with steeper declines in frequency and spending per purchase among Hispanic consumers, a key group for the business. “We continue to navigate a challenging environment that has reduced demand and led to more volatile purchasing behavior”, said CEO Bill Newlands.

The firm also lowered its free cash flow forecast, which now stands at $1.3-1.4 billion compared to the previous range of $1.5-1.6 billion. However, it highlighted that through July it had gained market share in 49 of the 50 states and remained the leader in value growth within the total beer category in the United States.