Constellation Brands (NYSE: STZ) reported second-quarter fiscal 2027 Constellation Brands earnings that beat analyst forecasts on Wednesday, posting net income of $565.8m against $466.0m a year earlier.
Net sales rose to $2.633bn, up from $2.481bn in the same period last year, according to the company’s 10-Q filing with the SEC.
Constellation Brands earnings top consensus on beer and wine growth
The maker of Corona and Modelo beat Wall Street’s revenue expectations, which had stood at $2.54bn, and adjusted earnings per share of $3.74 came in ahead of estimates clustered around $3.55 to $3.61, according to Quartz. LSEG consensus for the full fiscal year had put EPS at $11.71 and revenue at $9.09bn ahead of the print, according to data cited by Rallies.ai.
Pacifico ranked as the number-two dollar-share gainer across the beer category and has become a top-10 US beer brand by dollar sales, the company said in its earnings release. Victoria ranked tenth.
Two guidance lines move in different directions
Constellation reaffirmed its comparable, non-GAAP full-year EPS guidance of $11.20 to $11.90. Separately, it raised GAAP reported EPS guidance to a range of $11.85 to $12.55, up from $11.50 to $12.20, per the same exhibit filed with the SEC.
The two figures measure different things and both moved, just not in the same direction. Headlines describing the update as a guidance “lift” and others calling it a “reaffirmation” are each accurate, depending on which line they cite.
The Wine & Spirits division, often the drag on group margins, swung to a 3.8% operating margin from minus 14.6% a year earlier, helped by tariff recoveries and restructuring work, according to a transcript published by The Motley Fool.
SpikedAde deal adds a spirit-based RTD brand
Constellation disclosed it had acquired SpikedAde, a spirit-based ready-to-drink brand, for $75m upfront plus up to $278m in contingent consideration payable over five years. The company said the deal would not affect its fiscal 2027 outlook, according to the 8-K exhibit filed with the transaction details.
Management expects SpikedAde to approach roughly 2 million cases in calendar 2026, according to a transcript carried by AOL/The Motley Fool. The acquisition extends Constellation’s push into flavoured spirit-based drinks, a category it has targeted alongside its core beer portfolio of Corona, Modelo and Pacifico.
The company also declared a quarterly dividend of $1.03 per Class A share and said it had repurchased $530m of stock year-to-date through September, per the same filing.
Shares slip despite the beat
STZ closed at $117.60, down 0.18% on the day of the results but down 4.4% over the preceding 20 trading sessions, closer to its 20-day low of $108.34 than its 20-day high of $123.50, according to consolidated exchange data. Trading volume ran 1.82 times the 20-day average.
The stock’s recent drift lower came even as a note from Bank of America trimmed its price target on the shares, citing what it called an unproven turnaround in the beer segment, according to Stocktwits. The caution sits alongside a quarter in which net income and revenue both rose from a year earlier, underlining the gap between the headline numbers and some analysts’ read on durability.
The earnings landed against a backdrop of a 10-year Treasury yield at 5.27%, down slightly from 5.31% the previous session, according to data from the Federal Reserve Bank of St. Louis. Consumer staples names such as Constellation are often judged against that rate backdrop, given the sector’s dividend-heavy appeal to income investors.
Distributor inventories remain below historical averages even after a rebuild to healthier levels, the company said on its earnings call, positioning it to push further volume into stores over coming quarters. Investors will next look to see whether the comparable EPS range it reaffirmed, rather than the GAAP figure it raised, proves the more reliable guide to the rest of the fiscal year.
This article is for information only and is not investment advice or a recommendation to buy or sell any asset. Markets move quickly; figures are correct as sourced at the time of writing. Always do your own research before making financial decisions.
