Constellation Brands' Quarterly Sales Dip Less Than Expected on Steady Beer Demand

Reuters
2025/10/07

Oct 6 (Reuters) - Constellation Brands posted a smaller-than-expected drop in second-quarter sales on Monday, aided by steady demand for beer, even as the company's key Hispanic consumers reel from the Trump administration's immigration policies.

Spirit makers in the U.S., such as Constellation, Molson Coors and Brown-Forman, have grappled with persistently weak demand for alcoholic beverages, while doubling of tariffs on aluminum cans to 50% is expected to further erode their margins.

The brewer reaffirmed its full-year sales and profit outlook, having sharply cut it last month as economic pressures and immigration concerns prompt Latino consumers in the U.S.— a key group for its Corona and Modelo brands — to scale back spending on dining out and social gatherings.

Shares of the company, which have lost 37% of their value this year, were up about 4% in extended trading.

U.S. President Donald Trump has stepped up immigration raids, particularly in parts of the country with larger Latino populations, which have prompted panic in immigrant communities as well as protests.

CEO Bill Newlands said the company was navigating a "challenging socioeconomic environment that has dampened consumer demand," but its beer business outperformed the industry.

Constellation Brands' beer division, which accounts for the majority of its total revenue, saw a 2.7% fall in quarterly depletion volume — the rate at which products are sold — while shipments dropped 8.7%.

Its net sales fell 15% to $2.48 billion in the quarter ended August 31, but edged past analysts' estimates of $2.46 billion, according to data compiled by LSEG.

It logged quarterly profit of $3.63 per share, above estimates of $3.38 per share.

The company expects organic sales to decline in the range of 4% to 6% in fiscal 2026. Comparable earnings per share is projected between $11.30 and $11.60.

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