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3w ago

Constellation Brands Q1 Earnings and Sales Miss on Tariffs and Slower Demand

Management holds full-year EPS guidance despite tariff-driven cost increases alongside weaker demand from Hispanic consumers

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Bottles of Corona beer, the flagship brand of Grupo Modelo are displayed in this illustration taken in Monterrey, Mexico, February 18, 2025. REUTERS/Daniel Becerril/ File Photo
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Overview

  • Constellation reported first-quarter net sales of $2.52 billion, a 5.8% year-over-year decline that fell short of the $2.55 billion analysts expected.
  • The company posted adjusted EPS of $3.22 per share, below the $3.31 consensus, as rising aluminum and beer import tariffs squeezed profitability.
  • Beer shipment volumes declined 3.3% in the quarter and the segment’s operating margin contracted by 150 basis points to 39.1%.
  • Constellation attributed weaker beer sales to socioeconomic concerns and ICE enforcement fears among Hispanic consumers, who represent about half of its beer base.
  • Despite the disappointing quarter, management reiterated fiscal 2026 earnings guidance of $12.60 to $12.90 per share and expects organic net sales to range from a 2% decline to a 1% gain.