Constellation Brands (STZ) Tops Fourth-Quarter Profit Forecasts, Issues Cautious Outlook

TLDR

• Constellation outperformed Q4 earnings projections ($1.90 vs $1.71 expected) but its FY27 guidance landed below Wall Street forecasts
• Full-year FY27 EPS guidance of $11.20–$11.90 fell short of analyst estimates of $12.44
• Beer sales grew 1% in Q4; wine and spirits sales plummeted 58% to $194.2 million
• The company is targeting over $200 million in annual cost reductions by fiscal 2028
• Incoming CEO Nicholas Fink will assume the role on April 13, replacing retiring Bill Newlands

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(SeaPRwire) –   Constellation Brands exceeded fourth-quarter earnings expectations, but investors quickly shifted their focus to a disappointing fiscal 2027 outlook, pulling the company’s stock lower.

$STZ – Constellation Brands Inc
Q4 2026

Revenue: $1.92B Vs. $1.89B est.
Adj. EPS: $1.9 Vs. $1.72 est.

Beer posted modest revenue growth (+1%) while Wine & Spirits dropped sharply (-58%), significantly hitting profitability even with a strong rebound in operating income. pic.twitter.com/a4qTQtMIWT

— EarningsTime (@Earnings_Time) April 8, 2026

For the Q4 period ending Feb. 28, the company reported EPS of $1.90 compared to the $1.71 forecast by analysts. Net sales reached $1.92 billion, an 11% drop year-over-year but still above the $1.84 billion consensus estimate.

The earnings beat was not enough to offset the guidance miss. Constellation projected FY27 EPS between $11.20–$11.90, which is well below the Wall Street estimate of $12.44. The company also withdrew its FY2028 projections entirely, citing an uncertain macroeconomic environment.

Constellation Brands, Inc., STZ

Q4 beer sales hit $1.73 billion, a small 1% increase. Shipment volumes rose 1.1%, supported by favorable pricing, though this gain was partially offset by an unfavorable product mix.

Wine and spirits tell a very different story. Sales in that segment fell 58% to $194.2 million, driven by a 72.9% drop in shipment volumes. The company named brand divestitures, changes to distributor contracts, and strategic pricing decisions as the core causes.

For full-year fiscal 2026, Constellation reported EPS of $11.82 on net sales of $9.14 billion, down 10% from the prior year but above the company’s own guidance range of $11.30–$11.60.

Pressures Across the Business

Demand for beer, wine, and spirits has stayed muted for several years. Economic uncertainty has kept consumers from visiting bars and restaurants, while a broader shift toward healthier habits has also dragged on alcohol sales across the industry.

Constellation has faced specific pressure from weaker spending among Hispanic consumers, who make up roughly half of its beer customer base. Shifting immigration policies weighed on sentiment for this group during fiscal 2026.

In the first three quarters of fiscal 2026, beer sales fell 4% year-over-year. Organic wine and spirits sales, after removing the impact of divestitures, dropped 16% over the same period.

Bank of America reiterated an Underperform rating on STZ, noting it expects a negative reaction for the stock. Morgan Stanley’s Dara Mohsenian described the guidance as “seemingly conservative”, adding the stock would likely give up some of its recent relative outperformance.

Cost Cuts and Leadership Change

Constellation has been expanding into faster-growing categories, including hard seltzers and non-alcoholic drinks. It also launched an organizational review last year, targeting annual cost cuts of more than $200 million by fiscal 2028.

On the leadership front, Nicholas Fink — a board member since 2021 — officially takes over as President and CEO on April 13. Bill Newlands, who has held the role since 2019, will retire but stay on as a strategic advisor during the transition period.

Some analysts see room for optimism heading into the summer. Roth Capital Partners noted that Constellation’s brands have been selling faster at retail in recent weeks, and the World Cup could provide a boost for beer sales.

STZ has gained 8.9% year-to-date but remains down roughly 18% over the past 12 months.