Constellation Brands $STZ reported first-quarter fiscal 2027 results Tuesday showing net sales down 3.3% from a year earlier to $2.43 billion, as softening consumer demand weighed on the beverage company's top line. Adjusted earnings came in at $3.43 a share. That was ahead of analyst expectations of $3.19 a share, according to The Wall Street Journal.
The bulk of the revenue decline came from the wine and spirits segment, where sales dropped 47% to $149.2 million, reflecting the impact of brand divestitures the company made in 2025, the company said. Pricing gains and stronger shipment volumes pushed beer revenue up 2% to $2.28 billion. On the depletion side — a metric tracking how much distributors sell through to retailers — volumes slipped 0.3%, with weakness in Modelo Especial and Corona Extra only partly countered by gains in Pacifico, Victoria, and Modelo Chelada.
CEO Nicholas Fink said he sees room to expand the company's core brands and intends to pursue opportunities in categories adjacent to its existing product lines. "I see significant runway to continue growing our leading brands with an even greater emphasis on understanding consumer occasions and relevance—increasingly looking at our business through the lens of when, where, and why consumers are choosing our brands," he said in a statement.
What began as a solid quarter deteriorated as fuel costs tied to the war in Iran added fresh pressure on top of years of accumulated inflation, the company said. Consumers at lower income levels pulled back most sharply, trading down in search of value as the quarter wore on, according to The Journal.
Among the headwinds Constellation has navigated is a slowdown in purchases by Hispanic consumers — a group that accounts for about half of its beer buyers — whose spending has been held back by both cost-of-living strains and anxieties over immigration enforcement, according to Barron's. Even so, the sales gap in areas where Hispanic residents are more concentrated has been narrowing, the company said. Executives had flagged earlier in the year that purchases from that demographic appeared to be turning a corner, according to Barron's.
Full-year adjusted earnings guidance remained unchanged at $11.20 to $11.90 a share, while the reported earnings forecast was bumped higher to $11.50 to $12.20 a share from a previous range of $11.10 to $11.80. For the full year, management projected that beer revenue and organic wine and spirits revenue would each land somewhere between a 1% decline and a 1% gain. Constellation stock was up 3.9% in after-hours trading Tuesday.