Constellation Brands Modelo shares fall after guidance cut

Constellation Brands on Tuesday slashed its full fiscal-year outlook, saying a “challenging” economy is hitting its alcohol sales.

The company, home to popular brands such as Modelo and Corona, had previously said in April that higher U.S. tariffs on beer would affect its sales and overall consumer demand. Constellation on Tuesday cut its comparable earnings per share outlook for its fiscal 2026 to a range of $11.30 to $11.60, down from $12.60 to $12.90.

The stock fell about 6% Tuesday morning, briefly hitting a 52-week low. Constellation is set to participate in the 2025 Barclays Global Consumer Staples Conference later on Tuesday.

“We continue to navigate a challenging macroeconomic environment that has dampened consumer demand and led to more volatile consumer purchasing behavior since our first quarter of fiscal 2026,” CEO Bill Newlands said in a statement. “Over the last several months, high-end beer buy rates decelerated sequentially, as both trip frequency and spend per trip declined.”

Constellation anticipates organic net sales will fall 4% to 6%, down from a previous expectation of 1% growth to a 2% decline. That metric excludes the Svedka vodka brand and wine brands the company sold.

The company expects net beer sales will fall 2% to 4% due to lower volumes and additional tariff impacts. It previously anticipated sales would range from flat to up 3%. Constellation is also lowering its free cash flow estimate from $1.5 billion to $1.6 billion, to $1.3 billion to $1.4 billion.

“We remain resolutely focused on continuing to execute against our strategic objectives, including driving distribution gains, disciplined innovation, and investing behind our brands,” Newlands said.

He also pointed to lower demand from Hispanic consumers, a trend the company has seen for several months. Newlands added that high-end beer sales for the population were “more pronounced than general market declines.”

The brewer previously said the pullback was caused by Hispanic consumers’ concerns about President Donald Trump’s immigration policies and potential job losses. Constellation has said Hispanic consumers in the U.S. account for about half of its beer sales.

The company has made strides to make up for its losses. In April, it announced it was repositioning its portfolio by divesting “mainstream” wines. Constellation also authorized a share repurchase program, which it said on Tuesday has led to $604 million in buybacks in the first half of the fiscal year under its three-year $4 billion share repurchase authorization.