Constellation Brands reported a decline in revenue for its fourth quarter, as demand for beer, wine, and spirits remained under pressure.
The company, which imports popular beer brands like Corona and Modelo, said consumers have become more cautious with their spending on alcohol over the past year. Many are now choosing smaller pack sizes or lower-priced options due to ongoing financial pressures, especially among lower-income households.
The company also highlighted weaker sales in areas with a higher Hispanic population, which has impacted overall performance. Although beer sales saw a slight increase of 1% in the quarter, overall demand remained subdued.
Looking ahead, the company expects continued uncertainty and has withdrawn its long-term financial outlook for fiscal 2028. CEO Bill Newlands said consumers are likely to remain cautious as economic conditions continue to evolve.
For the current fiscal year, Constellation expects earnings per share between $11.20 and $11.90, lower than market expectations. It also forecasts overall sales growth to remain flat, ranging from a 1% decline to a 1% increase across its beer, wine, and spirits segments.
The broader beer industry is also facing changing consumer preferences, with more people shifting toward healthier lifestyles and non-alcoholic beverages. In response, Constellation has been expanding its portfolio, including launching a non-alcoholic version of Modelo.
In the fourth quarter, the company reported a profit of $201.8 million, compared to a loss in the same period last year. Adjusted earnings came in above expectations at $1.90 per share.
However, total revenue fell 11% to $1.92 billion. While beer sales rose to $1.73 billion due to better pricing and higher shipments, the wine and spirits segment saw a sharp 58% drop in sales, mainly due to business restructuring, lower volumes, and pricing changes.
The company’s shares slipped slightly in after-hours trading, although the stock has gained nearly 9% so far this year.
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