What Happened?
Shares of beer, wine, and spirits company Constellation Brands (NYSE: STZ) jumped 6.9% in the morning session after it reported decent first-quarter 2026 results that saw it beat revenue and profit estimates but issue weak guidance.
The company posted revenue of $1.92 billion and adjusted earnings of $1.90 per share, surpassing Wall Street's expectations of $1.88 billion and $1.71 per share, respectively. However, the results were not entirely positive. Revenue declined 11.3% year over year, and adjusted earnings per share were down from $2.63 in the same period last year. Furthermore, the company’s adjusted EBITDA of $573.4 million missed estimates, and its full-year earnings guidance came in below consensus. The stock's positive move suggests investors chose to focus on the headline beats rather than the underlying weaknesses and disappointing outlook.
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What Is The Market Telling Us
Constellation Brands’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock dropped 7.4% on the news that the company lowered its financial outlook for fiscal year 2026, citing a challenging macroeconomic environment and weakening consumer demand.
The owner of popular brands like Corona and Modelo now projects comparable earnings per share of $11.30 to $11.60, a significant reduction from the prior forecast of $12.60 to $12.90. The company also expects a 4% to 6% decline in organic net sales. Management attributed the revision to a sudden drop in beer sales, noting that purchasing declines among Hispanic consumers—a key demographic—were particularly pronounced. This trend, combined with lower volumes and the impact of tariffs, prompted the more cautious outlook.
Constellation Brands is up 13.3% since the beginning of the year, but at $160.00 per share, it is still trading 18.2% below its 52-week high of $195.62 from May 2025. Despite the year-to-date gain, investors who bought $1,000 worth of Constellation Brands’s shares 5 years ago would now be looking at only $713.82.
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