Constellation Brands Q1 FY2027 sales rise 3.3% to US$2.43B

USA – Constellation Brands has reported net sales of US$2.43 billion for the first quarter of fiscal 2027, representing a 3.3% year-on-year increase, as growth in its beer business helped offset a sharp decline in revenue from its wine and spirits division following major brand divestitures completed in 2025.  

The company also posted adjusted earnings of US$3.43 per share for the three months ended May, exceeding analysts’ expectations of US$3.19 per share, according to The Wall Street Journal.  

The wine and spirits segment recorded net sales of US$149.2 million, a 47% decline from the corresponding period last year. Constellation Brands attributed the decrease primarily to the sale of several wine brands during fiscal 2026, which significantly reduced shipment volumes.  

According to the company, first-quarter wine and spirits net sales fell 47% after shipment volumes declined by 64.1% as a direct result of the divestitures. However, organic net sales for the division increased by 8% compared with the same period in fiscal 2026, supported by a 7.7% rise in organic shipment volumes.  

Chief Executive Officer Nicholas Fink said consumer purchasing patterns weakened as the quarter progressed due to ongoing economic pressures.  

“While we saw a resurgence of purchasing behaviour amidst a more normalised start to the quarter, these financial pressures then drove a more discerning and value-conscious consumer mindset, most notably within lower-income households,” Fink said.  

He noted that higher fuel prices linked to the conflict in Iran, combined with persistent inflationary pressures, contributed to softer consumer demand during the reporting period.  

Constellation Brands’ beer business continued to deliver growth, with net sales increasing 2% to US$2.28 billion. The company said the improvement was driven by favourable pricing and higher shipments to distributors.  

However, beer depletion sales to retailers declined by 0.3%, as lower sales of Modelo Especial and Corona Extra were partially offset by growth across the Pacifico, Victoria and Modelo Chelada brands.  

Despite the mixed quarterly performance, the company reaffirmed its fiscal 2027 guidance. It continues to expect wine and spirits organic net sales to range between a 1% decline and 1% growth, while forecasting the division’s operating margin to improve by between 5% and 6%.  

Following fiscal 2026, Constellation Brands withdrew the long-term financial outlook it had issued in April 2025, citing market uncertainty. During the year, the company also divested Svedka Vodka to Sazerac and the Copper & Kings brandy business to Bourdon Spirits Company.  

Fink said, “Our portfolio continues to benefit from the strength of our brands, disciplined commercial execution, and our ability to connect with consumers across a broad range of occasions. As we continue to deepen our understanding of evolving consumer needs and invest behind our strategic priorities, we believe that we remain well positioned to drive sustainable organic growth while maintaining healthy investment in our brands.”  

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