Constellation Brands (STZ) Q1 2027 earnings summary

Executive summary

• Leadership transition with a new CEO emphasizing brand-building, leveraging consumer insights, analytics, and disciplined execution to drive sustainable growth for both established and emerging brands.

• Focus on expanding relevance of core brands like Modelo, Corona, and Kim Crawford, and accelerating growth for Pacifico and Mi CAMPO.

• Strategic investments in data, digital, and AI capabilities to drive faster, more informed decision-making and unlock new growth opportunities.

• Net sales declined 3% year-over-year, primarily due to the 2025 Wine Divestitures, but organic net sales grew 3% and Beer segment net sales increased 2% on higher shipment volumes and favorable pricing.

• Operating income rose 18% year-over-year to $845 million, with net income up 27% to $654 million and reported EPS up 31% to $3.79.

Financial highlights

• Net sales: $2.43 billion, down 3% year-over-year; organic net sales up 3%.

• Gross profit: $1.32 billion, up 4% year-over-year; gross margin improved to 54.3%.

• Beer segment operating margin at 39%, with operating income up 2% to $891 million.

• Operating cash flow was $662 million, up 4%; free cash flow reached $485 million, up 9%.

• Declared quarterly dividend of $1.03 per share.

Outlook and guidance

• Fiscal 2027 outlook reaffirmed: Beer and Wine & Spirits organic net sales expected to range from -1% to 1%.

• Beer Business operating margin expected between 37% and 38%; Wine & Spirits between 5% and 6%.

• Comparable EPS guidance $11.20–$11.90; reported EPS outlook raised to $11.50–$12.20.

• Operating cash flow projected at $2.4–$2.5 billion, free cash flow at $1.6–$1.7 billion.

• Effective tax rate for fiscal 2027 expected to be 16–18%.