Constellation Brands (STZ) Q2 2027 earnings summary

Executive summary

• Q2 net sales rose 6% to $2.633 billion; comparable operating income increased 1%, and comparable EPS rose 3% to $3.74.

• Net income attributable to CBI increased 21% to $565.8 million, primarily supported by a lower tax provision; reported diluted EPS rose 25% to $3.32.

• The portfolio was the top beverage-alcohol dollar-share gainer in Q2, with share gains accelerating across Beer and Wine & Spirits.

• FY27 comparable EPS guidance remained $11.20–$11.90, with September trends supporting the high end if sustained.

Financial highlights

• Q2 GAAP operating income fell 8% to $805.0 million; comparable operating income rose 1% to $896.6 million.

• Q2 gross profit increased 6% to $1.393 billion; net income attributable to CBI was $565.8 million and diluted GAAP EPS was $3.32.

• Six-month net sales increased 1%, operating income 4%, net income attributable to CBI 24%, and diluted EPS 28%.

• H1 comparable operating income rose 4% to $1.731 billion; comparable diluted EPS increased 5% to $7.16.

• Share repurchases totaled $530 million year-to-date through September; $2.546 billion remained under authorization as of September 30.

Outlook and guidance

• FY27 reported EPS guidance is $11.85–$12.55; comparable EPS guidance remains $11.20–$11.90.

• FY27 organic net sales growth is expected at (1)% to 1%; comparable operating margin guidance is 32%–33%.

• FY27 operating cash flow is expected at $2.4–$2.5 billion and free cash flow at $1.6–$1.7 billion; capital expenditures are expected at $800 million.

• Beer H2 operating margin is expected at 34.5%–35.5%; marketing is expected above 10% of net sales, including above 11% in Q3, and SG&A above 7%.

• Wine & Spirits H2 shipments are expected to decline as distributor inventories are reduced; FY27 segment operating margin guidance is 5%–6%.