Constellation Brands (STZ) Q4 2025 earnings summary

Executive summary

• Achieved 2% net sales growth (3% organic) in FY25 to $10.2B, with substantial comparable operating margin improvement and double-digit comparable EPS growth, despite softer consumer demand and challenging macroeconomic conditions.

• Beer Business remained the #1 dollar share gainer in U.S. beverage alcohol, with strong performance from Modelo Especial and Pacifico, and significant share gains among Hispanic consumers.

• Completed major portfolio reshaping, including SVEDKA and 2025 Wine Divestitures, to focus on higher-end brands and drive $200M+ in annualized cost savings by FY28.

• Returned nearly $1.9B to shareholders in FY25, including over $1.1B in share repurchases and increased quarterly dividend to $1.02 per share.

• Maintained disciplined capital allocation, with $1.1B in share repurchases and $732M in dividends in FY25.

Financial highlights

• FY25 net sales rose 2% to $10.2B; comparable operating income grew 7% to $3.5B; comparable EPS increased 11% to $13.78; operating cash flow $3.2B; free cash flow $1.94B.

• Beer segment net sales up 5% to $8.54B; operating income up 10% to $3.39B; operating margin increased 180 bps to 39.7%.

• Wine & Spirits net sales declined 7% to $1.67B; operating income down 18% to $325M, reflecting divestitures.

• FY25 reported net loss attributable to CBI of $81M due to non-cash impairments and divestiture impacts.

• Achieved comparable net leverage ratio target in FY25, maintained under 3.0x.

Outlook and guidance

• FY26 organic enterprise net sales expected to be down 2% to up 1%, reflecting divestitures and new tariffs; comparable EPS guidance: $12.60–$12.90; operating cash flow $2.7B–$2.8B; free cash flow $1.5B–$1.6B.

• Beer net sales growth guidance: 0–3% for FY26, 2–4% for FY27–FY28; operating income growth: 0–2% for FY26; operating margins expected at 39–40% for FY26–FY28.

• Wine and Spirits organic net sales expected to decline 17–20% in FY26, with operating income to decline 97–100% and margin near zero; improvement expected post-divestiture, with 22–24% operating margins by FY27–FY28.

• Cumulative operating cash flow of ~$9B and free cash flow of $6–7B expected from FY26–FY28.

• Guidance incorporates the impact of U.S. and Canadian tariffs, including delayed effectiveness for some U.S. tariffs affecting wine and spirits.