Constellation Brands (STZ) Q4 2026 earnings summary

Executive summary

• Incoming CEO Nicholas Fink emphasized a seamless leadership transition and confidence in the company's strategy, highlighting strengths in high-end beer, a reshaped wine and spirits business, and consistent share gains.

• Outgoing CEO Bill Newlands noted solid momentum in the beer business despite a challenging consumer environment, with Modelo Especial maintaining its leadership as the top beer brand by dollars in the U.S.

• Fiscal 2026 reported net sales declined 10% year-over-year to $9.14 billion, with comparable net sales also down 10%.

• Reported net income attributable to shareholders was $1.69 billion, a 2,172% increase year-over-year, driven by lapping prior-year losses and divestitures.

• Returned over $1.6 billion to shareholders, including $924 million in share repurchases and increased quarterly dividend by 1%.

Financial highlights

• Beer business ended the year with sequential gains and improved depletions, reversing prior trends.

• Fiscal 2026 reported EPS was $9.61; comparable EPS was $11.82, down 14% year-over-year.

• Operating cash flow for fiscal 2026 was $2.7 billion; free cash flow reached $1.8 billion.

• Gross margin for Beer segment was 52.5% for the year; Wine & Spirits gross margin was 40.3%.

• Solid cash generation enabled reinvestment and over $900 million returned to shareholders last year.

Outlook and guidance

• Fiscal 2027 reported EPS guidance is $11.10–$11.80; comparable EPS guidance is $11.20–$11.90.

• Beer top-line guidance for the upcoming fiscal year is -1% to +1%, reflecting cautious optimism amid continued volatility and low visibility.

• Beer operating margin guidance is 37%-38%, down from prior guidance of 39%-40%, mainly due to fixed cost absorption from the new Veracruz brewery and increased marketing investments.

• Free cash flow targeted at $1.6–$1.7 billion; operating cash flow at $2.4–$2.5 billion.

• Fiscal 2028 outlook withdrawn due to limited near-term visibility.