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.

• 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.

• Beer Business led U.S. dollar share gains, with Modelo Especial maintaining its #1 position by dollar sales.

• Wine & Spirits Business outperformed the total wine category in both dollar and volume sales growth, with Kim Crawford and Mi CAMPO tequila showing strong trends.

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%.

• Marketing spend for beer is planned at 9.5% of sales, with heavier investment in the first half of the year, especially around the FIFA World Cup.

Outlook and guidance

• Fiscal 2027 outlook expects organic net sales to range from -1% to +1%, with comparable operating margin between 32% and 33%.

• 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.

• Wine and spirits margins are expected to remain pressured due to category headwinds, channel softness, and distributor inventory rebalancing, but target margins in the low 20s% are still seen as achievable over the medium term.

• Comparable effective tax rate expected to increase to 20%.

• Fiscal 2028 outlook withdrawn due to limited near-term visibility.