Constellation Brands beat quarterly earnings and revenue expectations as its beer brands gained market share, but continued consumer caution tempered results.
As it navigates high food and fuel prices and choosy shoppers, Constellation is turning to special occasions and diversification to help drive sales.
The maker of Modelo Especial, Corona and Pacifico on Wednesday reported fiscal second-quarter adjusted earnings of $3.74 per share on $2.63 billion in revenue, ahead of Wall Street estimates of $3.56 and $2.54 billion, respectively.
Beer revenue rose 5% to roughly $2.47 billion, while beer shipments increased 5.5%. However, the company said beer depletions, a measure of sales from distributors to retailers and other customers, declined slightly during the quarter, indicating consumer demand was softer than shipment demands suggest.
“We have spent much of the first half rebuilding distributor inventory levels,” said Constellation Brands CEO Nicholas Fink on the company’s earnings call on Thursday. “While there is always going to be month-to-month variability, September depletions are trending in the right direction.”
The broader backdrop remains challenging for beer sellers. U.S. beer sales fell 1.8% year over year in the two weeks ended September 19, according to Nielsen’s latest data.
Still, Fink said September beer depletions improved even beyond the benefit of a later Labor Day, and that the recovery was broad-based across channels. He said consumers were “across the board” engaging in the category.
Some analysts said the results indicated elevated gas prices have dampened Constellation’s performance.
“Progress [for Constellation] had accelerated to start 2026, but has been derailed by higher fuel costs,” Roth Capital analyst Bill Kirk wrote, though he said Constellation continues to deliver against its fiscal 2027 plan. Kirk has a buy rating and $209 price target on the stock, compared to the roughly $116 a share price as of Wednesday.
Fink said Constellation saw particular strength in club stores, which have benefited as cash-strapped shoppers seek deals on fuel and groceries. The company is also working to better tailor its product and pack sizes across channels, as consumers make different choices depending on where they are shopping, and for what occasion.
That focus on events also extends to younger drinkers. Fink said consumers are increasingly buying beer for specific moments, rather than treating it as a default purchase, and Constellation is leaning into sports, music, beach activations and other occasions to drive sales.
The company’s pricing strategy reflects consumer caution around spending.
CFO Garth Hankinson said Constellation has been selective with price increases, keeping them at the low end of its usual range given the “macroeconomic backdrop and the impact that that’s having on our consumer.” Hankinson said it is “much more cost-effective to retain your consumers than it is to try to regain your consumers.”
That price sensitivity is especially important for Constellation, given its reliance on Hispanic shoppers. About 40% of spending on Constellation’s beer comes from Hispanic consumers, compared with roughly 15% for the overall beer category, according to company data.
That cohort has faced more economic concerns, including pressure from the labor market and household finances in part fueled by President Donald Trump’s mass deportation policy. Constellation has previously said that beer demand has been weaker in areas with larger Hispanic populations, although it has also pointed to improving trends in some markets.
Constellation is also moving beyond its core beer business. The company announced Tuesday that it would acquire SpikedAde, a spirit-based ready-to-drink beverage brand, for $75 million upfront, with up to another $278 million in potential payments tied to future performance.
The deal gives Constellation a foothold in a new segment that has drawn more interest from consumers. Fink said the company aims to “remain relevant to our consumers and to our customers,” adding that distributors have urged Constellation to get into growing categories beyond beer.
Some analysts approved of the move, as well.
“We consider the acquisition attractive, giving [Constellation] exposure to the fast-growing RTD subcategory,” said Piper Sandler analyst Michael Lavery, who also noted that Stateside Vodka’s competing Super Lyte brand has also had “a very strong start” on the East Coast.
Lavery has a neutral rating and $161 price target on Constellation’s stock.
While Fink said beer will remain the company’s primary source of value creation, he called SpikedAde a “long, wide-open runway” for Constellation’s brand-building and distribution capabilities.
According to the Distilled Spirits Council of the United States, sales of premixed cocktails including spirits-based RTDs grew 16.4% in 2025 to $3.8 billion, making them the spirits industry’s strongest growth category.
