Constellations Brands beat quarterly profits and revenue expectations as its beer brands gained market share, but continued consumer caution tempered results.
As it faces high food and fuel prices and demanding shoppers, Constellation is turning to special occasions and diversification to boost sales.
The maker of Modelo Especial, Corona and Pacifico on Wednesday reported second-quarter adjusted earnings of $3.74 per share on revenue of $2.63 billion, ahead of Wall Street estimates of $3.56 billion and $2.54 billion, respectively.
Beer revenue increased 5%, to about $2.47 billion, while beer shipments increased 5.5%. However, the company said beer runs, a measure of sales from distributors to retailers and other customers, declined slightly during the quarter, indicating consumer demand was weaker than shipping requests suggest.
“We spent much of the first half replenishing distributor inventory levels,” Nicholas Fink, CEO of Constellation Brands, said during the company’s earnings conference call Thursday. “While there will always be month-to-month variability, September’s depletions are moving in the right direction.”
The general context remains difficult for beer sellers. U.S. beer sales fell 1.8% year over year in the two weeks ended September 19, according to the latest Nielsen data.
Still, Fink said September beer runs improved even beyond the benefit of a later Labor Day, and that the recovery has been generalized across all channels. He said consumers were “across the board” engaging in the category.
Some analysts said the results indicated that high gas prices had dampened Constellation’s performance.
“Progress (for Constellation) accelerated in early 2026, but was derailed by rising fuel costs,” wrote Bill Kirk, an analyst at Roth Capital, while saying Constellation continues to meet its plan for fiscal 2027. Kirk has a buy rating and a $209 price target on the stock, up from about $116 per share on Wednesday.
Fink said Constellation saw particular strength in club stores, which benefited as cash-strapped shoppers sought deals on fuel and groceries. The company is also working to better tailor its product and packaging sizes across channels as consumers make different choices depending on where they shop and for what occasion.
This 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 leveraging sports, music, beach activations and other occasions to drive sales.
The company’s pricing strategy reflects consumers’ caution about spending.
Chief Financial Officer Garth Hankinson said Constellation has been selective in its price increases, keeping them at the lower end of its usual range given the “macroeconomic environment and the impact that has on our consumer.” Hankinson said it’s “much more profitable to retain your consumers than to try to win them back.”
This price sensitivity is particularly important for Constellation, given its reliance on Hispanic buyers. About 40% of spending on Constellation beer comes from Hispanic consumers, compared to about 15% for the beer category overall, according to company data.
This cohort has faced more economic concerns, including labor market and household finance pressures, fueled in part by President Donald Trump’s mass deportation policy. Constellation previously said demand for beer was weaker in areas with large Hispanic populations, although it also pointed to improving trends in some markets.
Constellation also goes beyond its core business, beer. The company announced Tuesday that it will acquire SpikedAde, a ready-to-drink spirits brand, for $75 million up front, with up to $278 million more in potential payments tied to future performance.
The deal gives Constellation a foothold in a new segment that is attracting more interest from consumers. Fink said the company aims to “stay relevant to our consumers and our customers,” adding that distributors have been urging Constellation to move into growing categories beyond beer.
Some analysts also approved of the move.
“We view the acquisition as attractive, giving (Constellation) exposure to the fast-growing RTD subcategory,” said Piper Sandler analyst Michael Lavery, who also noted that Stateside Vodka’s competing brand, Super Lyte, has also gotten off to “a very good start” on the East Coast.
Lavery has a Neutral rating and a $161 price target on Constellation 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 ready-to-drinks, increased 16.4% in 2025 to $3.8 billion, making it the fastest-growing category in the spirits industry.
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