Corona beer maker Constellation Brands tops second-quarter estimates on resilient demand

Constellation Brands, the maker of Corona beer, exceeded Wall Street's second-quarter projections by reporting higher profit and sales. The resilient demand for its beer brands like Modelo Especial and Victoria enabled the company to counteract challenges in the alcohol industry during a period of reduced consumer spending.

In addition to the strong beer performance, Constellation announced the acquisition of SpikedAde, a vodka-based ready-to-drink beverage company, for a minimum of $75 million. The deal may also involve further payments up to $278 million within five years, contingent upon the brand's success and Constellation's capital allocation plans.

The company's beer segment witnessed a 5% boost in sales, while its wine and spirits business saw a 17% increase in quarterly net sales. Earnings per share, when adjusted for certain factors, came in at $3.74, surpassing the previously estimated $3.56.

Constellation maintained its fiscal 2027 adjusted earnings forecast between $11.20 and $11.90 per share and anticipated a slightly declining or stable organic net sales range of 1% growth to 1% decline. However, the company reduced its annual operating margin forecast from 32% to 33% to a range of 31% to 32%.

Shares of Constellation plummeted 4.5% in extended trading following the earnings release. The stock has declined approximately 16% throughout the year. In April, Constellation had erased its fiscal 2028 earnings forecast, citing a volatile operating environment and limited short-term visibility in the industry.