$STZ · CONSTELLATION BRANDS, INC.

Constellation Brands reported Q2 FY2027 results for the period ended August 31, 2026, with GAAP EPS of $3.32 (+25% YoY) and comparable EPS of $3.74 (+3% YoY). Net sales rose 6% to $2.63B, driven by a 5.5% increase in beer shipment volumes. Beer operating income grew 1% to $964.2M, though operating margin contracted 160 bps to 39.0% due to increased marketing spend. Wine & Spirits net sales jumped 17% to $159.4M, with operating income swinging to $6.1M from a $19.8M loss. The company reaffirmed FY2027 comparable EPS guidance of $11.20–$11.90 and updated reported EPS to $11.85–$12.55. Year-to-date, STZ repurchased $530M of shares and generated $1.1B in free cash flow (+4% YoY). The board declared a $1.03 quarterly dividend.

Extended-hours last trade $110.38, down 4.77% vs regular close. Despite a 25% YoY GAAP EPS beat and accelerating share gains in beer, the after-hours selloff suggests investors are concerned about beer depletion weakness (Modelo Especial and Corona Extra both declined) and the 160 bps margin compression in the core beer segment.

Major beer producer posted strong EPS growth but underlying depletion weakness in flagship brands and margin compression triggered a sharp after-hours selloff despite share-gain leadership.

Constellation's beer portfolio was the #1 dollar and volume share gainer in Circana U.S. tracked channels, outperforming the total beer category by 4 percentage points. However, depletion declines for flagship brands Modelo Especial and Corona Extra contrast with the company's share-gain narrative and reflect broader consumer headwinds in premium beer.

Beer depletion trends turned negative despite share gains, signaling category softness. Operating margin compression in beer (160 bps) from elevated marketing spend may pressure profitability if top-line growth does not reaccelerate. Wine & Spirits remains subscale at 3.8% operating margin.