Modelo owner Constellation Brands outlook disappoints as tariffs weigh on forecast

Constellation Brands on Wednesday gave a weaker-than-expected outlook for its fiscal 2026 and slashed its medium-term forecast as it faces higher U.S. tariffs on most of its beer.

The Modelo owner also topped Wall Street’s estimates for its fiscal 2025 fourth-quarter earnings and revenue, but its quarterly performance took a backseat to its outlook.

Last week, the Trump administration slapped a 25% tariff on all imported canned beer and empty aluminum cans, effective on April 4. While President Donald Trump earlier on Wednesday said so-called reciprocal tariffs on countries excluding China would fall to 10% for the next 90 days, the temporary abatement does not apply to sector-specific duties, like those on aluminum.

Constellation imports all of its beer from Mexico. Its beer portfolio, which includes Modelo, Corona and Pacifico, accounted for 78% of the company’s net sales during the quarter.

The company on Wednesday also announced that it plans to reposition its portfolio by divesting “mainstream” wines and focusing on brands that price their bottles at or above $15. In December, the company sold its Svedka vodka brand to Sazerac. Both moves come as the company’s wine and spirits segment has struggled for several quarters.

Shares of the company fell 3% in extended trading. Constellation’s stock closed up 7% on Wednesday afternoon after Trump announced the change in his trade plans.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: $2.63 adjusted vs. $2.28 expected
• Revenue: $2.16 billion vs. $2.13 billion expected

For fiscal 2026, Constellation anticipates comparable earnings per share in a range of $12.60 to $12.90, well below Wall Street’s estimates of $13.97 per share. The company is projecting that organic net sales will range from declining 2% to rising 1%. Beer sales, which account for the bulk of its business, will range from flat to up 3%, according to the company’s fiscal 2026 outlook.

Constellation also lowered its medium-term outlook for fiscal 2027 and 2028. It now projects that enterprise sales will rise between 2% and 4%, down from its prior estimate of growth between 6% and 8%.

The company also plans to lower its capital expenditures in fiscal 2027 and 2028, compared with its prior outlook of spending $5 billion from fiscal 2024 to fiscal 2028. Constellation now projects that its capital expenditures will fall 40% year-over-year in fiscal 2027 and 35% in the following fiscal year.