Constellation Brands set to report Q3 2026 earnings. Here’s what to expect

Constellation Brands’ (NYSE: STZ) performance across its portfolio has been under scrutiny recently as it navigates a challenging consumer environment marked by sluggish demand and competitive pressures. With the beer giant shifting its focus to premium categories to drive sales, the upcoming earnings report is expected to shed light on how the company balances near-term challenges with long-term strategy.

Estimates

When the New York-headquartered brewer reports its third-quarter results on January 7, Wall Street will be expecting total sales of $2.17 billion and adjusted earnings of $2.64 per share. That is lower than earnings of $3.25 per share reported in the prior-year quarter on sales of $2.46 billion. In the most recent quarter, earnings beat analysts’ estimates while revenues missed.

For the stock, 2025 was a challenging year as it dropped more than 37%, primarily reflecting investor concern over weakening demand in the core beer business and portfolio challenges in premium beverages. The long-term outlook remains cautious due to a shift in consumer preferences and uncertainty over future growth. Notably, a recent share purchase by Warren Buffett’s Berkshire Hathaway and a dividend hike failed to lift investor sentiment. Nevertheless, the low valuation presents an investment opportunity, particularly to those looking to take advantage of the healthy dividend payouts.

Weak Q2

In the second quarter, net sales dropped 15.5% year-over-year to $2.65 billion, reflecting a decline in Wine & Spirits and Beer sales. The management said it expects enterprise organic net sales to decline 4-6% in fiscal 2026. Q2 earnings, excluding special items, declined to $3.63 per share from $4.32 per share in the prior-year quarter. On a reported basis, net income was $466 million or $2.65 per share, compared to a loss of $1.20 billion or $6.59 per share in Q2 2025.

Responding to a question on management’s cautious outlook during the Q2 earnings call, Constellation Brands’ CEO Bill Newlands said, “We’ve seen unprecedented volatility, and there’s very mixed results. One of the things that we track very carefully is zip code data, and the results that you are seeing in high Hispanic zip code areas are significantly worse than what you see in the general market. We’ve seen some positive uptick in some of our top five states within the general market where those zip codes, where the general market zip codes are a higher proportion of the overall consumer base.”

Missing Fizz

The demand slowdown appears to be driven by a combination of macroeconomic headwinds and a long-term shift in demographics, as younger, more health-conscious consumers pull back on per-capita consumption. Also, sales are facing incremental pressure from cannabis-related products, which are increasingly replacing alcohol in certain social and recreational occasions due to favorable government policies. However, alcohol is considered a relatively resilient consumer category that can recover as consumption patterns evolve.

Constellation Brands’ stock was trading down 2% on Friday afternoon. The shares have declined 15% in the past six months. The average stock price for the last 12 months is $164.78.