01.07.2025 20:49
Constellation Brands, a prominent brewer, announced disappointing first-quarter fiscal 2026 earnings on Tuesday, falling short of Wall Street's expectations. The company's revenue and earnings per share lagged behind analyst predictions, primarily due to the impact of increased aluminum tariffs. Despite this weaker-than-anticipated performance, Constellation Brands maintained its full-year fiscal 2026 forecast, demonstrating confidence in its ability to achieve its financial goals.
The stock experienced a decline of over 1% in after-hours trading, adding to its substantial year-to-date loss exceeding 20%. This downturn reflects investor concerns surrounding the detrimental effects of President Trump's tariffs on the demand for the company's imported beer brands. Specifically, the company reported adjusted earnings per share of $3.22, compared to the anticipated $3.31, and revenue of $2.52 billion, slightly below the expected $2.55 billion.
Constellation Brands' first-quarter net income also suffered a significant decrease, falling from $877 million a year earlier to $516.1 million, translating to a drop in earnings per share from $4.78 to $2.90. A further 5.8% decline was observed in net sales, reaching $2.52 billion. This underperformance is directly attributable to President Trump's tariffs, which came into effect in early April on canned beer imports and reached a 50% peak on aluminum in early June. These tariffs pose a considerable challenge to Constellation, as both aluminum and imported beer are critical components of its operations.
The company's reliance on imported Mexican beers, including popular brands like Corona, Pacifico, and Modelo Especial – the latter having recently surpassed Bud Light as the top-selling beer in the US – makes it particularly vulnerable to these trade barriers. These tariffs, therefore, significantly impact Constellation's business, which generates approximately 80% of its revenue from its beer portfolio. The report covering the three months ending May 31st clearly reflects the adverse effects of these newly implemented tariffs. The information was obtained from internet sources.
