Constellation Brands, Inc. is an international producer and marketer of beer, wine, and spirits, with operations in the U.S., Mexico, New Zealand, and Italy. The company is the second-largest beer company in the U.S. and holds a strong position in the high-end beer segment, with brands such as Corona Extra, Modelo Especial, and Pacifico . Their business is organized into two main divisions: Beer, and Wine and Spirits, with the Beer segment being the largest contributor to revenue . Constellation Brands continues to expand its market presence through strategic investments and innovations, particularly in consumer-led premiumization trends and digital channels .
- Beer - Produces and markets high-end imported beer brands, including Corona Extra, Modelo Especial, and Pacifico, which account for the majority of the company's revenue. Notable achievements include Modelo Especial becoming the best-selling beer in the U.S. .
- Wine and Spirits - Focuses on higher-end brands with a portfolio that includes well-known names like Robert Mondavi Winery and Kim Crawford. This segment has been reshaped to emphasize higher-margin, higher-growth brands .
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| Name | Position | External Roles | Short Bio | |
|---|---|---|---|---|
William A. Newlands ExecutiveBoard | President and Chief Executive Officer (CEO) | Lead Director at Hormel Foods Corporation | Joined STZ in 2015; became CEO in March 2019. Previously held leadership roles at Beam Inc. and its predecessors. | View Report → |
Garth Hankinson Executive | Executive Vice President and Chief Financial Officer (CFO) | None | Joined STZ in 2004; became CFO in January 2020. Previously led corporate development and financial planning at STZ. | |
James O. Bourdeau Executive | Executive Vice President and Chief Legal Officer | None | Joined STZ in 2014; became CLO in December 2017. Previously a partner at Nixon Peabody LLP. | |
K. Kristann Carey Executive | Executive Vice President and Chief Human Resources Officer | None | Joined STZ in 2013; became CHRO in May 2022. Previously served as Chief Diversity Officer and General Counsel for the Beer Division. | |
Michael McGrew Executive | Executive Vice President, Chief Communications, Strategy, ESG & Diversity Officer | None | Joined STZ in 2014; promoted to EVP in April 2020. Oversees communications, ESG, and diversity initiatives. | |
Samuel J. Glaetzer Executive | Executive Vice President and President, Wine & Spirits Division | None | Joined STZ in 2014; became EVP and President of Wine & Spirits in March 2024. Previously led global operations and international sales. | |
Christopher J. Baldwin Board | Non-Executive Chair of the Board | Managing Partner at CVC Advisors (U.S.) Inc.; Board Member at Advantage Solutions Inc. and BJ’s Wholesale Club Holdings Inc. (not standing for re-election in 2024) | Joined STZ Board in March 2024. Former CEO and Chairman of BJ’s Wholesale Club Holdings Inc. | |
Christy Clark Board | Board Member | None | Joined STZ Board in 2019. Former Premier of British Columbia, Canada. Recognized for economic leadership and consensus building. | |
Daniel J. McCarthy Board | Board Member | None | Joined STZ Board in 2015. Former CEO of Frontier Communications Corporation. | |
Ernesto M. Hern\u00e1ndez Board | Board Member | Director at Dana Incorporated and BRP Inc. | Joined STZ Board in 2014. Former President and Managing Director of GM de Mexico. | |
Jennifer M. Daniels Board | Board Member | Chief Legal Officer and Secretary of Colgate-Palmolive Company | Joined STZ Board in 2018. Brings extensive legal expertise and governance experience. | |
Jos\u00e9 Manuel Madero Garza Board | Board Member | Director at Newmont Corporation | Joined STZ Board in 2019. Former CEO of Grupo Bepensa and senior executive at Monsanto Company. | |
Nicholas I. Fink Board | Board Member | CEO of Fortune Brands Innovations, Inc.; Board Member at Fortune Brands Innovations, Inc. | Joined STZ Board in 2021. Extensive experience in consumer brands and international business. | |
Richard Sands Board | Non-Executive Board Member | None | Joined STZ in 1979; former CEO and Chairman of the Board. Played a key role in transforming STZ into a global beverage leader. | |
William Giles Board | Board Member | Board Member at Brinker International and Floor and Decor Holdings, Inc. | Joined STZ Board in July 2023. Former CFO of AutoZone, Inc. Brings over three decades of financial expertise. |
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In the Wine and Spirits segment, despite mentioning "green shoots," the business continues to face challenges, including a significant impairment from $3 billion to $500 million. Can you explain the drivers behind such a dramatic change and what strategic actions are being taken to turn around this segment?
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Now that you've achieved your leverage target and have $2.2 billion remaining in share repurchase authorization, how do you plan to balance further capital returns to shareholders with potential investments in growth opportunities, especially considering the expected uplift in free cash flow beyond fiscal '25?
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Given that shipments have been ahead of depletions in the first half and you expect a reversal in Q3 due to maintenance activities, how confident are you in achieving the higher end of your Beer top-line growth guidance amid potential macroeconomic headwinds?
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With Beer gross margins benefiting from cost savings and efficiency initiatives, and with increased marketing spend and less fixed cost absorption expected in the second half, how sustainable is your margin expansion going forward, and what risks might impact these margins?
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Despite the significant shelf space gains in the spring resets, can you quantify the actual sales lift from these gains, and how does this factor into your expectations for accelerated top-line growth in the Beer segment in the second half, considering the current macroeconomic pressures on consumer demand?
Research analysts who have asked questions during CONSTELLATION BRANDS earnings calls.
Andrea Teixeira
JPMorgan Chase & Co.
5 questions for STZ
Bonnie Herzog
Goldman Sachs
5 questions for STZ
Dara Mohsenian
Morgan Stanley
5 questions for STZ
Filippo Falorni
Citigroup Inc.
5 questions for STZ
Kaumil Gajrawala
Jefferies
5 questions for STZ
Lauren Lieberman
Barclays
4 questions for STZ
Nik Modi
RBC Capital Markets
4 questions for STZ
Christopher Carey
Wells Fargo & Company
3 questions for STZ
Peter Grom
UBS Group
3 questions for STZ
Robert Moskow
TD Cowen
3 questions for STZ
Bryan Spillane
Bank of America
2 questions for STZ
Michael Lavery
Piper Sandler & Co.
2 questions for STZ
Peter Galbo
Bank of America
2 questions for STZ
Robert Ottenstein
Evercore ISI
2 questions for STZ
Stephen Robert Powers
Deutsche Bank
2 questions for STZ
William Kirk
ROTH MKM
2 questions for STZ
Andrew Strelzik
BMO Capital Markets
1 question for STZ
Carlos Alberto Laboy
HSBC
1 question for STZ
Gerald Pascarelli
Needham & Company
1 question for STZ
Kevin Grundy
BNP Paribas
1 question for STZ
Nadine Sarwat
Bernstein
1 question for STZ
Competitors mentioned in the company's latest 10K filing.
| Company | Description |
|---|---|
The company is a principal competitor in the beer segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. | |
The company is a principal competitor in the beer segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. | |
Heineken | The company is a principal competitor in the beer segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
Mark Anthony | The company is a principal competitor in the beer segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
The company is a principal competitor in the beer segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. | |
Deutsch Family Wine & Spirits | The company is a principal competitor in the wine segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
Duckhorn Portfolio | The company is a principal competitor in the wine segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
E. & J. Gallo Winery | The company is a principal competitor in both the wine and spirits segments, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
Ste. Michelle Wine Estates | The company is a principal competitor in the wine segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
Treasury Wine Estates | The company is a principal competitor in the wine segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
Trinchero Family Estates | The company is a principal competitor in the wine segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
The Wine Group | The company is a principal competitor in the wine segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
Bacardi USA | The company is a principal competitor in the spirits segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
Beam Suntory | The company is a principal competitor in the spirits segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
The company is a principal competitor in the spirits segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. | |
The company is a principal competitor in the spirits segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. | |
Fifth Generation | The company is a principal competitor in the spirits segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
Pernod Ricard | The company is a principal competitor in the spirits segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
Sazerac Company | The company is a principal competitor in the spirits segment, competing on the basis of quality, price, brand recognition and reputation, and distribution strength. |
| Customer | Relationship | Segment | Details |
|---|---|---|---|
Reyes Beer Division | Major Beer Distributor | Beer | FY25: 25.4% of net sales , AR: $110.5M (15.0%) ; FY24: 25.1% of net sales , AR: $147.4M (17.7%) ; FY23: 22.7% of net sales , AR: N/A |
Southern Glazer’s Wine & Spirits | Major Wine & Spirits Distributor | Wine & Spirits | FY25: 11.2% of net sales , AR: $242.7M (32.9%) ; FY24: 11.7% of net sales , AR: $233.0M (28.1%) ; FY23: 13.0% of net sales , AR: N/A |
Notable M&A activity and strategic investments in the past 3 years.
| Company | Year | Details |
|---|---|---|
Sea Smoke | 2024 | Sea Smoke was acquired in June 2024 for $170.0 million (subject to adjustments) and included the purchase of a California-based luxury wine brand, its vineyards, production facility, as well as goodwill, inventory, and trademark. This deal supports the company’s strategic focus on consumer-led premiumization trends by expanding its premium Wine and Spirits portfolio. |
Domaine Curry | 2023 | The Domaine Curry acquisition was completed in June 2023 as part of a portfolio enhancement strategy aimed at capturing younger legal drinking age and multicultural consumers in the luxury wine segment, with the brand built by Ayesha Curry and Sydel Curry-Lee. |
Austin Cocktails | 2022 | In April 2022, Constellation Brands acquired the remaining 73% ownership interest in Austin Cocktails, a small batch RTD cocktails brand, with the purchase price structured to include an earn-out over five years. This acquisition, which has been almost entirely self-funded, reinforces the company’s premium RTD offerings and aligns with consumer-led premiumization trends. |
Lingua Franca | 2022 | Completed in March 2022, the Lingua Franca acquisition included a collection of Oregon-based luxury wines, a vineyard, and a production facility, along with the trademark and inventory, with the deal’s purchase price featuring an earn-out over seven years. The integration into the Wine and Spirits segment supports the expansion of the premium portfolio. |
My Favorite Neighbor | 2021 | Finalized in November 2021, the acquisition of My Favorite Neighbor involved purchasing the remaining 65% interest in a super‑luxury, direct‑to‑consumer wine business and its associated assets (goodwill, trademarks, inventory, property, plant, and equipment), with an earn‑out over 10 years (including a 50% minimum guarantee) and recognition of a $13.5 million remeasurement gain. This adds significant premium DTC value to the portfolio. |
Recent press releases and 8-K filings for STZ.
- On October 16, 2025, Constellation submitted notice to terminate its $500 million delayed draw term loan Credit Agreement with Bank of America and other lenders, effective October 21, 2025; no borrowings were outstanding and no termination penalties were incurred.
- On October 17, 2025, the company entered into Supplemental Indenture No. 36 to issue $500 million aggregate principal of 4.950% Senior Notes due 2035 at 99.716% of par.
- The Notes pay interest semi-annually on May 1 and November 1 (commencing May 1, 2026) and mature on November 1, 2035; they are redeemable under customary terms in the indenture.
- On October 15, 2025, Constellation Brands entered into an underwriting agreement to sell $500 million aggregate principal of 4.950% Senior Notes due 2035 at a public offering price of 99.716%.
- The offering is scheduled to close on October 17, 2025, with net proceeds earmarked for general corporate purposes, including redeeming $500 million of 4.400% Senior Notes due 2025.
- The Notes will bear interest at 4.950% per annum, payable semi-annually on May 1 and November 1, and mature on November 1, 2035.
- The issuance is made under the Company’s April 17, 2012 indenture, supplemented by Supplemental Indenture No. 36 dated October 17, 2025, with the legal opinion filed as Exhibit 5.1.
- Macroeconomic headwinds driven by consumer concerns weigh on beer volume growth; 80% of consumers express socioeconomic worries, with Hispanic consumers notably constrained; brand loyalty remains strong, with Gen Z share twice the industry average.
- FY 2026 CAPEX guidance maintained despite a lowered top-line outlook due to committed long-lead investments; potential adjustments beyond FY 2026 will be disclosed with FY 2027 guidance.
- Beer operating margins face headwinds of 100 bps from fixed costs and tariffs plus 60 bps for elevated marketing spend; seasonal maintenance and lower H2 volumes will step down margins, which remain best-in-class.
- Distributor beer inventories were rebalanced in Q2 after summer overshipments, returning to historical norms; shipments and depletions are expected to track closely in H2.
- Generated $2.65 reported EPS (+140% YoY) and $3.63 comparable EPS (–16% YoY) on $2.481 B net sales (–15% YoY) and $874 M operating income (+171% reported, –13% comparable)
- Beer Business led U.S. beer category with #1 dollar share gains, outpacing beverage alcohol share by 1 pp and beer share by 2 pp in tracked channels
- Wine and Spirits net sales fell 65% to $136 M with an operating loss of $19.8 M, yet outperformed the higher-end wine segment in U.S. depletion growth
- Delivered YTD operating cash flow of $1.5 B and free cash flow of $1.1 B, repurchased $604 M of shares, declared a $1.02 quarterly dividend, and updated FY 2026 reported EPS guidance to $9.86–$10.16 (comparable $11.30–$11.60)
- Management cites lower demand from Hispanic consumers due to fear of ICE at points of sale.
- Sales are no longer growing, yet the stock trades at 12× earnings versus Molson Coors at 9× earnings (market caps ~$26 B vs. ~$9.9 B), implying potential overvaluation.
- The beer sector is hindered by tariffs and consumer hesitancy, notably affecting Constellation’s core Modelo portfolio.
- Investor interest based on rumored Berkshire Hathaway support may be misplaced, per commentary on strategic missteps.
- Reported Q1 FY26 net sales of $2.515 B (−6% reported, −4% organic) and EPS of $2.90 (−39%); comparable EPS was $3.22 (−10%).
- Beer segment delivered net sales of $2.235 B (−2%) and operating income of $873 M (−5%) in Q1 FY26.
- Wine & Spirits net sales declined to $280.5 M (−28% reported, −21% organic) with an operating loss of $6 M (−110%).
- Maintained FY26 guidance: reported EPS $12.07–$12.37, comparable EPS $12.60–$12.90; beer net sales flat to +3%; Wine & Spirits organic net sales down 17–20%.
- Proactive address of consumer demand headwinds amid socioeconomic factors, with Q1 net sales of $2.515 billion (−6%) and diluted EPS of $2.90 (−39%; comparable EPS $3.22, −10%).
- Beer business achieved leading dollar share gains in U.S. tracked channels, outpacing the total beverage alcohol category by over 2 percentage points.
- Completed divestiture of mainstream wine brands in June, refocusing Wine & Spirits on higher-growth, higher-margin premium portfolio.
- Generated operating cash flow of $637 million and free cash flow of $444 million, returned $381 million in share repurchases, and declared a $1.02 per-share dividend.
- Updated FY 2026 reported EPS guidance to $12.07–$12.37 and maintained comparable EPS outlook of $12.60–$12.90, with operating cash flow target of $2.7–$2.8 billion.
- The Three Mile Island nuclear plant in Pennsylvania, renamed the Crane Clean Energy Center, is scheduled to restart operations by 2027, a year ahead of prior plans.
- The project (Unit 1 only) will supply over 800 MW of zero-emission power to the PJM Interconnection grid, enhancing regional energy stability.
- Milestones achieved include hiring 64% of required full-time staff, training new licensed reactor operators, purchasing critical equipment, and receiving early PJM interconnection approval.
- Backed by Microsoft’s AI optimization and supported by the 2022 Inflation Reduction Act’s nuclear production tax credits, the restart underscores a broader U.S. resurgence in nuclear energy.
- Consumer behavior challenges were a key focus, with discussions highlighting cautious spending trends among Hispanic and non-Hispanic consumers driven by inflation and related concerns.
- Strategic initiatives and product innovation were emphasized, including enhanced price pack architecture, new SKU introductions such as Corona Sun Brew and Corona Non-Alc, and leveraging a lean portfolio of about 60 SKUs.
- The company reaffirmed a 39-40% beer margin target and detailed cost-saving measures, projecting robust cash flow improvements with operating cash flow estimated at $9B and free cash flow around $6B by FY28.
- There was a strong focus on marketing and shelf space strategies, aiming to boost brand support for Modelo, Corona, and Pacifico through targeted advertising and improved distributor relationships.
- Management attributed the recent beer growth slowdown to non-structural factors—notably challenging macroeconomic conditions and changing Hispanic consumer behavior—while expressing confidence in brand health and long‐term recovery.
- Executives detailed plans to maintain best-in-class operating margins through modest volume growth, pricing actions, and cost efficiencies despite headwinds like tariffs and depreciation.
- The call highlighted initiatives to expand distribution and introduce more SKUs across key brands such as Modelo Especial, Corona Extra, and Pacifico to drive future growth.
- Capital allocation remains disciplined with a target leverage of 3x and an opportunistic share buyback program recently authorized for $4 billion through FY '28.