Constellation Brands (STZ -0.83%) recorded a double miss with its latest earnings report, published after market close Tuesday. Investors were clearly in a forgiving mood, however, as they traded up the adult beverage company's shares by almost 5% the following day. This was more than good enough to crush the S&P 500's (^GSPC 0.83%) slightly under-0.5% rise.
Beer blues, stumbling spirits
For its first quarter of fiscal 2026, Constellation booked just under $2.52 billion in net sales, which was down from $2.66 billion in the same period the previous year. Non-GAAP (generally accepted accounting principles) adjusted net profit saw a steeper fall, tumbling by 12% year over year to hit nearly $573 million, or $3.22 per share.
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Analysts were expecting better. Their consensus for net sales was $2.56 billion, and that for adjusted profitability was $3.41.
Beer, Constellation's largest and therefore most important product category, saw only slight decreases in both volume and sales compared to wine and spirits. Net sales of suds fell 2% (to $2.2 billion), while the take from wine and spirits plummeted by 28% to under $281 million.
A half-full glass
Forward-looking investors were likely cheered by Constellation's guidance, which anticipates flat to 3% growth in net sales for beer across fiscal 2026, although wine and spirits are expected to continue their decline with a drop of 17% to 20%.
All told, organic net sales should slide by 2% or grow as much as 1% (however, the fiscal 2025 numbers include Svedka, the vodka brand the company sold earlier this year).
