Constellation Brands beat Wall Street expectations for the second fiscal quarter, posting adjusted earnings of $3.74 per share and revenue of $2.63 billion versus estimates of $3.56 and $2.54 billion. Beer revenue rose 5% to $2.47 billion while shipments climbed 5.5%, but the company flagged a softening in actual consumer demand.
Beer depletions, a measure of sales from distributors to retailers, declined slightly during the quarter. CEO Nicholas Fink attributed the gap partly to inventory rebuilding but said September depletions "are trending in the right direction" and showed broad-based recovery across channels. The backdrop remains tough. U.S. beer sales fell 1.8% year over year in the two weeks ended September 19, according to Nielsen data.
Constellation owns Modelo Especial, Corona and Pacifico. Fink identified higher fuel costs as a headwind. He pointed to strength in club stores, where cash-strapped shoppers seek deals on fuel and groceries. The company is tailoring product and pack sizes by channel, responding to different purchase occasions.
The maker is shifting its marketing focus. Rather than treating beer as a default purchase, younger consumers increasingly buy for specific moments. Constellation is targeting sports, music and beach activations to drive sales among that cohort. Pricing reflects consumer caution. CFO Garth Hankinson said the company kept price increases at the low end of its usual range, noting it costs less to retain consumers than to regain them.
Hispanic consumers pose particular exposure. About 40% of Constellation's beer spending comes from Hispanic shoppers versus roughly 15% for the overall beer category, company data shows. That cohort faces economic pressures including labor market strain and household finance challenges. Constellation has previously said beer demand weakened in areas with larger Hispanic populations, though it has noted improving trends in some markets.
Constellation is diversifying beyond beer. On Tuesday, it announced a deal to acquire SpikedAde, a spirit-based ready-to-drink beverage brand, for $75 million upfront plus up to $278 million in performance-tied payments. Fink called the category a "long, wide-open runway," citing distributor requests to move into growing segments beyond beer. Sales of spirit-based RTDs grew 16.4% in 2025 to $3.8 billion, making them the spirits industry's fastest-growing category, according to the Distilled Spirits Council of the United States. Fink said beer will remain the company's primary value driver.