Corona and Modelo owner Constellation Brands Inc (NYSE:STZ) reported better-than-expected financial results for the fourth quarter but warned of tariff challenges ahead.
The company posted earnings per share of $2.63, beating estimates of $2.27.
Revenue of $2.16 billion surpassed forecasts of $2.13 billion.
For fiscal 2026, the company projected earnings per share in the range of $12.60 to $12.90, below the expected $13.97.
Overall sales may be flat or slightly negative, beer sales are expected to perform better with a positive growth of 3%.
The company downwardly revised its sales growth outlook to 2% to 4% annually for fiscal 2027 to 2028, compared to estimates of 6% to 8%.
'Super cyle' ending
“The lowered guide hints at the inevitable truth: the law of large numbers is catching up with the business,” analysts at Jefferies wrote.
“The Hispanic growth 'super cycle' and mass distribution expansion story is likely ending, though still more room for gains, with new targets more realistic going forward.”
They added: “There are still questions that need to be answered, but the message on beer was clear – expect growth to slow from here.”
The analysts see the sales of mainstream wine brands for proceeds of $900 million to The Wine Group as a positive development.
“Getting lower-end wine out of the portfolio sets the portfolio up more favorably long term, but the deal is dilutive,” they wrote.
Jefferies repeated its ‘Hold’ rating on Constellation Brands with a $201 price target.
Shares traded hands at $184 in early trade on Thursday.