Corona and Modelo brewer Constellation Brands Inc (NYSE:STZ) reported a 2% drop in beer sales during its latest quarter due to reduced consumer spending among Hispanic customers after a step up in US Immigration and Customs Enforcement deportations, along with wider economic concerns.
ICE activity was affecting consumer behaviour, chief executive Bill Newlands said on an earnings call, with Hispanic consumers "not going out to eat as much as they had [and] they're having less social occasions at home."
The company noted that Hispanic consumers account for about half of its US beer sales and Newlands added that "occasions on which beer is consumed have decreased".
Constellation’s earnings and revenue for the quarter ended May 31 were below analyst expectations. The company also cited higher aluminum costs as a factor, following US tariffs.
"When you see a fair amount of change, both Hispanic and non-Hispanic consumers are concerned about inflation and about cost structure," Newlands added.
Despite the weaker performance, Constellation Brands maintained its full-year outlook.