Constellation Brands, the beer and spirits giant behind Corona and Modelo, posted disappointing quarterly results Tuesday that underscored mounting pressure from U.S. tariffs and weakening consumer demand. The company missed Wall Street expectations on both revenue and earnings, with sales falling 5.5% year-over-year to $2.52 billion and adjusted earnings per share of $3.22 coming in below the $3.29 analyst consensus.
The earnings miss marks the latest challenge for a company grappling with a 25% tariff on imported beer and aluminum cans imposed by the Trump administration in April, which analysts estimate could cost Constellation up to $1 billion annually. The stock has lost nearly a quarter of its value in 2025 through Tuesday's close.
Over 99% of Constellation's beer volume originates from Mexico, where the company operates breweries producing its flagship Corona, Modelo, and Pacifico brands1. The April tariffs specifically target aluminum packaging, a critical component for the company's canned beer products, which represent 40% of its beer sales2.
"We continued to face softer consumer demand largely driven by what we believe to be non-structural socioeconomic factors," CEO Bill Newlands said during the earnings call3. The company has already revised its medium-term growth projections down to 2% to 4% from a previous forecast of 6% to 8%4.
Despite the challenging quarter, Constellation maintained its full-year earnings estimate of $12.60 to $12.90 per share, with Wall Street analysts calling for $12.84 near the higher end of that range1. The company's adjusted EBITDA of $829.7 million missed analyst estimates of $950.5 million by 12.7%2.
Beer sales, which account for 78% of the company's total net revenue, are expected to remain relatively flat in fiscal 20263. Operating margins declined to 28.4% from 35.4% in the same quarter last year, though free cash flow margins improved to 17.7% from 11.8%2.
The results come amid what industry analysts describe as a "subdued but opportunity-rich" environment for beverage alcohol companies in 20251. Persistent inflation and varying consumer confidence levels have pressured purchasing power in mature markets like the U.S., while moderation strategies among drinkers have become increasingly mainstream across all demographics1.
Constellation shares slid less than 1% in extended trading Tuesday2.
