---
title: "Constellation Brands Reports Better-Than-Expected Earnings and Revenue in Fiscal Second Quarter"
url: https://noti.group/constellation-brands-reports-better-than-expected-earnings/
language: en
publisher: "Noti Group"
section: "Business"
published: 2026-10-07T18:28:27.000Z
updated: 2026-10-07T19:24:29.770Z
id: 6d169b15-a722-4897-97d9-2d70c6d75e1a
source: "CNBC https://www.cnbc.com/2026/10/07/constellation-brands-earnings-beer-demand.html"
attribution: "Link to https://noti.group/constellation-brands-reports-better-than-expected-earnings/ and name Noti Group when you quote or summarize this story."
---

# Constellation Brands Reports Better-Than-Expected Earnings and Revenue in Fiscal Second Quarter

The company's beer revenue rose 5% to $2.47 billion during the period, driven by market share gains.

Constellation Brands, the parent company of Modelo Especial and Corona beers, has reported better-than-expected earnings and revenue for its fiscal second quarter, despite a challenging market environment.

The company's beer brands gained market share during the period, with beer revenue rising 5% to $2.47 billion, while shipments increased by 5.5%. However, depletions - a measure of sales from distributors to retailers and other customers - declined slightly, indicating softer consumer demand than shipment levels suggest.

To mitigate the impact of high food and fuel prices on consumers, Constellation is focusing on special occasions and diversification to drive sales. This strategy involves targeting specific events and holidays where beer consumption tends to be higher, as well as expanding its product offerings beyond traditional beers.

The overall market for beer remains uncertain, with U.S. beer sales falling 1.8% year over year in the two weeks leading up to September 19, according to Nielsen data.

Constellation's September beer depletions showed improvement, bucking the trend of declining demand in the run-up to Labor Day. The company reported a broad-based recovery across various channels, indicating that consumers are engaging with the category as a whole.

Analysts attribute Constellation's performance issues to elevated gas prices, which have dampened overall demand for beer. Roth Capital analyst Bill Kirk noted that higher fuel costs had derailed the company's progress, despite it still delivering against its fiscal 2027 plan. He maintains a buy rating and price target of $209 per share.

Constellation is benefiting from consumers seeking deals on essentials like groceries and fuel, with club stores experiencing particular strength. The company is adapting to this shift by tailoring its product offerings and pack sizes across different channels, recognizing that consumer choices vary depending on the shopping occasion.

To capitalize on these trends, Constellation is focusing on event-driven sales, particularly among younger drinkers who are increasingly buying beer for specific moments rather than as a default purchase. The company is leveraging sports, music, beach activations, and other occasions to drive sales and connect with consumers in meaningful ways.

Constellation's pricing strategy is being influenced by consumer caution around spending, as evidenced by its selective approach to price increases. The company has been careful not to raise prices too high, keeping them within a relatively narrow range that takes into account the current economic climate and its impact on consumers.

The CFO, Garth Hankinson, noted that it's more cost-effective for Constellation to retain existing customers rather than trying to win back those who have left. This approach is particularly important given the company's reliance on Hispanic shoppers, who make up a significant portion of its customer base.

A notable 40% of spending on Constellation's beer comes from Hispanic consumers, compared to around 15% for the overall beer category. This demographic has faced economic pressures due in part to labor market and household finance concerns, which have been exacerbated by certain policies.

Constellation is expanding beyond its core beer business through a significant acquisition. The company will purchase SpikedAde, a spirit-based ready-to-drink beverage brand, for $75 million upfront, with up to an additional $278 million in potential payments tied to future performance.

The acquisition of Stateside Vodka by Constellation is a strategic move to tap into the growing demand for ready-to-drink (RTD) beverages. This segment has been gaining popularity among consumers, and distributors have been urging Constellation to expand its offerings beyond beer.

Analysts are also optimistic about the deal, with some viewing it as an attractive opportunity for Constellation. Michael Lavery of Piper Sandler noted that the acquisition provides exposure to a fast-growing category, while also highlighting the success of Stateside Vodka's competing Super Lyte brand on the East Coast.

Despite its focus on beer, Constellation sees potential in SpikedAde, which is being acquired as part of the deal. The company views this new segment as a "long, wide-open runway" for its brand-building and distribution capabilities.

The growth in RTD sales has been significant, with premixed cocktails including spirits-based RTDs increasing by 16.4% to $3.8 billion in 2025, according to the Distilled Spirits Council of the United States. This makes it the strongest growth category in the spirits industry.

---
Source: [CNBC](https://www.cnbc.com/2026/10/07/constellation-brands-earnings-beer-demand.html)  
Published by Noti Group: https://noti.group/constellation-brands-reports-better-than-expected-earnings/