Modelo owner Constellation is getting creative to bring back beer drinkers as overall demand weakens — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Constellation Brands beat Q2 expectations with adjusted EPS of $3.74 on $2.63 billion in revenue, ahead of Wall Street estimates of $3.56 and $2.54 billion.
- Beer revenue rose 5% to roughly $2.47 billion and shipments climbed 5.5%, but beer depletions declined slightly — and broader U.S. beer sales fell 1.8% year over year in the two weeks ended September 19, per Nielsen.
- CEO Nicholas Fink said September depletions are "trending in the right direction" with broad-based recovery across channels, and that consumers are increasingly buying beer for specific occasions rather than as a default purchase.
- CFO Garth Hankinson said Constellation is keeping price increases at the low end of its usual range, calling it "much more cost-effective to retain your consumers than it is to try to regain your consumers."
- Constellation is acquiring SpikedAde for $75 million upfront plus up to $278 million in performance payments, entering the fast-growing spirits-based RTD category where sales grew 16.4% in 2025 to $3.8 billion.
- Hispanic consumers account for about 40% of Constellation's beer spending (vs. roughly 15% for the overall beer category), and the company has flagged weaker demand in areas with larger Hispanic populations.
- Roth Capital's Bill Kirk attributed the slowdown to higher fuel costs, noting progress "had been derailed" — though he carries a buy rating with a $209 price target versus a ~$116 share price.
Why it matters: With broader U.S. beer sales down 1.8% and 40% of Constellation's beer revenue tied to price-sensitive Hispanic shoppers, the Modelo and Corona owner is hedging its core by buying into the $3.8 billion spirits-RTD category and holding the line on price to defend share.
Ask SkimNews
