Constellation Brands stock up 12% YTD ahead of earnings
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- Constellation Brands (STZ) shares are up 11.7% YTD but down 10.8% over the past 12 months, compared with a 3.7% YTD decline and 30.2% 12-month rally for the S&P 500, as investors position for a potential turnaround
- Analysts polled by FactSet expect Constellation to report Q4 adjusted EPS of $1.71 (down from $2.63 a year ago) on net sales of $1.88 billion — a 13% YoY decline — though beer business sales are expected to rise 1.7% to $1.73 billion
- Nicholas Fink was appointed by Constellation's board in February to succeed Bill Newlands as CEO effective April 13, with analysts saying the change signals little shift in strategy
- JPMorgan analysts cited the Olympics, the World Cup, and the U.S. 250th anniversary — along with bigger tax refunds — as potential catalysts for increased beer drinking this year
- Roth analyst Bill Kirk said alcohol receipts at Texas bars, breweries, and restaurants were up 4.1% YoY in Constellation's Q4, using the state as a gauge for Hispanic consumer demand, and noted depletion trends improved from December through February into March
- Constellation executives said last year that Hispanic consumers, who account for roughly half of its beer business, were gathering less frequently amid concerns about President Trump's aggressive deportation campaign and ICE raids
Why it matters: Constellation's 11.7% YTD stock gain — set against a 3.7% decline in the S&P 500 — hinges on whether the beer business, expected to grow 1.7% to $1.73 billion, can validate a turnaround narrative. With a new CEO taking over April 13 and Hispanic consumer habits being closely watched, the Q4 report will test whether the World Cup and tax refund tailwinds can offset broader pressures from GLP-1 use, rising bar costs, and a still-cautious consumer.
