EARNINGS RECAP: CONSTELLATION BRANDS FISCAL YEAR AND FOURTH QUARTER 2026
April 8, 2026
- Continues to Deliver Leading Share Gains in Beer Category Across U.S. Tracked Channels
- Returns Over $1.6B to Shareholders Including Over $900M in Share Repurchases During Fiscal 2026
- Issues Updated Outlook for Fiscal 2027 and Withdraws Fiscal 2028 Outlook
To access the full earnings release and CEO and CFO commentary, click here.
| Row Labels | Net Sales (1) |
Organic Net Sales |
Operating Income (Loss)(1) |
Net Income (Loss) Attributable to CBI | Adjusted EBIT | EPS | ||
|---|---|---|---|---|---|---|---|---|
| Fiscal Year 2026 Financial Highlights (1) | In millions, except per share data | ||||||||
| Reported | $9,139 | $9,139 | $2,721 | $1,687 | $2,730 | $9.61 | ||
| % Change | (10%) | (10%) | 667% | 2,172% | 731% | 2,236% | ||
| Comparable | $9,139 | $9,139 | $2,943 | $2,075 | $2,962 | $11.82 | ||
| % Change | (10%) | (4%) | (9%) | (17%) | (15%) | (14%) | ||
| Row Labels | Net Sales (1) |
Organic Net Sales |
Operating Income (Loss)(1) |
Net Income (Loss) Attributable to CBI | Adjusted EBIT | EPS | ||
|---|---|---|---|---|---|---|---|---|
| Fourth Quarter Fiscal Year 2026 Financial Highlights(1) | In millions, except per share data | ||||||||
| Reported | $1,920 | $1,920 | $442 | $202 | $434 | $1.16 | ||
| % Change | (11%) | (11%) | 394% | 154% | 279% | 156% | ||
| Comparable | $1,920 | $1,920 | $508 | $330 | $501 | $1.90 | ||
| % Change | (11%) | 0% | (9%) | (30%) | (24%) | (28%) | ||
Note: A list of defined terms, including definitions of reported, comparable, adjusted, and organic as well as reconciliations of non-GAAP financial measures, are contained in the earnings release. Comparable, adjusted, and organic amounts are non-GAAP financial measures.
(1)Year ended and three months ended February 28, 2025, includes (i) $711.2 million and $252.1 million of net sales, respectively, and (ii) $244.7 million and $98.4 million of CAM, respectively, that are no longer part of the Wine & Spirits segment results due to the Wine & Spirits Divestitures.
(1)Year ended and three months ended February 28, 2025, includes (i) $711.2 million and $252.1 million of net sales, respectively, and (ii) $244.7 million and $98.4 million of CAM, respectively, that are no longer part of the Wine & Spirits segment results due to the Wine & Spirits Divestitures.
overarching highlights - fiscal year 2026
During fiscal 2026, the company’s teams demonstrated strong execution and resilience while operating in a dynamic and evolving consumer environment. U.S. consumers, particularly those within lower-income households, continued to face financial pressures from the cumulative effects of inflation, along with ongoing broader economic uncertainty and additional headwinds from other socioeconomic factors. As a result, spending behavior across beverage alcohol categories became more deliberate, with consumers increasingly seeking value and exhibiting greater selectivity in their purchases. Despite these pressures, consumers remained engaged with the category, often trading within portfolios and seeking value through pack sizes and price points rather than exiting the category altogether. Overall demand across beer, wine, and spirits however remained subdued during much of the year.
In this environment, the company remained focused on executing against its strategic priorities, including expanding distribution in both off-premise and on-premise channels, investing behind its iconic portfolio of brands to deepen consumer affinity, and driving operational efficiencies to support profitability and cash flow. By maintaining a disciplined focus on factors within the company’s control and delivering best-in-class execution in a dynamic environment, the company continued to position its business to outperform the broader market and gain share.
From an Enterprise standpoint, the company generated $1.8 billion in free cash flow during the fiscal year. In line with its capital allocation priorities, the company remained at its target comparable net leverage ratio of ~3.0x, maintained its ~30% dividend payout ratio, and returned over $900 million to shareholders through share repurchases. Subsequent to the end of the fiscal year, the company executed an additional $75 million in share repurchases during the month of March.
In this environment, the company remained focused on executing against its strategic priorities, including expanding distribution in both off-premise and on-premise channels, investing behind its iconic portfolio of brands to deepen consumer affinity, and driving operational efficiencies to support profitability and cash flow. By maintaining a disciplined focus on factors within the company’s control and delivering best-in-class execution in a dynamic environment, the company continued to position its business to outperform the broader market and gain share.
From an Enterprise standpoint, the company generated $1.8 billion in free cash flow during the fiscal year. In line with its capital allocation priorities, the company remained at its target comparable net leverage ratio of ~3.0x, maintained its ~30% dividend payout ratio, and returned over $900 million to shareholders through share repurchases. Subsequent to the end of the fiscal year, the company executed an additional $75 million in share repurchases during the month of March.
FISCAL YEAR 2026 HIGHLIGHTS
“Despite the dynamic operating environment in fiscal 2026, we remained focused on the factors within our control and executed with discipline. That execution enabled our Beer Business to continue to be the #1 dollar share gainer across U.S. tracked channels, and our remaining portfolio in our Wine & Spirits Business to deliver depletion growth during the year. As we look ahead to fiscal 2027, we expect consumers will continue to navigate a shifting macroeconomic environment, but we remain encouraged by the momentum we saw in the fourth quarter. Our strategic priorities continue to be clear, and our best‑in‑class organization is energized and committed to delivering solid results.”
Bill Newlands - President and Chief Executive Officer
“In fiscal 2026 we exceeded our free cash flow expectations and deployed that cash in line with our capital allocation priorities. We maintained our investment grade rating, held comparable net leverage at our ~3.0x target, returned more than $1.6 billion to shareholders through our dividend and share repurchase program, and continued to invest in modular brewing capacity to support future growth in our Beer Business. As we enter fiscal 2027, we remain committed to our disciplined and balanced capital allocation approach that strengthens the business for the long-term and delivers continued returns to shareholders.”
Garth Hankinson - Executive Vice President and Chief Financial Officer
Beer business
| Row Labels | Shipments | Depletions | Net Sales |
Operating Income (Loss) | |
|---|---|---|---|---|---|
| Years Ended | In millions; branded product, 24-pack, 12-ounce case equivalents | |||||
| February 28, 2026 | 415.4 | - | $8,315.2 | $3,161.0 | |
| February 28, 2025 | 431.8 | - | $8,539.8 | $3,394.4 | |
| % Change | (3.8%) | (2.1%) | (3%) | (7%) | |
| Row Labels | Shipments | Depletions | Net Sales |
Operating Income (Loss) | |
|---|---|---|---|---|---|
| Three Months Ended | In millions; branded product, 24-pack, 12-ounce case equivalents | |||||
| February 28, 2026 | 86.3 | - | $1,726.0 | $572.5 | |
| February 28, 2025 | 85.4 | - | $1,704.4 | $623.8 | |
| % Change | 1.1% | 0.6% | 1% | (8%) | |
BEER HIGHLIGHTS - FISCAL YEAR 2026
During the year, the company’s Beer Business was the leading dollar share gainer in the beer category across Circana U.S. tracked channels, capturing 0.4 points of share, and continued to be the #1 high-end beer supplier in the U.S. by dollar sales. The company had 4 of the top 15 dollar share gaining brands across the total beer category,
and Modelo Especial maintained its position as the #1 brand by dollar sales across the entire U.S. beer category. While depletions and net sales declined during fiscal year 2026 amid a subdued consumer backdrop, most notably within the Hispanic consumer cohort, trends improved during the fourth quarter as depletions and net sales grew 0.6% and 1.3%, respectively, reflecting strengthened portfolio momentum.
ADDITIONAL FISCAL 2026 HIGHLIGHTS
ADDITIONAL FISCAL 2026 HIGHLIGHTS
- Net sales decreased by 3% driven by shipment declines of 3.8%, partially offset by favorable pricing net of mix.
- Depletions declined 2.1% largely driven by decreases in Modelo Especial, Corona Extra, and the Modelo Chelada brands of approximately 3%, 7%, and 1%, respectively, partially offset by strong depletion growth from Pacifico and Victoria of over 15% and 16%, respectively.
- Operating margin decreased 170 basis points to 38.0% driven by a decline in shipment volumes, as well as higher cost of product sold due to aluminum tariffs and unfavorable fixed cost absorption, partially offset by favorable pricing net of mix.
- Beer Business ranked as the #1 dollar share gainer in Circana U.S. tracked channels, gaining 0.4 share points, and had 4 of the top 15 dollar share gaining brands across the U.S. beer category, and Modelo Especial maintained its position as the #1 brand by dollar sales as it continued to gain share.
BEER HIGHLIGHTS - FOURTH QUARTER FISCAL YEAR 2026
The company’s beer business had 6 of the top 15 dollar share gaining brands across the total beer category and continued to be the #1 high-end beer supplier in the U.S. by dollar sales. While trends at retailers located in zip codes with larger Hispanic populations continued to weigh on overall portfolio performance, the impact moderated during the quarter as the rate of decline in those areas improved, while more general market zip codes continued to outperform on a relative basis.
ADDITIONAL FOURTH QUARTER FISCAL 2026 HIGHLIGHTS
ADDITIONAL FOURTH QUARTER FISCAL 2026 HIGHLIGHTS
- Net sales increased by over 1% driven by shipment growth of 1.1% and favorable pricing, partially offset by unfavorable mix
- Depletions grew 0.6% as declines from Modelo Especial of just under 1% and Corona Extra of approximately 6% were more than offset by growth from Pacifico, Victoria, and the Modelo Chelada brands of approximately 21%, 17%, and 5%, respectively.
- Operating margin decreased 340 basis points to 33.2% as favorability in net sales was more than offset by increased cost of product sold due to unfavorable fixed cost absorption, increased depreciation, and aluminum tariffs.
- Beer Business ranked as the #1 dollar share gainer in Circana U.S. tracked channels, gaining 0.6 share points, and had 6 of the top 15 dollar share gaining brands across the U.S. beer category including Pacifico at #2, Modelo Especial at #4, Corona Sunbrew at #7, Corona Familiar at #10, Victoria at #12, and Modelo Chelada Limón y Sal at #13.
WINE AND SPIRITS BUSINESS
| Row Labels | Shipments |
Organic Shipments (2) | Depletions (2) | Net Sales (1) |
Organic Net Sales |
Operating Income (Loss) (1) | |
|---|---|---|---|---|---|---|---|
| Years Ended | In millions; branded product, 9-liter case equivalents | |||||||
| February 28, 2026 | 8.3 | 8.3 | - | $823.8 | $823.8 | $10.5 | |
| February 28, 2025 | 22.1 | 8.9 | - | $1,668.9 | $957.7 | $325.1 | |
| % Change | (62.4%) | (6.7%) | (4.3%) | (51%) | (14%) | (97%) | |
| Row Labels | Shipments |
Organic Shipments (2) | Depletions (2) | Net Sales (1) |
Organic Net Sales |
Operating Income (Loss) (1) | |
|---|---|---|---|---|---|---|---|
| Three Months Ended | In millions; branded product, 9-liter case equivalents | |||||||
| February 28, 2026 | 1.6 | 1.6 | - | $194.2 | $194.2 | $2.6 | |
| February 28, 2025 | 5.9 | 1.5 | - | $459.8 | $207.7 | $99.7 | |
| % Change | (72.9%) | 6.7% | 8.3% | (58%) | (6%) | (97%) | |
(2)Year ended and three months ended February 28, 2025, includes adjustments to remove volumes associated with the Wine & Spirits Divestitures.
WINe and spirits highlights - FISCAL YEAR 2026
During fiscal year 2026 the company’s Wine & Spirits Business continued to outperform the total wine category in both dollar and volume sales growth across Circana U.S. tracked channels. Moreover, despite increasing category headwinds, the company’s remaining portfolio following the closing of the 2025 Wine Divestitures delivered approximately 3% depletion growth in fiscal year 2026, supported by strong trends for Kim Crawford and Mi CAMPO tequila.
ADDITIONAL FISCAL 2026 HIGHLIGHTS
ADDITIONAL FISCAL 2026 HIGHLIGHTS
- Net sales declined 51% driven by a 62.4% decrease in shipment volumes reflecting the impacts of the Wine & Spirits Divestitures, unfavorable mix, changes in distributor contractual obligations, and strategic pricing actions taken on select brands.
- Operating margin decreased from 19.5% to 1.3% primarily reflecting the unfavorable impacts from net sales and higher cost of goods sold, partially offset by favorability in marketing and other selling, general, and administrative expenses.
WINe and spirits highlights - FOURTH QUARTER FISCAL YEAR 2026
During the fourth quarter, the company’s Wine & Spirits portfolio continued to outperform the total wine category in both dollar sales and volume performance in Circana U.S. tracked channels.
ADDITIONAL FOURTH QUARTER FISCAL 2026 HIGHLIGHTS
To access the full earnings release and CEO and CFO commentary, click here.
This article contains non-GAAP financial measures. These and other non-GAAP financial measures, the purposes for which management uses them, why management believes they are useful to investors, and reconciliations to the most directly comparable GAAP financial measures may be found in the earnings release and at ir.cbrands.com under the Financial Info/Financial History (Non-GAAP) section. All references to profit measures and earnings per share on a comparable basis exclude items that affect comparability.
Please see “Forward-Looking Statements” in the earnings release for a discussion of certain of the uncertainties, risks, and assumptions associated with forward-looking statements in the article.
ADDITIONAL FOURTH QUARTER FISCAL 2026 HIGHLIGHTS
- Net sales declined 58% driven by a 72.9% decrease in shipment volumes reflecting the impacts of the Wine & Spirits Divestitures, changes in distributor contractual obligations, and strategic pricing actions taken on select brands.
- Operating margin decreased from 21.7% to 1.3% primarily reflecting the unfavorable impacts from net sales, partially offset by favorability in marketing and other selling, general, and administrative expenses.
To access the full earnings release and CEO and CFO commentary, click here.
This article contains non-GAAP financial measures. These and other non-GAAP financial measures, the purposes for which management uses them, why management believes they are useful to investors, and reconciliations to the most directly comparable GAAP financial measures may be found in the earnings release and at ir.cbrands.com under the Financial Info/Financial History (Non-GAAP) section. All references to profit measures and earnings per share on a comparable basis exclude items that affect comparability.
Please see “Forward-Looking Statements” in the earnings release for a discussion of certain of the uncertainties, risks, and assumptions associated with forward-looking statements in the article.