Depletions declined by 0.6% as off-premise activity around the World Cup came in below industry expectations in June and July. While depletions declined slightly during the quarter, the Company’s Beer Business delivered mid-single-digit net sales and shipment volume growth, underpinned by mid-single-digit growth in points of distribution and continued marketing investment to support the health and equity of the Company’s brand portfolio.

Consistent with prior-year seasonality, the Company shipped slightly more cases than were depleted during the quarter as distributors ordered to rebuild inventory days on hand to healthier levels. The Company spent much of the first half of the year catching up from lower than average inventory levels exiting FY26, and entering the third quarter distributor inventories are now in a healthier position.

The Company’s portfolio of iconic brands continues to resonate in the marketplace, as brand-health and loyalty metrics remain strong and its portfolio’s affinity among Hispanic consumers remains the highest relative to other major beer suppliers in the U.S.

Across Circana U.S. tracked channels, the Company’s Beer Business was the #1 dollar and volume share gainer during the quarter, capturing over 0.8 points of share in the total beer category. This represented an acceleration of more than 0.2 share points versus the prior quarter. The Company had 5 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.

ADDITIONAL SECOND QUARTER FISCAL YEAR 2027 HIGHLIGHTS

• Net sales increased 5% driven by a 5.5% increase in shipment volumes.
• Operating margin decreased 160 basis points to 39.0% as lower tariff expenses and favorable fixed cost absorption were more than offset by increased marketing investment and other selling, general, and administrative spend.
• Depletions decreased 0.6% as declines for Modelo Especial of approximately 2% and Corona Extra of approximately 5% were partially offset by growth from Pacifico, Victoria, and the Modelo Chelada brands of approximately 19%, 15%, and 5%, respectively. One additional sell day during the quarter was largely offset by a shift in the timing of the Labor Day holiday, resulting in minimal impact on underlying depletion trends.
• The Company’s Beer Business ranked as the #1 dollar and volume share gainer in Circana U.S. tracked channels and had 5 of the top-15 dollar share gaining brands across the entire U.S. beer category:

• • Modelo Especial maintained its position as the #1 brand by dollar sales and was the #3 dollar share gainer. Within the brand family, Modelo Chelada Limón y Sal was the #6 dollar share gainer;
• • Corona Extra remained a top-five brand by dollar sales, while Corona Familiar was the #14 dollar share gainer;
• • Pacifico and Victoria were the #2 and #10 dollar share gainers, respectively, and Pacifico became a top-10 brand by dollar sales.