Constellation Brands lowers margin forecast, shares fall
Constellation Brands Inc. lowered its annual operating margin forecast to between 31% and 32% from 32% to 33% and its shares fell nearly 5% to $110.11 premarket. The Corona beer maker beat Q2 estimates for profit and sales on Tuesday, citing resilient demand for its beer.
Constellation Brands said it now expects annual operating margin to be between 31% and 32%, down from a prior forecast of 32% to 33%. 11 in premarket trading after the update. The company said on Tuesday it beat second-quarter profit and sales estimates, helped by resilient demand for beers including Modelo Especial and Victoria, which helped offset challenges facing the alcohol industry in a soft spending environment. P.
Morgan said F2Q27 profit and loss (P&L) was mostly as anticipated, and that attention is likely to shift to management's outlook for beer top-line and operating margins in F2H27 and the implications for FY28. Constellation said it will pay $75 mln at closing for SpikedAde, a vodka-based ready-to-drink (RTD) brand, plus up to $278 mln over five years tied to the brand's performance and capital-allocation priorities. P. Morgan said the SpikedAde acquisition could be interesting, although the brand and category are nascent.
Up to the previous day's close, the stock had fallen 16% year to date.