Why Constellation Brands Stock Pulled Back Today

Key Points

• Constellation Brands slashed its full-year guidance at the halfway point of its fiscal year.

• The company is seeing challenges in the beer industry, noting lower consumption from Hispanics.

• The immigration crackdown seems to be adding to the company’s problems.

• 10 stocks we like better than Constellation Brands ›

Shares of Constellation Brands (NYSE: STZ), the diversified alcohol company best known for selling Corona and Modelo beer in the U.S., were moving lower today after management slashed its full-year guidance in an early update.

As a result, the stock was down 6.7% as of 1:28 p.m. ET on Tuesday.

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Image source: Getty Images.

Constellation feels the immigration crackdown

In a press release this morning, the company slashed its adjusted earnings-per-share (EPS) forecast for the year from a range of $12.60 to $12.90, to a range of $11.30 to $11.60. It now sees organic net sales down anywhere from 4% to 6%, compared to a forecast of a 2% decline to a 1% gain, due to weakness in the beer category, which makes up the bulk of the business. The company’s fiscal year ends on Feb. 28, 2026.

CEO Bill Newlands said, “We continue to navigate a challenging macroeconomic environment that has dampened consumer demand and led to more volatile consumer purchasing behavior since our first quarter of fiscal 2026.”

He also noted that “high-end beer buy rates decelerated sequentially,” especially for Hispanic consumers, which seemed to be a consequence of the immigration crackdown.

Nonetheless, the company said it continued to gain market share, showing it’s outperforming its peers.

What’s next for Constellation Brands

Constellation and its peers are already struggling with a number of headwinds in the alcohol sector as young people are drinking less, tariffs are weighing on global sales, and craft brewers continue to challenge the major brewers.

The stock surged over a multiyear period a decade ago after it secured the rights to sell the Mexican brands Corona and Modelo (the latter being the top-selling beer in the U.S.) from what was then Anheuser-Busch, but it’s struggled since then. The guidance cut and challenges in the beer industry show investors shouldn’t expect a quick turnaround, even if the stock has attracted backing from Warren Buffett’s Berkshire Hathaway, possibly a sign Buffett believes it offers good value.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Constellation Brands. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.