STZ - F1Q27 Earnings Preview

Research evidence excerpt

STZ - F1Q27 Earnings Preview

Barclays | Constellation Brands

F1Q27 Earnings Preview

STZ's F4Q print in mid-April proved to be a high water mark for the stock YTD, with shares giving

back most of their 2026 gains in the subsequent two months. This move coincides with

softening overall beer category trends, as the industry decelerated back to -MSD volume

declines on average over STZ's F1Q (through May) after having narrowed the losses to -LSD on

average at the end of CY25 and into CY26. Recall, there had been growing enthusiasm for STZ

early in CY26 on easy comps and World Cup - even prompting some to question the degree to

which STZ's FY27 guidance issued in April might be conservative - but some growing signs of low

income consumer pressure seem to be weighing more on the beer category (among others) in

recent weeks, and we continue to view the company's outlook as reasonable. It remains to be

seen how much of an uplift to beer consumption could materialize from the World Cup (a topic

our Thematic Investing colleagues recently explored at a higher level in World Cup 2026:

Viewership drives value, 06/05/26), but as a reminder STZ does not embed any specific boost

from the tournament in its guide.

In light of the softening trends that emerged over April/May for the industry, we're tempering

our F1H beer estimates. More specifically, we now look for a ~1.5-point deceleration QoQ in beer

depletion trends (to -1% in F1Q vs. +1% previously) and we lower our F1Q shipments a

commensurate amount (to +1% from +3% previously). We temper our F2Q volume outlook by

~125 bps (to +0.75% depletions including one extra selling day and +2.25% shipments). Our

price/mix estimates are unchanged throughout the year. All in, we model beer OSG of +1.1% in

F1Q and +1.3% for FY27 (vs.