Constellation Brands (STZ) Stock Falls 5% Even After Beating Earnings. Here’s Why

TLDR

• Constellation Brands beat Q2 earnings estimates, but the stock fell 5% in after-hours trading.
• Revenue climbed 6% to $2.63 billion, with beer sales up 5% and wine and spirits up 17%.
• Full-year adjusted EPS guidance of $11.20 to $11.90 came in below Wall Street’s $11.72 estimate.
• The company acquired vodka-based RTD brand SpikedAde for $75 million upfront.
• Wall Street holds a Moderate Buy rating on STZ, with price targets implying 34% upside.

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Constellation Brands (STZ) stock fell 5% in after-hours trading on Tuesday. The drop came even though the beer and spirits maker beat Wall Street’s profit expectations.

Constellation Brands, Inc., STZ

The company posted fiscal second-quarter earnings of $3.74 per share on a comparable basis. That topped the $3.55 to $3.60 range analysts had penciled in.

Revenue for the quarter rose 6% to $2.63 billion, ahead of the $2.54 billion analysts expected. Net profit came in at $565.8 million, up from $466.0 million a year earlier.

Per-share profit climbed to $3.32 from $2.65. On paper, it was a clean beat.

Investors, though, were more focused on what comes next. Constellation’s full-year guidance fell short of what the market wanted to see.

Guidance Falls Short of Expectations

Constellation maintained its fiscal 2027 adjusted EPS outlook of $11.20 to $11.90. The midpoint of $11.55 sits below the analyst consensus of $11.72.

Constellation Brands, $STZ, Q2-27.

A clean beat. Beer gains share while Wine & Spirits turns profitable.

🟢 Revenue: $2.63B vs. $2.57B est.
🟢 Adj. EPS: $3.74 vs. $3.62 est.
🍺 Beer sales: +5%; margin -160 bps
🍷 Wine & Spirits sales: +17% pic.twitter.com/ITIIqygn6R

— EarningsTime (@Earnings_Time) October 6, 2026

Management pointed to softer consumer spending as a headwind. Shoppers are tightening budgets at grocery and liquor stores.

That pressure showed up most in off-premise sales, meaning beer bought in stores rather than bars or restaurants. On-premise sales got a lift from World Cup-related drinking occasions.

Pricing across the business stayed close to flat for the quarter. Volume did most of the work behind the revenue growth.

Beer Still Leads, But Wine and Spirits Grow Faster

Beer remains Constellation’s biggest business. Net sales in that segment rose 5% to $2.47 billion, helped by a 5.5% jump in shipments.

Modelo stayed the top beer brand by dollar sales, and Pacifico climbed into the top 10. Beer operating margin slipped 160 basis points to 39%, as higher marketing and overhead costs outweighed lower tariff expenses.

The wine and spirits business grew faster on a percentage basis. Net sales there rose 17% to $159 million, with depletions up 10.2%.

CEO Nicholas Fink said the portfolio “continued to resonate with consumers.” He credited stronger execution and fresh investment for the market share gains.

Constellation also used earnings day to announce a deal. The company is buying SpikedAde, a vodka-based ready-to-drink brand built around sports drink flavors.

It paid $75 million upfront for full ownership and could pay up to another $278 million over five years if the brand hits performance targets. The company said the deal does not change its fiscal 2027 outlook.

Constellation also pointed to its non-alcoholic Corona as a strong seller with limited marketing spend so far. It called that a sign of more room to grow in the category.

Wall Street’s current view on STZ stock is a Moderate Buy, based on eight Buy, four Hold and one Sell calls over the past three months. The average price target sits at $155.08, implying about 34% upside from current levels.