Corona beer maker Constellation Brands misses quarterly estimates amid tariff woes

Reuters

a day ago

July 1 (Reuters) - Constellation Brands (STZ.N), opens new tab missed first-quarter sales and profit estimates on Tuesday, as fears of rising tariffs and economic uncertainty prompted consumers to reduce purchases of beers and wines.
U.S. alcoholic beverage makers have faced a double blow from the Trump administration's shifting trade policies, a challenge that comes at a time when the industry is already grappling with tepid demand.
Corona beer maker reported net sales of $2.52 billion for the quarter ended May 31, compared with analysts' average estimate of $2.55 billion, according to data compiled by LSEG.
Tariffs on beer imports, along with the inclusion of beer cans under aluminum tariffs, have impacted liquor makers such as Constellation Brands and Molson Coors (TAP.N), opens new tab.
Last month, U.S. President Trump announced plans to double tariffs on imported steel and aluminum to 50% from 25%, intensifying pressure on global steel producers and escalating the trade war.
Meanwhile, Constellation Brands has experienced a significant slowdown in beer consumption, particularly among its Hispanic consumers, following Trump's immigration crackdown.
The company's beer business, its largest revenue contributor, reported a 2.6% decline in quarterly depletion volume — the rate at which products are sold — driven by declines in brands such as Modelo Especial and Corona Extra. Its beer depletions rose 6.4% a year ago.
Sequential price increases and cost management measures were offset by higher expenses, including increased costs from aluminum tariffs and marketing expenditures.
The company's quarterly operating margins at its beer business fell 150 basis points to 39.1%.
Constellation reported comparable profit of $3.22 per share for the quarter, below estimates of $3.31.
Shares of the company, which maintained its annual enterprise organic sales and profit forecast, were marginally lower in extended trading.