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Tariffs Hit Hard: Constellation Brands Faces $20M Blow
Constellation Brands (NYSE:STZ) is bracing for a $20 million hit over the next three quarters, driven by aluminum tariffs tied to President Trump's 50% duty on imported cans. The added cost won't show up in Q1 results, which ended May 31, but CFO Garth Hankinson confirmed it'll start chipping away at margins starting this quarterabout 20 basis points, to be exact. Since most of the company's beer is packaged in aluminum, and not exempt like other alcohol imports from Mexico, the financial impact looks tough to fully offset. Warning! GuruFocus has detected 3 Warning Sign with STZ. The tariff pain comes at a time when beer demand isn't doing any favors either. CEO Bill Newlands told investors that while overall interest in beer hasn't faded, the number of social occasions where people actually drink it hasboth at restaurants and at home. That shift, paired with rising input costs, could pressure the company's largest earnings engine: its beer business. It's a double-whammy of softer volumes and higher costs, which could make profitability a lot harder to defend going forward. And yet, investors didn't flinch. Shares climbed 4.7% at 12.59pm, trimming the year's losses to around 33%. The move suggests the market may have already priced in the bad newsor is betting management can absorb the blow without derailing the broader strategy. But with margins thinning and demand dynamics evolving, this could be a space to watch closely in the second half of the fiscal year. This article first appeared on GuruFocus.


The Verge
10 minutes ago
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xAI gets permission to pollute.
xAI gets permission to pollute. Elon Musk's AI company has been granted a permit for 15 natural gas turbines to power a Memphis data center , along with limits on their emissions, which include smog-forming nitrogen oxides and carbon monoxide. The company has been accused of running the generators without permits for almost a year, and the Southern Environmental Law Center claims there are many more than that — raising the question of whether xAI will really stop at 15 now.
Yahoo
13 minutes ago
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Audi's U.S. Meltdown: 6 Straight Quarters of Decline--But a Radical Pivot May Be Coming
Audi, the premium brand under Volkswagen (VWAGY), just posted its sixth consecutive quarterly sales drop in the U.S.a 19% decline in Q2 deliveries, with the top-selling Q5 SUV falling off a cliff at -29%. And yet, in a surprising move, Audi isn't raising prices in July. Instead, it's eating the margin pressure, likely to avoid losing even more ground in a market that's becoming increasingly brutal for German automakers. Warning! GuruFocus has detected 4 Warning Sign with VWAGY. The pain isn't just cyclicalit's structural. Audi, like Porsche, still doesn't build any cars in the U.S. Its models are imported from Europe and Mexico, leaving them vulnerable to tariffsa legacy of Trump-era trade policy that continues to bite. And with Chinese EV giants like BYD (BYDDF) undercutting prices in their home market and stealing market share, Audi now finds itself squeezed on both ends: fading in China and flailing in the U.S. That might explain why Audi's CFO Jurgen Rittersberger is finally signaling a shift. In May, the company said it would pick a U.S. production site this year, and it's reportedly exploring synergies with VW's Scout brand and the existing Tennessee plant. If Audi pulls the trigger, it could be a long-overdue hedge against trade riskand possibly a lifeline in what's shaping up to be a make-or-break U.S. strategy. This article first appeared on GuruFocus.