Despite reporting a double miss after the closing bell on Tuesday, the stock rallied following its latest earnings release. This marks the 2nd straight quarter of positive post-earnings price action.
They're continuing to deliver consistent growth, strong margins, and solid free cash flow.
This is a rare combination in a defensive sector facing pressure from inflation, shifting consumer preferences, and private-label competition.
While many of its peers are getting punished for lackluster results, the market is rewarding Constellation for reporting a double miss.
Beer remains the crown jewel of their portfolio, led by Modelo, now the #1 beer in America.
Meanwhile, the premiumization of the wine and spirits business is helping improve margins and reposition the segment for long-term growth.
Management continues to reward shareholders through dividends, with a dividend payout ratio of 30%.
In a challenging tape for staples, Constellation Brands is proving it’s not just another name in the pack.
It’s a leader in the brewing industry.
Here are the latest earnings stats for STZ 👇
*Click the image to enlarge it
Constellation Brands had a +2.68 reaction score after reporting a double miss.
The company reported revenues of $2.52B, versus the expected $2.55B, and earnings per share of $3.22, versus the expected $3.30.
Now let's dive into the data and talk about what happened with this report 👇
STZ has been rewarded for 2 consecutive earnings reports 🔥
Constellation Brands rallied 4.5% after this earnings report, and here's why:
They reported free cash flow of $444M, a 41% year-over-year increase.
The beer segment is continuing to outperform. They were the #1 dollar share gainer in the beer category, with 6 of the top 15 dollar share-gaining brands.
In addition to the solid quarter, the management team reaffirmed its fiscal 2026 EPS outlook of $12.60-$12.90 and operating cash flow target of $2.7-$2.8B.
Since peaking last year, this has been one of the hottest messes in the S&P 500.
It's in a nearly 40% drawdown while the broader market is making new all-time highs.
Coming into the report, the market's expectations were very low.
All the company had to do was report a decent quarter to spark a rally off a major shelf of former lows.
And that's precisely what happened...
Now, the price is reclaiming the VWAP anchored to the May 16 key reversal day. This is a clear indication of the bulls reclaiming control of the short-term trend.
If STZ is above 171.50, the path of least resistance is sideways to higher for the foreseeable future.
Thank you for reading.
- The Beat Report Team
P.S.: Jeff Macke has been studying retail for over 30 years and is still on the cutting edge.
Every week, he shares exactly what he’s seeing in the sector, what he’s buying and selling, and what the market’s saying about the consumer.
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