- Sales in three months to end of May decline 4% to US$2.52bn
- Beer business down in fiscal first quarter by 2% at $2.23bn
- Combined wine and spirits operations continue to decrease in size; sales slump 21%
Constellation Brands has blamed what it described as “non-structural socioeconomic factors” for pulling the first quarter of its current financial year into negative territory.
Three months on from booking a 2% sales increase in fiscal 2025, the multi-category group said yesterday that sales in the quarter to the end of May came in down by 4% on the corresponding period a year ago. The fall represented Constellation’s worst three-month performance since Q4 (December-February) of fiscal 2023.
The company’s beer sales, which occur only in the US, dipped in sales value by 2% on a 3.3% decline in volumes, “reflecting socioeconomic headwinds affecting consumer demand”. Citing Circana as its data source, Constellation said that Modelo Especial “maintained its position as the number one brand in dollar sales and continued to gain share”, while Corona Extra held its own in the top five, again by value.
The internal dominance of the company’s beer business grew larger in Q1 following the sale of the Svedka vodka brand to Sazerac Co in December. Indeed, the combined wine & spirits operations – down 21% in value during the three months – will be even smaller moving forward following the completion last month of the divestment of a raft of wine brands to The Wine Group.
“While we continued to face softer consumer demand largely driven by what we believe to be non-structural socioeconomic factors, our teams remain focused on executing the key initiatives that underpinned the outlook we recently provided for fiscals 2026 to 2028,” said CEO Bill Newlands. “Against that backdrop, we are pleased to continue to lead the US beer industry in dollar share gains [and] to have fully repositioned our wine & spirits portfolio in higher-growth and higher-margin segments.”
For the full 12 months to end February next year, the company expects its total sales to come in at between -2% and +1% on fiscal 2025; beer sales will be at worst flat and at best +3%, according to forecasts shared with this week’s figures.
