Constellation Sales Slip 2% In Latest Quarter, Wine And Spirits Depletions Flat

Constellation Brands posted organic net sales down 2% on a comparable basis to $2.2 billion for its fiscal third quarter ended in November, with the company noting a “continued challenging operating environment.” Despite the headwinds, Constellation said both its beer unit and wine and spirits business have outpaced their respective markets recently, and comparable operating income for the three-month period came in flat at $739 million.

“The operating environment during the third quarter of fiscal 2026 remained challenged, which was in line with our expectations and relatively consistent with the prior quarter,” noted Constellation president and CEO Bill Newlands. “Our beer business delivered dollar and volume share gains in tracked channels and gained incremental distribution points, while our wine and spirit business continued to outperform the U.S. wine industry.”

Constellation’s beer sales for the quarter dipped 1% to $2 billion, with depletions declining by 3% owing to 4% and 9% decreases for Modelo Especial and Corona Extra respectively, partially offset by 15% and 13% gains for Pacifico and Victoria respectively. Along with the latter two brews, innovations Corona Sunbrew and Corona Familiar have also made solid progress, the company added.

Constellation is now extending leading label Modelo with its first non-alcohol offering, Modelo Chelada Limón y Sal Non-Alcoholic. Within cheladas, the low- and non-alcohol segment is forecasted to expand 50% over the next 24 months, the company noted, citing Circana data. Constellation also counts Corona Extra Non-Alcoholic in its non-alc stable.

On the wine and spirits side, Constellation saw flat shipments of 1.5 million cases for the quarter, with organic net sales down 7% to $213 million. Depletions held steady for the unit, which has been reshaped and premiumized through the divestitures of Svedka vodka to Sazerac and several wine brands to The Wine Group over the past year.

While operating margin decreased more than six points to 15.8% in the wine and spirits business on the divestitures as well as higher costs, changes to distributor contracts, and “strategic pricing actions taken on select brands,” Constellation noted that the portfolio “delivered flat U.S. depletions and outpaced the corresponding higher-end wine segment in both dollar and volume sales performance” in Circana channels during the quarter. From a brand standpoint, Kim Crawford, The Prisoner, and Harvey & Harriet have led retail growth for the portfolio recently, while Mi Campo Tequila is driving gains on the spirits side.

For its full fiscal year ending in February, Constellation is expecting its total organic net sales to decline in the range of 4%-6%, with comparable operating income down by 9%-11%. “By focusing on factors within our control, we are confident we’re positioning the company for long-term success,” said Newlands.–Daniel Marsteller