The Trader Harbor
  • Business
  • Politics
  • World News
  • Stocks
  • Business
  • Politics
  • World News
  • Stocks

The Trader Harbor

World News

Tariffs and weaker beer demand are weighing on Modelo owner Constellation Brands

by admin July 4, 2025
July 4, 2025
Tariffs and weaker beer demand are weighing on Modelo owner Constellation Brands

Constellation Brands on Tuesday reported quarterly earnings and revenue that missed analysts’ estimates as beer demand slid and tariffs on aluminum weighed on its profitability.

Still, the brewer reiterated its forecast for fiscal 2026, showing confidence that it can hit its financial targets despite the weaker-than-expected quarterly performance and higher duties.

Shares of the company fell less than 1% in extended trading on Tuesday evening but rose 3% during morning trading on Wednesday after the company’s conference call.

The stock has shed more than 20% of its value this year, fueled by concerns about how the higher duties imposed by President Donald Trump would affect demand for its beer.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

The report, which covers the three months ended May 31, includes the start of Trump’s tariffs on canned beer imports in early April. He also hiked trade duties on aluminum to 25% in mid-March and to 50% in early June.

Both imported beer and aluminum are crucial to Constellation’s beer business, which accounts for roughly 80% of the company’s overall revenue. Constellation’s beer portfolio only includes Mexican imports, like Corona, Pacifico and Modelo Especial, which overtook Bud Light as the top-selling beer brand in the U.S. two years ago.

Constellation reported fiscal first-quarter net income of $516.1 million, or $2.90 per share, down from $877 million, or $4.78 per share, a year earlier. Constellation’s operating margin fell 150 basis points, or 1.5%, in the quarter, in part driven by higher aluminum costs.

Excluding items, the brewer earned $3.22 per share.

Net sales dropped 5.8% to $2.52 billion, fueled by weaker demand for its beer and the company’s divestiture of Svedka vodka.

Constellation is still facing softer consumer demand, CEO Bill Newlands said in a statement. He attributed the weaker sales to “non-structural socioeconomic factors.” Constellation’s beer business saw shipment volumes fall 3.3%, caused by weaker consumer demand.

Last quarter, Newlands said Hispanic consumers were buying less of the company’s beer because of fears over Trump’s immigration policy. Roughly half of Constellation’s beer sales come from Hispanic consumers, according to the company.

But on Wednesday, Newlands demurred when asked about Hispanic consumer sentiment, saying that all shoppers are concerned about higher prices.

“When you see a fair amount of change, both Hispanic and non-Hispanic consumers are concerned about inflation and about cost structure,” Newlands said.

He added that consumers aren’t going out to eat as much and hosting fewer social occasions, which means they are drinking less beer. Still, he maintained that consumer interest in drinking beer hasn’t waned; while shoppers’ overall spending on beer has fallen, their relative spend on beer compared with their total grocery bill has held steady.

For fiscal 2026, Constellation continues to expect comparable earnings per share of $12.60 to $12.90. The company is projecting that organic net sales will range from declining 2% to rising 1%.

This post appeared first on NBC NEWS

0
FacebookTwitterGoogle +Pinterest
previous post
S&P 500 Earnings for 2025 Q1 — Still Overvalued

Related Posts

Inflation vs. wages: How rising prices stack up...

June 28, 2024

Nvidia’s CEO did a Q&A with analysts. What...

March 28, 2025

DOJ sues Walgreens, alleging it ‘knowingly’ filled millions...

January 19, 2025

How UnitedHealthcare became the face of America’s health...

May 23, 2025

With corners of the media industry in upheaval,...

July 20, 2024

Store closures hit highest level since pandemic —...

January 25, 2025

Ticketmaster offers four tickets for $80 to selected...

July 20, 2024

Ad revenue should stabilize for media companies in...

December 31, 2024

Plummeting stock, boycotts and flagging sales: What’s fueling turmoil for Tesla?

March 18, 2025

Robinhood CEO sees Amazon-like subscription model as path...

March 29, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    • Tariffs and weaker beer demand are weighing on Modelo owner Constellation Brands

      July 4, 2025
    • Essence Fest leads a summer of events for Black entrepreneurs galvanized by economic uncertainty

      July 4, 2025
    • S&P 500 Earnings for 2025 Q1 — Still Overvalued

      July 4, 2025
    • Money’s Not Leaving the Market — It’s Rotating!

      July 4, 2025
    • From Oversold to Opportunity: Small Caps on the Move

      July 4, 2025
    • White House wants Obama intel officials ‘held accountable’ for role peddling 2016 Russia hoax

      July 4, 2025

    Categories

    • Business (1,283)
    • Politics (3,913)
    • Stocks (1,493)
    • Uncategorized (45)
    • World News (1,276)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: TheTraderHarbor, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 thetraderharbor.com | All Rights Reserved