Constellation Brands shares dip after tariff uncertainty hits annual outlook

Published 10/04/2025, 10:08
Updated 10/04/2025, 10:10
© Reuters.

Investing.com -- Constellation Brands (NYSE:STZ) unveiled annual guidance that fell short of estimates, as the impact of U.S. President Donald Trump's sweeping tariffs overshadowed fourth-quarter results that beat estimates.  

Shares the group slipped by more than 3% in premarket U.S. trading on Thursday.

For the three months ended February 28, the company reported adjusted per-share income of $2.63 on revenue of $2.16 billion, copmared with Wall Street projections of $2.33 and $2.15 billion, respectively. The beverage maker also announced a $4 billion stock buyback plan.

"Constellation reported better than expected fourth-quarter results, but given the uncertain environment, investor focus is more on the forward outlook," analysts at Morgan Stanley (NYSE:MS) led by Dara Mohsenian said in a note to clients.

The company, whose brands include Corona and Pacifico, said it expected earnings per share to be in a range of $12.60 to $12.90, missing estimates of $13.46.

In a statement, Constellation flagged that its "[f]iscal 2026 outlook and guidance assumptions reflect the anticipated impact of the tariffs announced by the U.S. government on April 2, 2025." 

On Wednesday, with financial markets around the world roiling, Trump abruptly revealed a reversal of most of his punishing and sweeping tariffs on a host of countries, saying he would pause them for 90 days. However, Trump said in a social media post that these nations would still face a "substantially lowered Reciprocal Tariff" of 10%.

Constellation also lowered its medium-term organic sales expectations for its key beer business to a range of 2% to 4%, down from a previous outlook of 7% to 9%.

In a separate release, Constellation announced that it had signed an agreement with drinks firm The Wine Group to divest its mainstream wine brands like Woodbridge and Meiomi. The transaction, which is expected to close floowing the end of the company's fiscal first quarter, is tipped to generate around $900 million in proceeds in its current financial year.

"[T]his is a healthy step, in particular making hard decisions on asset sales and setting more realistic beer growth goals," anlaysts at BofA said in a note.

(Yasin Ebrahim contributed reporting.)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.