Constellation Brands Q1 FY2027: profit up on margin as sales dip
Constellation Brands is Neutral: first-quarter profit rose sharply on better margins while underlying sales drifted lower, and full-year guidance points to flat-to-down revenue with comparable EPS slightly below last year. Read the 3% sales drop as partly divestiture-driven, since organic sales rose 3%, but note beer depletions slipped 0.3%, so volume rather than price is the soft spot. Cash generation and shareholder returns remain the dependable part.
1 · Expected vs. Actual
Free preview belowGAAP EPS of $3.79 rose 31% and comparable EPS of $3.43 rose 7%. The gap between them comes largely from a $49.3 million gain on undesignated commodity derivative contracts and a $63.3 million valuation-allowance tax benefit, neither of which reflects selling more beer. Operating income of $845.3 million rose 18% and gross margin improved to 54.3% from 50.4%.
Net sales were $2.43 billion, down 3% from $2.52 billion a year earlier, but up 3% once the divested wine brands are stripped out. Beer did nearly all the work at $2.28 billion, up 2%, while Wine and Spirits fell 47% to $149.2 million on the 2025 divestitures yet grew 8% organically. The caution flag: beer shipments rose 1.8% while depletions, what distributors actually sell on to retailers, slipped 0.3%.
Management kept comparable EPS at $11.20-$11.90 and updated reported EPS to $11.50-$12.20, against $9.61 reported and $11.82 comparable last year. The midpoint of the comparable range, $11.55, sits below what was delivered in fiscal 2026. Revenue guidance of $8.91-$9.09 billion implies net sales of -1% to 1%, with an operating margin of 32% to 33%.
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Figures on this page come from the company's original SEC filings. The analysis is generated automatically and checked against validation rules, but may still contain errors or omissions. Not investment advice. · Generated 2026-09-17
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