$Constellation(STZ)$ is scheduled to report its fiscal third-quarter 2026 earnings on Wednesday, January 7, 2026, after the market close, followed by a conference call on January 8.
The sentiment heading into this report is cautious. STZ has struggled with a softening consumer environment, specifically impacting its Wine and Spirits division and its core Hispanic demographic for the Beer business.
Q3 2026 Expectations
Earnings Per Share (EPS): $2.65–$2.66 (Est. 18.2% decline YoY).
Revenue: ~$2.18–$2.20 billion (Est. 11.6% decline YoY).
Context: The projected declines are partly due to significant divestitures (SVEDKA and certain wine brands) and a "right-sizing" of inventory levels at the distributor level.
Constellation Brands (STZ) faces a particular set of challenging circumstances among consumer staples stocks when it reports fiscal 2026 third-quarter earnings after Wednesday's closing bell.
Constellation Brands (STZ) Q2 2026 Earnings Summary
Constellation Brands (STZ) reported its fiscal Q2 2026 results on October 6, 2025. While the headline numbers showed a "beat" against lowered expectations, the underlying data revealed a company navigating its most difficult consumer environment in years.
Comparable EPS: $3.63 (Beat consensus of $3.37, but down 16% YoY).
Net Sales: $2.48 Billion (Down 15% YoY).
Beer Performance: Net sales fell 7% to $2.35 billion. While Pacifico (+13%) and Victoria (+19%) were bright spots, the main volume drivers—Modelo Especial and Corona Extra—saw depletion declines of ~4% and ~7% respectively.
Wine & Spirits: Sales plummeted 65% to $136 million, primarily due to the divestiture of SVEDKA and several wine brands. The segment reported an operating loss of $19.8 million.
The Lesson Learnt: "The Fragility of the Core Consumer"
The most significant takeaway from the Q2 report and the preceding guidance revision in September 2025 is a lesson in consumer concentration risk.
1. Exposure to "Cyclical" Demographic Headwinds Management admitted that their core Hispanic consumer base—which accounts for a massive portion of Modelo and Corona sales—is currently under severe economic pressure. They cited two specific factors that the market previously underestimated:
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Sector-Specific Unemployment: Weakness in "4,000+ calorie job" sectors (like construction) has a direct, outsized impact on Mexican import beer volumes.
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Socioeconomic Anxiety: Management noted that ~80% of their surveyed consumers expressed significant concern over personal finances, leading to a "pulling back" in purchase frequency.
2. The Danger of Over-Optimism in Guidance At the start of the year, STZ maintained an optimistic outlook, believing their premium brand power would shield them from the macro slowdown.
The Lesson Learnt is that even "recession-resistant" staples have a breaking point when inflationary pressures hit specific demographics simultaneously. STZ was forced to slash its full-year EPS guidance from a high of $12.90 down to $11.30–$11.60, a move that permanently reset investor expectations for the fiscal year.
3. Inventory Rebalancing is a Double-Edged Sword STZ aggressively "rebalanced" distributor inventory in Q2 (shipments trailed depletions by ~7 points). While this "cleans the pipes" for the second half of the year, it creates a massive temporary hole in revenue and margin absorption that the stock market finds difficult to digest without a clear "recovery" date.
Key Metrics to Watch To Watch For Q3 2026
Investors will be scanning the report for these three critical areas to determine if the stock's recent slump is a value opportunity or a warning sign:
Beer Depletion & Shipment Volumes: * While Mexican beer (Modelo Especial, Pacifico) remains the crown jewel, management recently lowered Beer net sales guidance to a decline of (4)% to (2)%. Watch if depletions (sales from distributors to retailers) are outpacing shipments (sales from STZ to distributors). If shipments are significantly lower, it suggests distributors are still "de-stocking," which could delay a recovery.
Wine & Spirits Margin Recovery: * This segment has been a drag on performance. Analysts expect net sales for this segment to plummet ~60% YoY due to divestitures. The key is whether the remaining "Power Brands" (The Prisoner, Meiomi) are showing organic growth and if operating margins are stabilizing.
FY 2026 Guidance Revisions: * In late 2025, STZ updated its comparable EPS guidance to $11.30–$11.60. Any further trim to this outlook would likely trigger a sell-off, while a "reaffirmation" could signal that the worst of the macro headwinds are priced in.
Constellation Brands (STZ) Price Target
Based on 24 analysts from Tiger Brokers offering 12 month price targets for Constellation Brands in the last 3 months. The average price target is $172.88 with a high forecast of $226.22 and a low forecast of $118.00. The average price target represents a 21.31% change from the last price of $142.51.
Short-Term Trading Analysis
The Strategy:
The "Post-Earnings Fade": Given the historical tendency for the stock to drop 1–3% even on decent news, short-term traders often look to buy the "dip" 24–48 hours after the announcement rather than gambling on the release itself.
Volatility Play: If the stock tests the $135 support level on a miss, look for a "relief bounce" if management provides a concrete timeline for the completion of their Mexican brewery capacity expansions.
Summary
Constellation Brands (STZ) is set to report its fiscal Q3 2026 earnings on January 7, 2026. The consensus reflects a company still navigating the "cleanup" phase following a massive guidance cut in late 2025.
The Numbers & Sentiment
Earnings Per Share (EPS): Estimated at $2.66, a sharp 18.2% decline year-over-year.
Revenue: Projected at $2.18–$2.20 billion, down 11.6% YoY.
Sentiment: Cautiously optimistic on valuation but bearish on momentum. While Zacks gives it a #4 (Sell) rank due to near-term pressure, Wells Fargo recently raised its price target to $160, citing "easier comps" ahead in Q4.
Three Things That Will Move the Stock
Beer Depletions: The market is looking for signs that the Hispanic consumer has stabilized. If depletions (sales to retailers) show any sequential improvement from the weak Q2, the stock could rally.
Guidance Reaffirmation: After slashing FY26 targets in September, any further reduction would be disastrous. Reaffirming the $11.30–$11.60 EPS range is the bare minimum required to maintain investor confidence.
Wine/Spirits Margins: Following the SVEDKA divestiture, investors want to see if the remaining "Power Brands" (Meiomi, Kim Crawford) can deliver stable margins rather than acting as a drag on the core Beer business.
The "Value" Play
STZ is currently trading at a forward P/E of ~11.2x, a significant discount to its 5-year average of 23x. Many analysts view this as a "see it to believe it" story — if Q3 shows that the bottom is in, the valuation gap could close quickly.
Appreciate if you could share your thoughts in the comment section whether you think STZ could show improvement in its depletions (sales to retailers) from the weak Q2, if that happen, we could see a short rally for its stock price.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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