Corona beer manufacturer Constellation Brands lowers its projection for yearly sales

Constellation Brands (STZ.N), the company that owns Corona and Modelo, opened a new tab and lowered its year sales forecast on Friday as consumer spending on wines, spirits, and beers is being negatively impacted by persistently sticky inflation.

In contrast to its earlier prediction of 4% to 6% growth, the company now anticipates 2% to 5% annual net sales growth.

“Given near-term uncertainty on when consumers will revert to more normalized spending, we have prudently lowered our growth outlook,” CEO Bill Newlands stated.

Depletion growth, or the rate at which products are sold, increased by just 3.2% in the third quarter for beer, Constellation’s main source of income, compared to an 8.2% increase in the previous year.

More individuals choosing lighter and lower-calorie liquors has also put pressure on the overall demand for alcoholic beverages and spirits.

In contrast to its earlier prediction of between $13.60 and $13.80 per share, the business anticipates adjusted profit per share for fiscal 2025 to be between $13.40 and $13.80.

Premarket trade on Friday saw a 2% decrease in the company’s shares. In 2024, they fell by almost 9%.

The business announced last month that it would sell its Svedka vodka brand to Sazerac, a company based in New Orleans.

The U.S. Surgeon General’s announcement last week that alcoholic beverages should include a warning about cancer risks on their label caused Constellation’s shares to plummet, indicating a move toward tobacco-style regulation of the liquor business.

According to statistics gathered by LSEG, the company reported net sales of $2.46 billion for the third quarter that ended on November 30—below predictions of $2.53 billion—and adjusted earnings per share of $3.25, which fell short of estimates of $3.31 per share.