Constellation Brands Inc (NYSE:STZ) stock fell 0.18% (As on July 3, 11:10:55 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the first quarter of FY26. As of May 31, 2025, Constellation Brands’ cash and cash equivalents were $73.9 million, long-term debt (excluding current maturities) was $9.8 billion, and total shareholders’ equity (excluding non-controlling interest) was $7.3 billion. The company generated an operating cash flow of $637.2 million and an adjusted free cash flow of $444.4 million for the first quarter of fiscal 2026.

Moreover, Constellation Brands’ sales for the beer business fell 2% year over year to $2.23 billion, backed by a decline of 3.3% in the shipment volume. The shipment decline resulted from socioeconomic headwinds, which led to soft consumer demand. Depletion volumes dipped 2.6% due to declines of 4%, just above 7% and 3% in Modelo Especial, Corona Extra and the Modelo Chelada brands, respectively. This was partly offset by more than 13% depletion growth for the Pacifico brand. Sales in the wine and spirits segment declined 28% year over year to $280.5 million in the fiscal first quarter. Sales were hurt by a 30.4% decline in shipment volumes and an 8.1% dip in depletions. Organic sales for the wine and spirits segment were down 21% in the quarter, led by a 13.3% improvement in shipment volume. The soft shipment volume was primarily driven by the SVEDKA divestiture and a strategic adjustment in shipment timing to better reflect ongoing weak consumer demand, particularly in the mainstream price segments of the U.S. wholesale market.

STZ in the first quarter of FY26 has reported the adjusted earnings per share of $3.22, missing the analysts’ estimates for the adjusted earnings per share of $3.38, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue decline of 5.5 percent to $2.52 billion in the first quarter of FY26, missing the analysts’ estimates for revenue of $2.57 billion. STZ’s comparable operating income was $810 million, down 11% from the prior-year quarter. The decline is attributed to the soft operating income in the beer, and wine and spirits businesses. Operating income for the beer segment fell 5% year over year to $873.4 million. The beer segment’s operating margin contracted 150 basis points to 39.1%, owing to higher COGS due to increased tariffs for aluminum, marketing investments and other SG&A. Additionally, lower fixed cost absorption benefits led to the margin contraction. The wine and spirits segment reported an operating loss of $6 million compared with an operating income of $59.7 million in the year-ago quarter.