By Connor Hart

Constellation Brands posted higher sales in its recent quarter, but the maker of Modelo and Corona sees slower growth in the years ahead, primarily as beer sales temper.

The company on Wednesday said its outlook for the current year assumes beer sales to be flat to up 3%, while wine and spirits sales are expected to fall 17% to 20%.

Over the medium term, it expects total sales to grow 2% to 4%, down from a prior projection of 6% to 8%. The cut is largely due to a sharper slowdown in its beer sales, also to between 2% to 4%, down from its prior view of 7% to 9%.

The lower view for its beer portfolio comes after Constellation encountered a recent slowdown in beer sales. It cited several reasons, including weak economic activity in manual-labor job sectors, such as construction, and weak consumer sentiment.

For its current year, Constellation also forecast adjusted per-share earnings of $12.60 to $12.90 in its fiscal 2026, missing the $13.94 that analysts surveyed by FactSet expected.

The company's outlook came as it swung to a loss in its fiscal fourth quarter, dragged down by impairment charges, though sales climbed ahead of Wall Street's expectations.

The company logged a net loss of $375.3 million, or $2.09 a share, for its three months ended Feb. 28, compared with a profit of $392.4 million, or $2.14 a share, in last year's comparable quarter.

Adjusted per-share earnings came in at $2.63, ahead of the $2.28 that analysts surveyed by FactSet expected.

Sales edged 1.2% higher to $2.16 billion, topping the $2.13 billion that analysts modeled.

Beer sales were relatively flat as higher prices offset a decline in shipments. The wine and spirits segment meanwhile increased 11%, largely driven by volume growth across U.S. wholesale businesses and international markets.

Shares fell 4%, to $176 in late trading. Through the regular session's close, the stock has lost nearly one-third of its value.

Constellation's recent earnings came as the company said it will undergo a review of its organizational structuring and sell several of its lower-cost wine brands.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

April 09, 2025 17:44 ET (21:44 GMT)

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