Constellation Brands (STZ) shares declined early Thursday as it issued a full-year earnings outlook below market estimates, including tariff impact, while the beer and wine company reported better-than-expected fiscal fourth-quarter results.

Constellation anticipates comparable earnings to be in a range of $12.60 to $12.90 a share for fiscal 2026, it said late Wednesday, while the current consensus on FactSet is for $13.83. In the just-ended fiscal year, adjusted EPS climbed 11% to $13.78. The stock decreased 3.5% in the most recent premarket activity.

Enterprise organic sales are expected to range from a 2% decline to a 1% rise for the ongoing fiscal year, according to Constellation. Beer sales are forecast to be flat to up 3% while organic sales in the wine and spirits division are expected to fall by 17% to 20%.

The company said its guidance reflects the expected impact of US government tariffs announced last week and duties implemented by Canada on March 4. On Wednesday, President Donald Trump announced a 90-day pause on certain tariffs for non-retaliating countries. A lower tariff rate of 10% would be applicable during the period.

"Despite a softer consumer demand backdrop in fiscal 2025, we delivered another year of enterprise net sales growth and substantial comparable operating margin improvement, as well as double-digit comparable EPS growth," Chief Executive Bill Newlands said in a statement. "Looking ahead, in a tough socioeconomic environment we are taking decisive actions designed to continue to support our industry-leading Beer Business, reset our cost base, and redefine our portfolio."

In a separate statement, Constellation agreed to divest several of its mainstream wine brands such as Woodbridge and Meiomi, along with related vineyards and facilities, to The Wine Group for an undisclosed sum. The deal, subject to approval by regulators, is expected to close immediately after the end of Constellation's first quarter of fiscal 2026.

Constellation also said it's reviewing its organizational structure to refocus its wine and spirits portfolio on higher-margin brands priced largely at $15 and above. The review is projected to save the company more than $200 million in annualized costs by fiscal 2028.

"We do not see the merit in the wine divestiture (dilutive to earnings without improving the multiple) and have limited confidence in the beer volume outlook," Truist Securities said in a Wednesday client note. The brokerage has a hold rating on Constellation's stock.

For the three-month period ended February, the company posted adjusted EPS of $2.63 versus $2.30 the year before, surpassing the Street's view of $2.27. Net sales inclined 1% year over year to $2.16 billion, ahead of the average analyst estimate of $2.13 billion.

Beer revenue was nearly unchanged at $1.7 billion with shipment declines largely offset by pricing, according to Constellation. Sales of wine and spirits improved 5% to $459.8 million, amid volume gains in the group's US wholesale business and international markets. Both divisions' depletion rate, or the pace at which units are sold to end consumers, declined.

Constellation expects net sales to grow about 2% to 4% for the fiscal years 2027 and 2028, compared with its previous medium-term projections for a 6% to 8% gain. Beer sales are estimated to rise by the same range in the two fiscal years, down from prior expectations for a 7% to 9% rise. It also anticipates wine and spirits sales to be flat to up 3%, reflecting a lower bottom end than the prior estimate of 1% growth.

Per-share earnings are pegged to increase by mid-single-digits to low-double-digits for fiscal 2027 and by low-single-digits to mid-single-digits for the subsequent year, the company said. It previously estimated low-double-digit EPS growth in the medium term.