STZ US S&P 500Russell 1000 Earnings call
Constellation Brands (STZ) · Q3 2026 results and valuation
Share price: $144.12 · 2026-11-11
Constellation Brands is an international producer and marketer of beer, wine, and spirits. The company operates in the United States, Mexico, New Zealand, and Italy, supplying products to wholesale distributors and retailers. Source: 10-K annual report (2026-04-22)
Results Q3 2026 vs Q2 2026 · previous quarter · fiscal Q2 2027 · published 7 Oct 2026 and 1 Jul 2026
Net income down 13.5% on the previous quarter. Management sounded restrained, in its script and in answers to analysts.
1 · Numbers
−13.5%
Net income vs Q2 2026
Outlook given
Net income 565.8M vs 653.8M
Revenue +8.2%
Against the same quarter last year (Q3 2025) it is +21.4%, so the move on last quarter looks seasonal or timing-related rather than a trend.
2 · How management spoke
Restrained
Less upbeat than 74% of company calls
Answers to analysts: typical, in line with the script.
Similar to last call.
3 · What stood out
Constellation Brands expects beer operating margins to be between 34.5% and 35.5% in the second half of the year.
Valuation
Is Constellation Brands undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2026-02-28), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At −1.1% growth a year (3-year revenue growth), the model's fair value is $40.84 a share — the stock trades 253% above it. Today's price assumes 9.5% growth a year.
Current price
$144.12
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+9.5% for 10 yrs
Fair value / share
$40.84
Buy below
$30.63
Price vs fair value
Overvalued >200%
Price vs buy-below price
Overvalued >200%
Read between the lines
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Guidance
STZ reiterated its fiscal 2027 guidance, which includes comparable EPS of $11.20 to $11.90 per share.
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Guidance
STZ expects beer operating margins to be between 34.5% and 35.5% in the second half of the year.
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Guidance
STZ expects ships and depletes to track within 99% of each other for the full year.
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Figure
Bringing the asset online will result in an annualized depreciation impact of approximately $75 million.
Source quote
“When we do bring that online, the depreciation impact on an annualized basis will be about $75 million.”
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Figure
Pacifico became a top 10 beer brand with a very long distribution runway ahead of the company.
Source quote
“Pacifico became a top 10 beer brand with a very long distribution runway ahead of us.”
4 more
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Key theme
The company aims to create distinct lanes for each brand to achieve more incrementality as a portfolio rather than having brands compete against each other.
Source quote
“Because if we have distinct lanes for each of our brands, they will play as a portfolio with significantly more incrementality than if they sit on top of each other.”
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Figure
Circana data indicates that the 4-week and 12-week performance metrics are better than the 52-week figures.
Source quote
“If I look at Circana data, our 12-week is better than our 52-week and our 4-week is better than our 12-week, right?”
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Figure
STZ has $2.5 billion left on its repurchase authorization through FY '28, providing the company the flexibility and capability to repurchase more shares.
Source quote
“Given our strong cash flow generation and the $2.5 billion that we have left on our repurchase authorization that runs through FY '28, we have the flexibility and the capability to repurchase more shares.”
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Figure
STZ achieved 3x more market share gains in beer than the next best competitor, which outperformed the category by 400 basis points while utilizing significantly less spend than others.
Source quote
“We came away as I'm going to say it, the winner of World Cup because we had 3x more market share gains in beer than the next best competitor, which was 400 basis points of outperformance versus the category, and we did that with significantly less spend than other people.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“Our beer business outperformed and accelerated meaningfully quarter-on-quarter.”
“So we saw an overcorrection of inventories in FY '26, and we entered FY '27, frankly, too light, and that resulted in us testing the lower limits of how low...”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-08-31)
| Metric | Q3 2026period end 2026-08-31 | Q2 2026period end 2026-05-31 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 2.63B | 2.43B | +8.2% | 2.48B | +6.1% |
| Gross profit | 1.39B | 1.32B | +5.5% | 1.31B | +6.3% |
| Operating income | 805.0M | 845.3M | −4.8% | 874.0M | −7.9% |
| Net income | 565.8M | 653.8M | −13.5% | 466.0M | +21.4% |
| P/E | — | — | — | — | — |
Topics
Most discussed now
- In line with prior quarters, I would ask that you limit yourself to one question per person, which will...
- Before turning it over to Nick to kick things off, please keep in mind...
Faded since Q2 2026
- Dropped As Constellation Brands looks to the balance of the year, as it laid out in April, this continues to be a...
- Dropped If Constellation Brands can get to some account data or some on-premise data, you do see big spikes around a game...
- Dropped It still doesn't hurt that you have the World Cup event in a mix of major markets and that people...
- Fading Thinking about its pack price architecture, its revenue management, how Constellation Brands meets the consumer where they are in an…
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Results of operations; Regulation FD disclosure · SEC 8-K
The company reported net sales of $2.633 billion and operating income of $805 million for the second quarter of fiscal 2027, representing a 6% increase in sales and an 8% decrease in operating income from the previous year.
- Material agreement; New financial obligation · SEC 8-K
The company entered into a Term Loan Credit Agreement dated September 18, 2026, with Manufacturers and Traders Trust Company as the Administrative Agent.
- Regulation FD disclosure · SEC 8-K
Constellation Brands announced the notice of full redemption for its outstanding 4.350% Senior Notes due 2027, which have an aggregate principal amount of $600.0 million as of September 8, 2026.
- Director or officer change; Shareholder vote results · SEC 8-K
Stockholders approved an amendment to the Long-Term Stock Incentive Plan, extending its term to July 22, 2036, and establishing a reserve of 6,000,000 shares of Class A Common Stock.
- Results of operations; Regulation FD disclosure · SEC 8-K
The company reported net sales of $2,433 million, up 3% year-over-year, with a reported earnings per share of $3.79 and operating income of $845 million.
- Director or officer change; Regulation FD disclosure · SEC 8-K
Constellation Brands announced the election of Morgan Flatley as an independent director to the Board of Directors, effective May 20, 2026.
- Regulation FD disclosure; Other events · SEC 8-K
Constellation Brands issued a notice for the full redemption of its 3.700% Senior Notes due 2026, which have an aggregate principal amount of $600.0 million.
- Other events · SEC 8-K
The company entered into an underwriting agreement dated May 4, 2026, with BofA Securities, Goldman Sachs, PNC Capital Markets, and Truist Securities.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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fiscal 2027
guidance, including comparable EPS of $11.20 to $11.90 per share
Source quote
“First, we are reiterating our fiscal 2027 guidance, including comparable EPS of $11.20 to $11.90 per share.”
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if the positive September trends that we saw continue
expect to land at the high end of that range
Source quote
“And if the positive September trends that we saw continue, we would expect to land at the high end of that range.”
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now
expect to come in at the high end of the guide should those trends continue
Source quote
“And I'd just start by saying we feel really good about the trajectory given the results in the first half and the trends in September, which is why we expect now to come in at the high end of the guide should those trends continue.”
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back half of the year
look pretty normal compared to any other year
Source quote
“So I would expect the back half of the year to look pretty normal compared to any other year.”
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full year
ships and depletes to track within 99% of each other
Source quote
“And for the full year, we would expect ships and depletes to track within 99% of each other.”