Constellation Brands falls after lowering margin forecast
STZ•Constellation Brands shares fell nearly 5% premarket after it cut its annual operating margin forecast to 31%-32% from 32%-33%. The company beat Q2 profit and sales estimates and agreed to pay $75 million at closing for SpikedAde, plus up to $278 million over five years tied to performance and capital-allocation priorities.
1. Margin forecast lowered
Constellation Brands lowered its annual operating margin forecast to between 31% and 32%, from 32% to 33%. Its shares fell nearly 5% to $110.11 premarket. The company beat Q2 estimates for profit and sales, with demand for Modelo Especial and Victoria helping offset challenges in the alcohol industry and a soft spending environment.
2. SpikedAde acquisition
The company will pay $75 million at closing for SpikedAde, a vodka-based ready-to-drink brand, plus up to $278 million over five years tied to the brand's performance and capital-allocation priorities. J.P. Morgan said the acquisition could be interesting, although the brand and category are nascent, and said focus is likely to be on management's outlook for beer revenue and operating margins in the second half of fiscal 2027 and implications for fiscal 2028. The stock had fallen 16% year to date through the prior day's close.
