Constellation Brands beats Q2 estimates and acquires SpikedAde

Constellation Brands, the maker of Modelo Especial and Corona, reported second-quarter fiscal 2027 earnings that exceeded Wall Street expectations for both revenue and profit. Net sales rose 6% to $2.63 billion, while adjusted earnings per share reached $3.74, surpassing estimates of approximately $3.56.

The company's beer segment saw a 5% increase in revenue, driven by higher shipment volumes. However, depletions—the measure of sales from distributors to retailers—fell slightly by 0.6%. While flagship brands Modelo Especial and Corona Extra saw declines in depletions, growth in brands like Pacifico and Victoria helped offset these losses.

As part of a strategy to diversify into the fast-growing ready-to-drink (RTD) category, Constellation announced the acquisition of SpikedAde, a vodka-based beverage brand. The deal includes an initial payment of at least $75 million, with up to $278 million in additional contingent payments over five years based on performance.

Despite the earnings beat, the company's stock faced downward pressure in extended trading. Investors expressed concern over softening consumer demand in retail channels and the company's decision to maintain its full-year comparable earnings outlook while lowering its annual operating margin forecast.