SAVE THE DATE!

When Constellation Brands depletions trend came in at -3% last fiscal qtr (thru Aug), INSIGHTS asked if -3% was the "New Normal." For now, answer appears to be yes. But for how long? In latest qtr thru Nov, depletions once again declined 3% and are now down 2.7% for 9 mos. Recently some better trends and indicators, including better Dec sales, stock up and more upbeat analyst reports. Lotsa puts and takes make it tuff to read what will happen next. Constellation $$ Sales Up Slightly in Dec; "Massive" Modelo Christmas Week Short-term trends notably improved. Boosted by Christmas week growth in Circana, STZ $$ sales actually eked out a 0.3% gain for 4 weeks thru 12/28 in Circana multi-outlet + convenience data. That's a 1.6 point swing compared to Constellation's full yr trend of -1.3% (see below). And Constellation again became #1 $$ share gainer, up 0.4 share for mo. What's more, Modelo brand grew 4% and hit 12 share for 1 week thru 12/29. That's just 1 week; even if more about the holiday than any lasting shift, Modelo's "massive" Christmas (as Circana's Scott Scanlon called it) did demonstrate brand health.Hispanic Consumer Still "Very Challenged"; STZ Keeps Investing in Mktg, Gaining Distribution Constellation ceo Bill Newlands declined to call a bottom for STZ, seemingly still wary about macroeconomic trends and "very challenged" Hispanic consumer. But he did give several reasons to be cheerful on top of "very strong" week in Dec. Those included upcoming World Cup as a "great example" of a "beer moment" with "some incremental benefits for us" given big Hispanic fan base, as well as several brands like Pacifico, Victoria, Corona Sunbrew and Corona NA still up strong. Then too, STZ keeping its foot on gas in terms of mktg (10% of revs in qtr) and gaining distribution points at a mid-single digit rate. Stock jumped 5% day after results as STZ beat estimates, didn't change guidance of net revs down 2-4% for fiscal yr thru Feb 2026.Shipments Dropped 1.4 Mil Bbls for 12 Mos; Modelo Especial and Corona Extra Over 3/4 of Biz Whatever happens next, Constellation looks to dig out of an uncustomary hole as it hasn't been down since 2009. Yet for 12 mos thru Nov 2025, its shipments down 1.4 mil bbls, 4% to 30.1 mil bbls. Revs down 3% to $8.3 bil and operating income down 4% to $3.2 bil. To get back to growth, Constellation does face a basic math problem. Its two lead brands, Modelo Especial and Corona Extra, are both down. Modelo was virtually half of Constellation biz (49%) and Corona Extra 29% in calendar 2024. In latest fiscal qtr, Modelo STRs down 4% and Corona Extra down 9%, STZ said. Not much better for 9 mos. Those 2 brands alone likely lost well over 1 mil bbls in 2025, after gaining 1 mil bbls in 2024 (all from Especial) and nearly 2 mil bbls in 2023. Double-digit growth on Pacifico (6% of volume), Corona Familiar (3%) and Victoria (2%) plus nearly all incremental Corona Sunbrew don't come close to making up for core Modelo/Corona losses.Analyst Takes: "Stability?" "Reasons to Be Optimistic" "Limited Visibility on Recovery" Multiple analysts weighed whether there's a shift in wind, without any clear conclusion. "Have we perhaps reached stability, and it's up from here?" asked Bernstein's Nadine Sarwat. "Better than a warm beer," headlined JP Morgan's Drew Levine, as results "better than feared." Still a "sustained inflection&hellip; tough to call with ongoing consumer pressure." There is "limited visibility on a recovery," wrote Morgan Stanley's Dara Mohsenian, "with macro/secular pressure." Tho "sequentially better December scanner trends and lapping peak immigration enforcement (Feb) are reasons to be optimistic," said Jefferies' Kaumil Gajrawala, "it is early." Roth's Bill Kirk summed up: "With the World Cup, tax refunds, low fuel costs, a ban on intoxicating hemp, lapping California wildfire impacts and lapping disruptions to Hispanic consumer habits, Constellation&#39;s Beer depletion should improve."

While STZ STRs Still -3%, Analysts Warm to Possible Shifts in Wind

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