A month has gone by since the last earnings report for Constellation Brands (STZ Quick QuoteSTZ - Free Report) . Shares have lost about 7.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Constellation Brands due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Constellation Brands Inc before we dive into how investors and analysts have reacted as of late.

Constellation Brands' Q4 Earnings Beat Estimates

Constellation Brands reported fourth-quarter fiscal 2026 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. The company’s sales and earnings declined year over year on weak consumer demand trends. 

Comparable earnings per share (EPS) of $1.90 dropped 28% year over year in the fiscal fourth quarter but surpassed the Zacks Consensus Estimate of $1.74. On a reported basis, the company’s EPS was $1.16 against a loss of $2.09 reported in the year-earlier quarter.

Net sales declined 11% year over year to $1.920 billion but came above the Zacks Consensus Estimate of $1.896 billion. Organic net sales were flat year over year.

STZ’s Q4 Performance Details

Constellation Brands' sales for the beer business jumped nearly 1% year over year to $1.73 billion, backed by a rise of 1.1% in shipment volumes and favorable pricing, partly offset by unfavorable mix. Depletions rose 0.6% as declines for Modelo Especial of just under 1% and Corona Extra of about 6% were more than offset by increases from Pacifico, Victoria and the Modelo Chelada brands of nearly 21%, 17%, and 5%, respectively.

Sales in the wine and spirits segment plunged 58% year over year to $194.2 million in the fiscal fourth quarter. The metric was hurt by a 72.9% decline in shipment volumes, reflecting the effects of the Wine & Spirits divestitures, changes in distributor contractual obligations and pricing efforts taken on certain brands.

The Zacks Consensus Estimate for the company's beer, and wine and spirits segments is currently pegged at $1.71 billion and $195 million, respectively.

Peeking Into Constellation Brands’ Margins

STZ's comparable operating income came in at $508 million, down 9% year over year. Operating income for the beer segment slipped 8% year over year to $572.5 million. The beer segment’s operating margin contracted 340 basis points (bps) to 33.2%, as favorability in net sales was more than offset by higher cost of goods sold owing to unfavorable fixed cost absorption, elevated depreciation and aluminum tariffs.

The wine and spirits segment reported an operating income of $2.6 million, which fell sharply from $99.7 million in the year-ago quarter. The segment’s operating margin contracted to 1.3% from 21.7%, mainly owing to the unfavorable impacts from sales, somewhat offset by favorable marketing and other selling, general and administrative expenses.

STZ’s Financial Position Seems Strong

As of Feb. 28, 2026, Constellation Brands’ cash and cash equivalents were $102.4 million, long-term debt (excluding current maturities) was $9.7 billion and total shareholders’ equity (excluding non-controlling interest) was $8.1 billion. The company generated an operating cash flow of $2.7 billion and an adjusted free cash flow of $1.8 billion in fiscal 2026.

STZ’s board announced a quarterly dividend of $1.03 per share for Class A shares on April 8, 2026, representing a hike of 1%. The dividend is payable on May 14 to its shareholders of record as of April 29, 2026.

The company’s strong cash flow generation in fiscal 2026 enabled it to consistently execute disciplined capital allocation priorities. The company returned more than $1.6 billion to its shareholders, including share repurchases of more than $900 million.

Constellation Brands still forecasts an operating cash flow of $2.4-$2.5 billion for fiscal 2027. It expects free cash flow of $1.6-$1.7 billion. STZ plans to incur capital expenditures of $800 million in fiscal 2027.

Constellation Brands’ FY27 Expectations

Looking forward, management is optimistic about the momentum seen in the reported quarter across its beer and wine & spirits businesses. Enterprise and wine & spirits growth (decline) net sales assumptions for fiscal 2027 exclude $142 million for the March 1, 2025, to June 1, 2025 period. These are no longer part of the year-over-year results following the 2025 Wine Divestitures.

STZ projects enterprise organic net sales growth (decline) of (1)% - 1%, beer net sales growth (decline) of (1)% - 1%, and wine & spirits business organic net sales growth (decline) of (1)% - 1%. Enterprise operating margin on a reported and comparable basis is projected to be 32-33%, with beer operating margin of 37-38% and wine & spirits operating margin of 5-6%.

The company anticipates comparable EPS of $11.20-$11.90 for fiscal 2027 compared with $11.82 earned in fiscal 2026. STZ expects reported fiscal 2027 EPS to be $11.10-$11.80 compared with $9.61 seen in fiscal 2026. Constellation Brands anticipates a reported and comparable tax rate of 20% for fiscal 2027.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, Constellation Brands has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock has a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Constellation Brands has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.