“volume declines certainly were a headwind in the quarter. Additional headwinds in the quarter were tariffs, as you noted, logistics and then brewery maintenance. Offsetting those headwinds, we continue to make good progress against our cost savings initiatives.”
— Garth Hankinson
03Detailed Report
STZ
Company STZ
Period
Q3 2026
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 17, 2026
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Executive Summary
Constellation Brands reported QQ3 2026 results with revenue of $2.2228 billion, marking a year-over-year decline of 9.8% and a quarter-over-quarter decline of about 10.4%. The company delivered a gross margin of 53.2%, operating margin of 31.1%, and net margin of 22.6%, supported by ongoing cost savings and favorable price actions despite volume deleverage. Management signaled that Q4 will remain a seasonally weak quarter for beer with fixed overhead absorption and incremental headwinds from aluminum tariffs and depreciation of assets coming online. Looking ahead, STZ reiterated its multi-year capacity expansion plan (approximately 7 million hectoliters through FY28, with Veracruz as a key modular build-out) and emphasized distribution investments, brand momentum (Pacifico, Victoria, Modelo), and price-pack optimization to navigate a challenging macro backdrop. Management indicated more color on FY27 and beyond will be provided in April earnings, highlighting that macro conditions have worsened since their previous guidance but that the company remains focused on controllables and strategic growth initiatives. The balance of the quarter and the World Cup-driven beer occasions present upside potential, particularly for Hispanic consumer-focused brands.
Key Performance Indicators
Revenue
Decreasing
2.22B
QoQ: -10.41% | YoY: -9.78%
Gross Profit
Decreasing
1.18B
53.23% margin
QoQ: -9.68% | YoY: -7.87%
Operating Income
Decreasing
692.00M
QoQ: -20.82% | YoY: -12.74%
Net Income
Decreasing
502.80M
QoQ: 7.90% | YoY: -18.36%
EPS
Decreasing
2.88
QoQ: 8.68% | YoY: -15.29%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability snapshot (TTM QQ3 2026 context):
- Revenue: $2.2228B; YoY: -9.78%; QoQ: -10.41% (Q3 2026 data).
- Gross Profit: $1.1832B; Gross Margin: 53.23%; YoY Gross Margin change: -7.87%; QoQ: -9.68%.
- Operating Income: $692.0M; Operating Margin: 31.13%; YoY: -? (not disclosed in provided data); QoQ: -20.82%.
- Net Income: $502.8M; Net Margin: 22.62%; YoY: -18.36%; QoQ: +7.90%.
- EPS: $2.88; Diluted EPS: $2.88; Shares (weighted average): 174.515M.
- EBITDA: $817.9M; EBITDA Margin: 36.80%.
- Free Cash Flow (FCF): $370.9M; FCF Yield approx. 16.7% of quarterly revenue.
- Operating Cash Flow: $616.9M; Capex: $246.0M; Net Change in Cash: $80.4M; Cash at End of Period: $152.4M; Cash at Beginning: $72.0M.
- Balance sheet highlights: Total Assets $21.684B; Total Liabilities $13.683B; Total Stockholders’ Equity $7.711B; Net Debt $10.511B; Long-Term Debt $10.285B; Short-Term Debt $378.7M; Cash & Equivalents $152.4M; Working Capital position supported by accounts receivable $708.3M and inventory $1.379B.
- Key leverage and liquidity metrics suggest a debt-heavy but cash-flow-generative profile, with ongoing capital expenditure commitments for capacity expansion and strategic brands.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
2.22B
-9.78%
-10.41%
Gross Profit
1.18B
-7.87%
-9.68%
Operating Income
692.00M
-12.74%
-20.82%
Net Income
502.80M
-18.36%
7.90%
EPS
2.88
-15.29%
8.68%
Key Financial Ratios
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