Has Constellation Brands Stock Become A Different Bet?

Constellation Brands (STZ) stock is priced at 11.6 times earnings over the past twelve months, as reported, against 22.9 for the S&P 500. Shareholders paying that price need to know what they are buying, and management has changed what it talks about. On its fiscal Q2 2026 call in October 2025, management emphasized that most consumers it surveyed, Hispanic and non-Hispanic alike, were worried about the economy. Now the company emphasizes something different. So what is it?

Constellation Brands Now Talks Up Its Own Marketing

On the fiscal Q2 2027 call on October 7, 2026, management said its increased investments and focus on marketing are working. Constellation was also the biggest gainer of dollar share in beverage alcohol that quarter, management said.

That is a different case from the one management made a year earlier. On the fiscal Q2 2026 call, management said 80% of the Hispanic and non-Hispanic consumers it surveys continue to express concern about the socioeconomic environment. On the fiscal Q3 2026 call in January 2026, management said the beer category remained challenged, and that this was largely around the Hispanic consumer. Constellation has shifted its focus from a worry about its customers, a factor largely outside its control, to the money it is spending itself.

How Big Is Beer, And Is It Growing?

The beer business is nearly the whole company, which is why the worry about its customers mattered. The segment had revenue of $8.32 billion in fiscal 2026, accounting for 91.0% of company revenue. Those sales fell 2.6% from a year earlier, after rising 4.6% in fiscal 2025.

Company revenue has since turned up, rising 6.1% from a year earlier to $2.63 billion in fiscal Q2 2027, after a 3.3% fall in fiscal Q1 2027. Within beer, management said Pacifico, now a top 10 beer brand, is growing at something like 20%.

Management is also spending more on marketing, and said the company had probably underspent on it over the last couple of years. The company expects marketing to be about 10% of net sales in the second half of fiscal 2027, and above 11% in fiscal Q3 2027 as it spends on Major League Baseball and NCAA football.

Is Constellation Brands’ Turn To Marketing Reassuring For Holders?

On balance, the change is reassuring. Management now talks about what the company is doing rather than what its customers fear, and sales have started to grow again. Alongside the extra marketing, Constellation expects beer operating margins of 34.5% to 35.5% in the second half of fiscal 2027. Management also said September depletions, or beer sold by distributors to retailers, were trending in the right direction. If those trends continue, the company expects comparable earnings per share, its own adjusted measure, at the high end of its fiscal 2027 range of $11.20 to $11.90.

Yet the evidence so far is one quarter, and part of it came from restocking. Management said the company spent much of the first half rebuilding distributor inventory levels, and needed to ship during the quarter to close out distributor order backlogs. Over the twelve months to August 2026, revenue was still down 4.3% from a year earlier. The rest of the company, wine and spirits, saw its sales fall 50.6% in fiscal 2026, after Constellation sold part of that business.

The economy has not left the picture either. Pricing net of mix was roughly flat in fiscal Q2 2027, and management said it had been selective with its pricing actions given the macroeconomic backdrop. Revenue growth against a year earlier, 6.1% in fiscal Q2 2027, is the number to watch when Constellation Brands reports on or around January 5, 2027.

Does This Mean You Should Act On STZ?

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