Is Constellation Brands Stock Stronger Than It Looks?
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Bulls might be betting that Constellation Brands (STZ) is building a group of up-and-coming beer brands led by Pacifico. You probably think of the company as the maker of Corona and Modelo, with sales in decline, and its revenue did fall 4.3% over the twelve months ended August 31, 2026. That is the contradiction: falling sales on one side, fast-growing brands on the other. So how big have Pacifico and the brands behind it become?
Pacifico Is Now A Top 10 Beer Brand
During the October 7, 2026 call for fiscal Q2 2027, management said Pacifico is still growing at about 20% so far in fiscal 2027, and Victoria is growing at a similar pace behind it. Management stressed that Pacifico is now the #10 brand in beer and is no longer a small brand, adding that it still has plenty of room to widen its distribution.
Management said its higher investment in marketing is working, and that Constellation gained more dollar share in beverage alcohol than any other company in the quarter. By management’s account, Pacifico is already large and still adding sales.
Are Corona And Modelo Still Losing Share?
Modelo’s business has stabilized, management said on the same call. The brand has steadied and its share has stabilized, with recent weeks better than the past year. Management added that it is not satisfied with where share stands.
Corona is the weaker of the two. Even so, management said Corona’s share has stabilized, and its latest four- and twelve-week trends beat the past year. Asked on the call whether the brand is losing its place with drinkers, management said a brand with so much awareness should be performing better. Constellation’s revenue also fell from a year earlier in each of the four quarters through May 31, 2026. The shares trade at 12.9 times earnings over the past twelve months, compared with 22.8 for the S&P 500.
In the quarter ended August 31, 2026, revenue rose 6.1% from a year earlier. Pacifico and Victoria are still growing while Modelo steadies and Corona lags, though one quarter of growth is not yet a turn.
What Would Show Pacifico Is Not Enough?
A slowdown in sales once distributors are restocked would. Management said distributors cut their beer stocks too far in fiscal 2026 and began fiscal 2027 too light, so the company had to ship during the latest quarter to clear order backlogs and avoid running out. Some of that quarter’s sales growth may therefore have come from refilling distributors rather than from more drinking.
Management expects the second half of fiscal 2027 to look normal, with full-year shipments nearly matching what distributors sell on to retailers. If that holds, sales should then follow what drinkers buy. If Pacifico’s growth slows, Constellation’s sales growth would depend more on Corona and Modelo.
Constellation may be stronger than it looks, but that case rests mostly on management’s word. Pacifico keeps growing, Modelo has only steadied and Corona still lags. Constellation’s revenue growth from a year earlier is the number to watch in its next report, expected in January 2027.
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