Snapshot

Constellation Brands had a market capitalisation of $21.1 billion as of October 8, 2026. Revenue was $9.1 billion in FY2026, gross profit was $4.7 billion in FY2026, operating income was $2.7 billion in FY2026, and net income was $1.8 billion in FY2026.

In Q2 FY2027, revenue was $2.6 billion, gross profit was $1.4 billion, operating income was $805.0 million, net income was $582.3 million, and diluted EPS was $3.41. Free cash flow was $644.0 million in Q2 FY2027. Revenue over the trailing twelve months was $9.2 billion to Q2 FY2027, while net income over the trailing twelve months was $2.0 billion to Q2 FY2027.

Growth

Revenue declined 10.5% in FY2026 against FY2025, to $9.1 billion in FY2026 from $10.2 billion in FY2025. Revenue compound annual growth was −1.12% in FY2023–FY2026 and 1.19% in FY2021–FY2026. Diluted EPS was $9.61 in FY2026, and its compound annual growth was −1.24% in FY2021–FY2026; the FY2026-against-FY2025 comparison was not meaningful because the earlier value was zero or negative.

Free cash flow was $1.9 billion in FY2026, down 6.11% in FY2026 against FY2025. Free cash flow compound annual growth was 2.35% in FY2023–FY2026 and −1.12% in FY2021–FY2026. In Q2 FY2027, revenue increased 8.23% against Q1 FY2027 and 6.13% against Q2 FY2026, while diluted EPS declined 9.94% against Q1 FY2027 and increased 28.8% against Q2 FY2026.

Profitability

Gross margin was 51.6% in FY2026, a change of −0.5 percentage points in FY2025–FY2026 and −0.3 percentage points in FY2021–FY2026. Operating margin was 29.8% in FY2026, increasing 26.3 percentage points in FY2025–FY2026 but remaining −2.6 percentage points below FY2021 in FY2021–FY2026.

Pre-tax margin was 26.0% in FY2026, a 26.8 percentage-point increase in FY2025–FY2026 and a −3.5 percentage-point change in FY2021–FY2026. Net margin was 19.2% in FY2026, rising 19.5 percentage points in FY2025–FY2026 while remaining −4.4 percentage points from FY2021 in FY2021–FY2026. Return on equity was 21.7%, return on assets was 7.75%, and return on invested capital was 9.02% in FY2026. In Q2 FY2027, gross margin was 52.9% and operating margin was 30.6%.

Balance sheet

Total debt was $10.6 billion in FY2026, compared with $11.5 billion in FY2025. Net debt was $10.5 billion in FY2026, compared with $11.4 billion in FY2025, while cash and short-term investments were $102.4 million in FY2026.

Shareholders’ equity was $8.4 billion in FY2026, compared with $7.1 billion in FY2025. Working capital was $216.5 million in FY2026, following −$318.8 million in FY2025. In Q2 FY2027, net debt was $10.2 billion, a change of −$220.0 million against Q1 FY2027 and −$255.7 million against Q2 FY2026. The current ratio was 1.0× and debt to equity was 1.2× in Q2 FY2027.

Cash flow & capital return

Operating cash flow was $2.7 billion in FY2026, declining 15.3% in FY2026 against FY2025. Capital expenditure was $816.0 million in FY2026, and free cash flow was $1.9 billion in FY2026. Free cash flow represented 105.5% of net income in FY2026.

Dividends paid were $778.2 million in FY2026, and net share repurchases were $916.4 million in FY2026. Capital returned to shareholders was $1.7 billion in FY2026 and $8.5 billion in FY2022–FY2026. Weighted average shares were 175.4 million shares in FY2026, compared with 181.5 million shares in FY2025; the share count changed −9.32% in FY2021–FY2026. In Q2 FY2027, free cash flow was $644.0 million, up 32.9% against Q1 FY2027 and down 3.25% against Q2 FY2026.

Valuation

As of October 8, 2026, the P/E was 11.0×, lower than the 17.9× five-year median over the five fiscal years to FY2026 and lower than the 17.6× industry median. As of October 8, 2026, the P/S was 2.3×, lower than the 4.6× five-year median over the five fiscal years to FY2026 and the 4.4× ten-year median over the ten fiscal years to FY2026, but higher than the 0.9× industry median.

As of October 8, 2026, the P/B was 2.4×, lower than the 4.5× five-year median over the five fiscal years to FY2026 and the 3.9× ten-year median over the ten fiscal years to FY2026, but higher than the 2.2× industry median. As of October 8, 2026, EV/Sales was 3.4×, below its own historical medians but above the 1.1× industry median. EV/Cash flow was 16.7× as of October 8, 2026, below both its 30.5× five-year median and 31.2× ten-year median.

What changed since last quarter

Revenue was $2.6 billion in Q2 FY2027, increasing 8.23% against Q1 FY2027 and 6.13% against Q2 FY2026. Gross margin was 52.9% in Q2 FY2027, down 1.4 percentage points against Q1 FY2027 and up 0.1 percentage points against Q2 FY2026. Management attributes the year-over-year sales increase in Q2 FY2027 primarily to shipment-volume growth in the Beer and Wine and Spirits segments, while noting ongoing effects from economic uncertainty and socioeconomic factors.

Operating income was $805.0 million in Q2 FY2027, below $845.3 million in Q1 FY2027 and $874.0 million in Q2 FY2026. Management attributes the year-over-year operating-income decrease in Q2 FY2027 primarily to asset impairment and related expenses, higher marketing spend, and unfavorable short-term incentive accruals, partly offset by shipment growth, lower tariff costs, and efficiency and cost-optimization initiatives. Net income was $582.3 million and diluted EPS was $3.41 in Q2 FY2027; management attributes the year-over-year increases primarily to a lower income-tax provision.

Open questions

• How could continuing consumer spending conditions affect future shipment volumes?
• To what extent could tariffs, materials costs and transportation costs affect future costs of product sold?
• How may the planned distributor inventory reductions affect shipment volume during the second half of FY2027?
• What will be the ongoing financial effects of the restructuring initiative and wine divestitures?

Sources

• Form 10-Q filed October 7, 2026 — management’s discussion and analysis