Constellation Beat the Street. Its Beer Shopper Flinched at the Gas Pump.

By Constellation Brands’ own math, average U.S. gas prices at their spring peak were up more than 50 percent from late February, and the company watched its beer shopper slow down almost in real time. The Modelo maker still beat Wall Street expectations and held its full-year comparable earnings outlook. The quarter in between offers a month-by-month read on the value-conscious summer shopper, and it arrives just as beverage suppliers lock their July and August plans.

Constellation Brands reported first-quarter fiscal 2027 results on June 30 that came in ahead of expectations, with comparable earnings of $3.43 per share on net sales of $2.43 billion, against the roughly $3.25 per share and $2.41 billion analysts had forecast, according to Investing.com. Net income rose to $653.8 million from $516.1 million a year earlier, per the Rochester Business Journal, and the company held its full-year comparable earnings outlook of $11.20 to $11.90 per share.

Beer did the work, though not evenly. Beer net sales grew 2 percent to $2.28 billion on shipment growth of 1.8 percent and favorable pricing, with segment operating margin roughly flat at 39 percent as mix and higher marketing spend offset the pricing gains, according to the company’s earnings release. Depletions, the measure of distributor sales to retailers, slipped 0.3 percent. Underneath that number is a portfolio in rotation: the release said Modelo Especial depletions declined about 2 percent and Corona Extra more than 5 percent, while Pacifico grew about 21 percent, Victoria about 14 percent, and the Modelo Chelada brands about 6 percent. Even with the flagships soft, the beer business ranked as the number one dollar share gainer in Circana U.S. tracked channels, outperformed the total beer category by nearly 3 percentage points in year-over-year dollar sales, and placed 5 of the top 15 dollar share gaining brands in the category. Modelo Especial held its position as the number one beer brand in the U.S. by dollar sales.

Wine and spirits net sales fell 47 percent to $149.2 million, a decline the company attributed to its 2025 wine divestitures. Excluding those divestitures, organic net sales rose 8 percent and depletions grew 6.6 percent, and the release said the remaining wine portfolio ranked as the number two dollar share gainer in the total wine category. CEO Nicholas Fink, roughly two and a half months into the role, said in the company’s announcement that Constellation continues to navigate a “discerning and value-conscious” consumer environment.

The Gas Pump Set the Quarter’s Demand Curve

The more useful material for suppliers sits in how the quarter moved. March was strong. April and May softened sharply, and management tied the slowdown directly to fuel. CFO Garth Hankinson said on the company’s July 1 earnings call that at their first-quarter peak, average U.S. gas prices were up well over 50 percent from the end of the company’s prior fiscal year in late February, an increase of more than $1.60 a gallon, with California up roughly 40 percent, Illinois up about 70 percent, and New York, Florida, and Texas each up more than 50 percent. Management said the pressure showed up as reduced traffic and tighter discretionary choices, and noted that other consumer companies were seeing the same pattern.

By early June, growth had modestly improved, though not back to March levels. Fink said the pickup looked broad-based across geographies rather than concentrated around World Cup viewing markets, and attributed it more to “some of the headwinds abating” than to one-time event tailwinds. Texas and Florida remained challenged while California improved, and Fink said the spending gap between Hispanic zip codes and the general population has narrowed but persists.

Constellation Is Spending Into the Sports Calendar

The company said marketing spend will run above 10 percent of net sales in the second and third quarters, concentrated behind the World Cup, college football, and the NFL. The gap between the quarter’s 1.8 percent shipment growth and its slightly negative depletions reflects that setup: Hankinson described the over-shipment as the normal pattern of stocking ahead of the summer selling season, with the two measures expected to converge by fiscal year-end. Fink also pointed to demand splitting toward the ends of the pack-size range, noting Constellation holds its largest share positions in both the smallest packs and the largest sharing packs, and flagged Corona Non-Alcoholic, now the number four brand in non-alcoholic beer on strong double-digit growth, as a white space the company may fund further.

For suppliers, the read is a planning input, not just a bellwether headline. The direct category signal lands with 1P beverage and adjacent grocery suppliers, where fuel prices functioned this spring as a leading indicator worth building into July and August promotion timing and replenishment assumptions, and where the brand rotation inside Constellation’s own portfolio, growth concentrated in Pacifico, Victoria, and the Cheladas rather than the flagships, is a mix signal worth carrying into assortment and space conversations. The traffic and discretionary-spend pattern applies just as much to 3P sellers in discretionary categories, since the pullback management described was a whole-basket behavior, not a beer-aisle one. Constellation itself is treating the demand question as open: Hankinson said the company held its guidance because one good quarter, in an environment with this little macro visibility, was not enough to change the outlook heading into the heart of the summer selling season.

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