Modelo and Corona parent company says weak wine demand could impact latest earnings

Published On Sep 4, 2024, 11:43 AM

Constellation Brands, the parent company of Modelo and Corona, has reported a significant decline in demand for its wine and spirits division, which will likely lead to a non-cash goodwill impairment loss of $1.5 to $2.5 billion in its second quarter. This comes as the company anticipates a 4% to 6% decrease in net sales for the wine and spirits segment for fiscal year 2025, a downward revision from its previous expectations. Constellation also indicated that macroeconomic factors, such as rising unemployment rates, are affecting overall consumer demand for its products, although its beer business is projected to maintain positive growth.

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Stock Forecasts

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Negative

The predicted reduction in net sales and the significant goodwill impairment signal troubling times ahead for Constellation Brands, particularly its wine operations. While the beer business remains stable, the overall impact on earnings from the wine sector could be substantial, leading analysts to anticipate a bearish outlook for the stock in the short term.

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Modelo and Corona parent company says weak wine demand could impact latest earnings

Sep 4, 2024, 11:43 AM

Constellation Brands has been seeing soft demand in its wine and spirits segment, and the alcohol producer recently said it will weigh on its second-quarter results.

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