In a U.S. beverage alcohol market still weighed down by economic caution and shifting consumer habits, Constellation Brands delivered a better-than-expected third quarter for fiscal 2026, ending November 30, 2025. Net sales fell 10% to $2.22 billion, but the figure topped analyst forecasts of around $2.16 billion. Comparable diluted EPS reached $3.06, well ahead of the $2.63 consensus.
The results underscore a familiar pattern: beer remains the company’s steadfast anchor, even as headwinds persist. The beer division, dominated by imported Mexican brands, saw net sales dip just 1% to roughly $2.01 billion. Shipments declined 2.2%, and depletions fell 3.0%, yet the business continued to gain dollar and volume share in Circana-tracked channels – outperforming the total beverage alcohol category by nearly half a point and the beer category by about one point.
Modelo Especial and Corona Extra held firm as the #1 and #5 dollar sales leaders in the U.S. beer market. Meanwhile, growth shifted noticeably toward more budget-friendly options. Pacifico surged over 15%, Victoria climbed more than 13%, and Corona family extensions like Sunbrew and Familiar ranked among the top share gainers. These secondary brands benefited from sharper pricing and marketing amid tighter household budgets.
The quarter’s operating margin for beer edged up 10 basis points to 38.0%, thanks to favorable pricing and lower depreciation, which helped offset higher costs of goods sold driven by aluminum tariffs and softer fixed-cost absorption from lower volumes. With 41% of Mexican beer packaging relying on aluminum – and tariffs doubled to 50% since mid-2025 – the cost pressure is real and expected to linger into the fourth quarter. Still, the division’s ability to maintain margin expansion and capture share highlights the enduring strength of its portfolio and pricing power.
Wine and spirits results reflected ongoing portfolio reshaping. Net sales plunged 51% to $213.1 million, largely due to the prior divestiture of Svedka vodka and several wine brands. Organic net sales declined a more modest 7%, and the segment continued to outperform the higher-end U.S. wine category in both dollar and volume performance in tracked channels.
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Against this backdrop, Constellation timed a strategic move that signals long-term ambition: the launch of Modelo Chelada Limón y Sal Non-Alcoholic, the brand’s first non-alcoholic offering in the U.S. Announced just ahead of the earnings release on January 7, 2026, the product recreates the fan-favorite lime-and-salt Chelada flavor – already the top performer in Modelo’s ready-to-drink lineup for six consecutive years – with less than 0.5% ABV. It arrives in 12-ounce six-packs, line-priced with Corona Non-Alcoholic, and rolled out initially in key markets including California, Florida, Illinois, New York, and Texas.
“People want choices without having to compromise, and Modelo Chelada Non-Alcoholic does exactly that,” said Logan Jensen, vice president of brand marketing at Modelo. “Limón y Sal has been the fan favorite… so it was the obvious pick for our first non-alcoholic release. It brings moderation and flavor together, with the authentic sabor that defines the Modelo Chelada product line.”
The timing aligns perfectly with Dry January and broader mindful drinking trends. As mindful drinking gains momentum and the low/no-alcohol chelada segment is projected to grow sharply over the next 24 months, the extension taps into demand for bold, flavorful options rather than simple alcohol-removed lagers. By putting its strongest brand equity – Modelo, the No. 1 beer in U.S. dollar sales – behind the format, Constellation is not merely participating in the non-alcoholic wave; it is positioning its flagship franchise at the forefront of flavored, moderation-focused innovation.
For the full fiscal year ending February 28, 2026, the company updated its reported EPS outlook to $9.72–$10.02 and reaffirmed comparable EPS guidance of $11.30–$11.60. It continues to expect organic net sales to decline 4%–6%, with beer down 2%–4% and wine/spirits organic sales down 17%–20%.
In a challenging environment, Constellation Brands is proving that defensive share gains in core beer combined with proactive bets on non-alcoholic flavor innovation offer a credible path forward. The Modelo non-alcoholic debut may prove one of the quarter’s most forward-looking signals – a reminder that even in tough times, the industry’s strongest players evolve by doubling down on what consumers want next: authenticity, taste, and choice, with or without alcohol.
