01—Abstract
Summary
Summary of the 10-Q filed July 1, 2026. Cited figures are marked; the original filing is the authoritative source.
Constellation Brands, Inc. reported first quarter fiscal 2027 results for the three months ended May 31, 2026, with net sales of $2,432.7 milliona, down from $2,515.0 million a year earlier, primarily reflecting the 2025 Wine Divestitures, partially offset by higher Beer net sales driven by shipment volume growth and pricing.
Operating income rose to $845.3 millionb from $713.8 million, largely due to favorable Comparable Adjustments, including net gains on undesignated commodity derivative contracts versus losses a year ago, and efficiency initiatives including the 2025 Restructuring Initiative. Net income attributable to CBI was $653.8 million, or $3.79 per diluted share, compared with $516.1 million, or $2.90 per diluted share, in the prior-year quarter. Beer segment net sales increased to $2,283.5 million, with shipments of 113.3 million case equivalents, up 1.8%, while Wine and Spirits net sales fell to $149.2 million, reflecting $142.0 million from divested brands.
Cash flow from operations was $661.8 millionc, and the company repurchased 1,465,295 shares for $223.8 million during the quarter. Total long-term debt including current maturities was $10,197.5 million at May 31, 2026, after issuing $500.0 million of 4.85% senior notes due 2031 and redeeming $600.0 million of 3.70% notes.
The company also expects its reported effective tax rate for Fiscal 2027 to be in the range of 16% to 18%, and disclosed a New Zealand Wine Divestitures transaction completed in June 2026. The filing also discloses pending securities litigation (the Meza class action, with oral argument on a motion to dismiss scheduled for July 22, 2026) and related derivative suits, and states that a $0.6 milliond restructuring cost was recognized in the quarter against $122.5 million cumulative costs under an initiative expected to yield over $200 million in net annualized cost savings by Fiscal 2028.
02—Key points
Key Highlights
- Net sales were $2,432.7 million, down from $2,515.0 million, largely due to the 2025 Wine Divestitures; Beer net sales rose to $2,283.5 million on $40.7 million of shipment volume growth and $17.6 million of favorable pricing.
- Operating income increased to $845.3 million from $713.8 million, driven by favorable Comparable Adjustments (including $49.3 million of net gains on undesignated commodity derivative contracts) and cost optimization.
- Diluted net income per share attributable to CBI was $3.79, versus $2.90 a year earlier; net income attributable to CBI was $653.8 million versus $516.1 million.
- Net cash provided by operating activities was $661.8 million, compared with $637.2 million, and capital expenditures were $177.2 million.
- The company issued $500.0 million of 4.85% senior notes due 2031 and redeemed $600.0 million of 3.70% December 2016 Senior Notes; total debt was $10,197.5 million at May 31, 2026.
- Repurchased 1,465,295 Class A shares for $223.8 million in the quarter; $2,752.1 million remained available under the $4.0 billion 2025 Authorization as of June 26, 2026.
- Quarterly cash dividend declared June 30, 2026 was $1.03 per Class A share, payable August 13, 2026; the company expects a Fiscal 2027 effective tax rate of 16% to 18%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2027, Constellation Brands kept $0.27.
- Revenue$2.43B100.0%
- Cost of revenue−$1.11B45.7%
- Gross profit$1.32B54.3%
- Operating costs−$475.3M19.5%
- Operating income$845.3M34.7%
- Interest, other & tax−$191.5M7.9%
- Net income$653.8M26.9%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2027filed July 1, 2026Financial Statements
Q1 FY2027 against Q1 FY2026
| Line item | Q1 FY2027Q1 FY2026 | Change |
|---|---|---|
| Revenue | $2.43B$2.52B | −3.3% |
| Cost of Revenue | $1.11B$1.25B | −10.9% |
| Gross Profit | $1.32B$1.27B | +4.3% |
| SG&A Expenses | $457.00M$500.70M | −8.7% |
| Operating Income | $845.30M$713.80M | +18.4% |
| Net Income | $653.80M$516.10M | +26.7% |
05—Questions
Frequently Asked Questions
Why did operating income rise even though net sales declined?
Operating income increased $131.5 million to $845.3 million. The filing attributes this mainly to favorable Comparable Adjustments, including net gains of $49.3 million on undesignated commodity derivative contracts compared with net losses of $17.7 million a year earlier, lower asset impairment expenses ($18.3 million versus $52.1 million), and efficiency and cost initiatives including the 2025 Restructuring Initiative, partially offset by lower net sales from the 2025 Wine Divestitures.
How is the Beer business performing?
Beer net sales increased $49.0 million to $2,283.5 million. Shipments rose 1.8% to 113.3 million case equivalents, and depletions declined 0.3%. Beer gross profit increased $31.2 million, and the segment's operating income rose to $891.4 million from $873.4 million, though the company notes net sales continued to be affected by economic uncertainty and socioeconomic factors.
What is the status of the Wine and Spirits segment?
Wine and Spirits net sales fell 47% to $149.2 million, mainly because $142.0 million of sales from the 2025 Wine Divestitures is no longer included. Organic net sales increased $10.7 million, driven by $17.2 million of branded shipment volume growth, partly offset by a $4.9 million decline in non-branded sales and a $3.2 million impact from strategic pricing actions. The segment reported an operating loss of $1.1 million, compared with $6.0 million a year earlier.
What are the key legal and financing developments disclosed?
A putative securities class action (Meza v. Constellation Brands, Inc.) is pending in the Western District of New York, with oral argument on the defendants' motion to dismiss scheduled for July 22, 2026, and related derivative suits are stayed pending a final judgment in Meza. On the financing side, the company issued $500.0 million of 4.85% senior notes due 2031 with net proceeds of $496.8 million, redeemed $600.0 million of 3.70% notes, and had $1,902.6 million of remaining revolving credit capacity at May 31, 2026.
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