Why did reported EPS fall more than comparable EPS in the third quarter?

Reported diluted EPS was $2.88 versus $3.39 a year earlier, a 15% decline, while comparable diluted EPS was $3.06 versus $3.25, a 6% decline. The difference reflects comparable adjustments in the quarter, including $34.8 million of 2025 Restructuring Initiative costs and a $15.6 million loss on sale of business, which are excluded from comparable results.

How is the Beer business performing?

Beer net sales declined 1% to $2,009.7 million, with shipments down 2.2% to 100.4 million case equivalents and depletions down 3.0%. Operating margin increased 10 basis points to 38.0%, helped by favorable pricing and lower depreciation, partly offset by aluminum tariffs and unfavorable fixed cost absorption. The company said Beer gained dollar and volume share in U.S. tracked channels.

What is the impact of the Wine and Spirits divestitures?

Wine and Spirits net sales fell 51% to $213.1 million, and the company attributes the decline mainly to the SVEDKA Divestiture and the 2025 Wine Divestitures, which contributed $202.6 million of net sales in the prior-year quarter. Excluding divestitures, organic net sales declined 7%. Operating income fell to $33.7 million from $95.2 million, with the operating margin dropping from 22.1% to 15.8%.

What is the fiscal 2026 outlook?

Reported EPS guidance was updated to $9.72 to $10.02. Comparable EPS guidance of $11.30 to $11.60 was affirmed, with enterprise organic net sales guided to a decline of 4% to 6%. Operating cash flow is targeted at $2.5 to $2.6 billion, capital expenditures at approximately $1.2 billion, and free cash flow at $1.3 to $1.4 billion.

What capital return actions were announced?

The company repurchased $824.1 million of stock in the first three quarters of fiscal 2026 and paid dividends of $538.8 million. The board declared a quarterly dividend of $1.02 per Class A share and $0.92 per Class 1 Convertible share, payable February 12, 2026, to holders of record as of January 29, 2026.

STZ 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed January 7, 2026. Cited figures are marked; the original filing is the authoritative source.

Constellation Brands, Inc. filed this Form 8-K on January 7, 2026 to furnish its news release (Exhibit 99.1) announcing results for the third fiscal quarter ended November 30, 2025, and to report a quarterly cash dividend declaration.

Third-quarter net sales were $2,222.8 million^a, down 10% from $2,463.8 million, with organic net sales down 2%. Reported operating income was $692.0 million (down 13%), reported net income attributable to CBI was $502.8 million, and reported diluted EPS was $2.88 versus $3.39 a year earlier. Comparable diluted EPS was $3.06, down 6%, and comparable operating income was $738.9 million, flat year over year.

Beer remained the core of results, with net sales of $2,009.7 million^b (down 1%) and depletions down 3.0%. The company said the Beer Business gained dollar and volume share in Circana U.S. tracked channels. Wine and Spirits net sales fell 51% to $213.1 million, reflecting the SVEDKA Divestiture and the 2025 Wine Divestitures; organic net sales declined 7%, and operating income fell to $33.7 million from $95.2 million.

Management updated its fiscal 2026 reported EPS outlook to $9.72 to $10.02^c and affirmed its comparable EPS outlook of $11.30 to $11.60, operating cash flow target of $2.5 to $2.6 billion, and free cash flow target of $1.3 to $1.4 billion. Year-to-date share repurchases totaled $824.1 million, and the board declared a quarterly dividend of $1.02 per Class A share payable February 12, 2026, to holders of record on January 29, 2026.

02—Key points

Key Highlights

Q3 FY2026 reported diluted EPS of $2.88 (down 15%) and comparable diluted EPS of $3.06 (down 6%).
Net sales of $2,222.8 million fell 10%; organic net sales declined 2% on a comparable basis.
Beer net sales declined 1% to $2,009.7 million; shipments fell 2.2% and depletions fell 3.0%, while the company reported dollar and volume share gains in Circana U.S. tracked channels.
Wine and Spirits net sales fell 51% to $213.1 million, driven by the SVEDKA and 2025 Wine Divestitures, and operating income dropped to $33.7 million from $95.2 million.
Fiscal 2026 reported EPS outlook was updated to $9.72 to $10.02; comparable EPS outlook of $11.30 to $11.60 was affirmed.
Year-to-date operating cash flow was $2,106.2 million and free cash flow was $1,450.1 million; $824.1 million of stock was repurchased through the first three quarters.
Board declared a quarterly dividend of $1.02 per Class A share, payable February 12, 2026.

03—Questions

Frequently Asked Questions

Why did reported EPS fall more than comparable EPS in the third quarter?
Reported diluted EPS was $2.88 versus $3.39 a year earlier, a 15% decline, while comparable diluted EPS was $3.06 versus $3.25, a 6% decline. The difference reflects comparable adjustments in the quarter, including $34.8 million of 2025 Restructuring Initiative costs and a $15.6 million loss on sale of business, which are excluded from comparable results.
How is the Beer business performing?
Beer net sales declined 1% to $2,009.7 million, with shipments down 2.2% to 100.4 million case equivalents and depletions down 3.0%. Operating margin increased 10 basis points to 38.0%, helped by favorable pricing and lower depreciation, partly offset by aluminum tariffs and unfavorable fixed cost absorption. The company said Beer gained dollar and volume share in U.S. tracked channels.
What is the impact of the Wine and Spirits divestitures?
Wine and Spirits net sales fell 51% to $213.1 million, and the company attributes the decline mainly to the SVEDKA Divestiture and the 2025 Wine Divestitures, which contributed $202.6 million of net sales in the prior-year quarter. Excluding divestitures, organic net sales declined 7%. Operating income fell to $33.7 million from $95.2 million, with the operating margin dropping from 22.1% to 15.8%.
What is the fiscal 2026 outlook?
Reported EPS guidance was updated to $9.72 to $10.02. Comparable EPS guidance of $11.30 to $11.60 was affirmed, with enterprise organic net sales guided to a decline of 4% to 6%. Operating cash flow is targeted at $2.5 to $2.6 billion, capital expenditures at approximately $1.2 billion, and free cash flow at $1.3 to $1.4 billion.
What capital return actions were announced?
The company repurchased $824.1 million of stock in the first three quarters of fiscal 2026 and paid dividends of $538.8 million. The board declared a quarterly dividend of $1.02 per Class A share and $0.92 per Class 1 Convertible share, payable February 12, 2026, to holders of record as of January 29, 2026.

04—Continue

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