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Even Constellation Brands is having an uncharacteristically rough year so far in 2025, and it just became more difficult as it reduced guidance on revs and earnings Sep 2. Its stock declined another 9-10% ($2.5-3 bil in mkt cap) after announcement of revisions. STZ steadfastly maintains its current issues are cyclical not structural, related to macroeconomic conditions and extra pressure on Hispanic consumers who make up 40% of its volume (50% of Modelo Especial). That compares to 15% for total industry. But the trend changes are still striking and perhaps not fully explained by the softness of overall beer industry and current immigration policies. Constellation's anticipated softness (in coming qtrs) embedded in revised guidance suggests trends that are looking more like those of the category. Several analysts pointed this out, tho STZ is still gaining share. STZ Could Be Down Over 1 Mil Bbls STZ's beer division will decline for the first time since 2009, based on STZ's own guidance. Revised guidance anticipates 2-4% rev decline in fiscal yr. STZ will likely lose around 1 mil bbls in volume in this fiscal yr, possibly over 1.5 mil bbls. These are numbers not seen before. STZ decline in 2025 even more striking since it's been on such a tear, especially in the last 5 yrs.Compare to Outsized Growth Last 5 Yrs Beer division revs up nearly $3 bil, more than 50% to $8.5 bil and oper income up $1.15 bil to $3.4 bil last 5 fiscal yrs (2020-2025). At high end of its guidance for fiscal 2026, STZ beer revs would be off more than $170 mil (-2%) and at low end down more than $340 mil (-4%). Co gained ~$700 mil in revs per yr between fiscal 2022-2024, before slowing. Meanwhile oper income will be off $238 mil at low end of guidance (-7%) and $306 mil (-9%) at higher end of range (-9%). What's revised guidance mean for volume? STZ typically sez its pricing will be up 1-2% and rev per bbl up 1.6% in fiscal first qtr. Assuming ~1.5% increase for fiscal yr, given guidance, at higher end, STZ volume would still be off 1.1 mil bbls, 3.5%, and at low end of range -1.7 mil bbls, off 5.5%. This from a company that gained 8.7 mil bbls last 5 yrs, averaging over 1.7 mil bbls of growth a year. That's a big swing.Hispanic Consumer "Weaker";"People Are Not Going Out," "Not Having Events in Their Homes" Trends for Hispanic consumers are "weaker" than for general population, ceo Bill Newlands said at Barclay's 18th Annual Global Consumer Staples Conference, with 80% "concerned" about "socioeconomic factors" and 75% "concerned about their personal finances." And "what that's translated to is people are not going out" (on-premise) and "not having events in their homes" (off-premise). "The issue is&hellip;the occasions in which products are consumed are pretty radically down, and that's been the biggest challenge."Ongoing Areas Of Outperformance Still, STZ mgt pointed to several areas of outperformance. It gained share in 49 of 50 states (with IL as the lone exception), up 0.4 share in scan, added 30,000 shopper first shelf resets, increased distribution points by mid-single digits. Corona Sunbrew is the #1 new beer brand & #6 $$ share gainer in total beer. Pacifico and Victoria are growing double digits. Yet even with all that's going right, STZ's softer trend now looks more like category. Is that simply because of Hispanic consumer? When will it change?Street More Skeptical; But Brands "Not Broken" Long a Wall St darling, analysts are becoming more skeptical. Bank of America put out a rare "underperform" rating on STZ the week before Labor Day. And CITI correctly warned a revision in guidance was coming. After it happened, CITI chimed in again: "the magnitude was much worse than expected&hellip;. While on the surface, the new guidance seems de-risked, we continue to worry about the long-term top-line margin trajectory." Bernstein's Nadine Sarwat countered "we do not believe Constellation's brands are broken. There is no denying the pressured position it is in today. It is feeling outsized external shocks from a core Hispanic consumer that is socializing/shopping less on immigration fears and is economically pressured. Yet it continues to outgrow the market," if by less. "Many of the challenges (and potential solutions) facing Constellation today are in the hands of the Oval Office." STZ stock is down 40% in the past year. Mkt cap now down below $26 bil. Recall, Warren Buffett's Berkshire Hathaway invested over $2 bil for a 6.6% stake, but that hasn't worked out so far.

Constellation Reduced Rev and Earnings Guidance; Stock Sank 9-10% in 2 Days; What's It Mean?

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