(Reuters) – Corona and Modelo owner Constellation Brands cut its annual sales forecast on Friday as persistently sticky inflation dents consumer spending on beers, wines and spirits.
The company now expects annual net sales to grow 2% to 5%, compared with its previous forecast of 4% to 6% growth.
“Given near-term uncertainty on when consumers will revert to more normalized spending, we have prudently lowered our growth outlook,” CEO Bill Newlands said.
Beer, which is Constellation’s major revenue driver, saw a mere 3.2% rise in depletion growth, or the rate at which products are sold, in the third quarter, compared with an 8.2% growth last year.
Overall demand for alcoholic beverages and spirits has also come under pressure as more people opt for low-calorie and lighter liquors.
The company expects adjusted profit per share for fiscal 2025 to be between $13.40 and $13.80, compared with its previous forecast of between $13.60 and $13.80 per share.
Shares of the company were down about 2% in premarket trading on Friday. They fell about 9% in 2024.
Last month, the company said it would sell its Svedka vodka brand to New Orleans-based Sazerac.
Last week, Constellation stock dipped after the U.S. Surgeon General said alcoholic drinks should carry a warning about cancer risks on their label, signaling a shift toward tobacco-style regulation for liquor and casting further gloom on the industry.
For the third quarter ended Nov. 30, the company reported net sales of $2.46 billion, below estimates of $2.53 billion, while adjusted earnings per share of $3.25, missed estimates of $3.31 per share, according to data compiled by LSEG.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Anil D’Silva)
