Constellation Brands reported a strong first quarter of its 2025 fiscal year, with $2.662 billion in reported net sales, a +6% increase compared to the same quarter last year, according to its Q1 earnings report.
The company’s beer division – which makes and sells Mexican imports Modelo, Corona, Pacifico and Victoria to the U.S. market – recorded volume gains in both shipments (sales to wholesalers) and depletions (sales to retailers) during the quarter, which included the three months ending May 31.
“Our beer business continued to achieve strong volume growth well above that of its category and total beverage alcohol,” CEO BIll Newlands said in a press release. “This outstanding performance supported the second largest dollar share gain within the broader beverage industry and reinforced our significant growth outperformance relative to the entire CPG sector.”
Constellation shipped 115.1 million case equivalents (CEs) in Q1 2025, an increase of +7.6% compared to Q1 2024. The beer division’s net sales in the quarter increased +8%, to $2.272 billion.
Depletions increased +6.4%, excluding volume related to Constellation’s divestment of the remainder of its craft division. The company announced it sold craft brands Funky Buddha and Four Corners back to their respective founders in May 2023.
Highlights from the beer division’s Q1 performance include:
- Modelo Especial increased depletions +11% and “accelerated its growth in tracked channels and remained the No. 1 brand share gainer and No. 1 brand across the whole U.S. beer category in dollar sales;”
- Pacifico increased depletions +21%, “continued to grow rapidly and was the No. 4 dollar share gainer across the overall beer category;”
- The Modelo Chelada brand family increased depletions +5% and “sustained solid momentum as Modelo Chelada Limon y Sal was a top 10 overall dollar share gainer in the U.S. beer market;”
- Constellation’s beer brands were the top dollar share gainer for the 11th consecutive quarter in Circana-tracked retailers;
- The company was the top volume share gainer in Circana-tracked retailers in Q1.
“Our dollar sales and volume growth outpaced the total beer category by 7.8 and 8.6 percentage points, respectively, and the high-end segment by 5.6 and 6 percentage points, respectively,” Constellation wrote in a press release.
Constellation is projecting +7% to +9% net sales growth and +10% to +12% operating income growth for its beer division in FY 2025.
Constellation’s wine and spirits business – which includes brands such as Kim Crawford, Robert Mondavi Private Selection, Meiomi, Svedka, High West and Casa Noble – recorded declines in shipments (-5.1%) and depletions (-12.7%). Net sales declined -7%, to $389 million.
The wine and spirits division’s fiscal guidance for FY 2025 was reaffirmed at -0.5% to +0.5% in net sales and -9% to -11% in operating income, which is “inclusive of commercial and operational initiatives underway to address broader market headwinds,” Constellation wrote.
Overall, Constellation’s FY 2025 guidance includes net sales growth of +6% to +7% and operating income growth of +10% to +12% (reported) and +8% to +10% (comparable).
Constellation was the second largest beer category vendor in multi-outlet grocery, mass retail and convenience stores (MULO+C) year-to-date through June 16, according to Circana. Its dollar sales increased +7.9%, to $3.83 billion, and volume (measured in case sales) increased +6.9%.
Circana’s June report marked the second consecutive month that Constellation had pushed Molson Coors out of its long-held No. 2 beer category vendor spot.
The company’s performance was no surprise to Wall Street analysts:
“The title writes itself at this point … strong beer partially offset by weak wine and spirits,” Bernstein analyst Nadine Sarwat wrote in a report of Constellation’s quarter, adding that its beer depletions were “a touch light.”
Look for further Brewbound coverage of Constellation’s Q1 earnings conference call following the July 4 holiday.