Constellation Brands Reports 2% Net Sales Increase to $10.21 Billion for Fiscal Year 2025

Constellation Brands, Inc. reported a consolidated net sales increase of 2% for the fiscal year ending February 28, 2025, reaching $10.21 billion, compared to $9.96 billion in the previous fiscal year. The beer segment was a significant contributor, with net sales rising to $8.54 billion from $8.16 billion, driven by shipment volume growth and favorable pricing. However, the wine and spirits segment saw a decline, with total sales dropping to $1.67 billion from $1.80 billion, primarily due to decreased shipment volumes and ongoing challenges in the U.S. wholesale market.

The company faced substantial operational challenges, resulting in an 89% decrease in operating income, which fell to $354.9 million from $3.17 billion in the prior year. This decline was largely attributed to impairments totaling $2.80 billion related to goodwill and intangible assets in the wine and spirits segment, as well as an impairment of assets held for sale. Despite these setbacks, the beer segment's operating income increased by 10% to $3.39 billion, reflecting effective cost-saving initiatives and improved margins.

Strategically, Constellation Brands has been active in reshaping its portfolio. In April 2025, the company announced a definitive agreement to divest a portion of its wine and spirits business for $900 million, focusing on higher-end brands to align with consumer-led premiumization trends. Additionally, the company completed the divestiture of the SVEDKA brand in January 2025, generating $409.2 million in cash proceeds. The company also made investments in higher-end brands, including the acquisition of Sea Smoke, a luxury wine brand, for $158.7 million.

Operationally, Constellation Brands reported a workforce of approximately 10,600 employees as of February 28, 2025, with plans to optimize its organizational structure through the 2025 Restructuring Initiative, expected to yield over $200 million in annualized cost savings by fiscal 2028. The company is also focusing on expanding its production capacity in Mexico, with planned expenditures of approximately $2 billion from fiscal 2026 to fiscal 2028 to support growth in its high-end beer brands.

Looking ahead, Constellation Brands anticipates continued challenges in the wine and spirits segment due to market conditions and consumer preferences. The company expects to navigate these challenges through strategic divestitures and a focus on premiumization, while maintaining its leadership position in the U.S. beer market. The outlook for fiscal 2026 includes expectations for improved performance in the wine and spirits segment as the company aligns its portfolio with evolving consumer trends.