Constellation Brands will write down the value of its wine and spirits business and take up to a $2.5 billion (€2.275 billion) charge in the current quarter, the Corona beer maker said, following several quarters of weak demand in the U.S.
The company also trimmed its annual enterprise net sales growth to between 4% and 6%, from 6% to 7% earlier, as retailers reduce stocking wine and spirits and consumers pare back spending on pricier alcoholic beverages.
Shares of the company, which is expected to report second-quarter results on Oct. 3, were unchanged in early trading.
First-Quarter Performance
In July, Constellation Brands topped Wall Street estimates for first-quarter profit on resilient demand for its beers such as Modelo Especial and Pacifico, as well as higher pricing.
The company expects a goodwill charge of about $1.5 billion (€1.365 billion) to $2.5 billion (€2.275 billion) in the second quarter related to the wine and spirits business.
Constellation Brands lowered its fiscal 2025 reported earnings per share estimates to a range of $3.05 (€2.78) to $7.92 (€7.21), from $14.63 (€13.31) to $14.93 (€13.59) earlier.
It raised the lower end of its annual adjusted earnings per share by 10 cents (€0.09) to $13.60 (€12.38) while maintaining the upper end at $13.80 (€12.57).
Wine and Spirits annual net sales is expected to decline between 6% and 4%, compared with a fall of 0.5% to a rise of 0.5% expected earlier.
Global Headquarters
Earlier this year, Constellation Brands officially opened its new global headquarters at the Aqueduct Building campus, located at 50 East Broad Street in downtown Rochester, New York. The company relocated to the 170,000-square-foot riverfront campus at the start of June.
The newly renovated campus is designed to support a mix of hybrid and remote working arrangements, reflecting modern workplace trends.
