Bottles of Corona beer, the flagship model of Grupo Modelo are displayed on this illustration taken in Monterrey, Mexico, February 18, 2025.
Daniel Becerril | Reuters
President Donald Trump’s tariffs aren’t the one presidential coverage that’s weighing on Constellation Manufacturers.
Together with tariffs on Mexican imports, his hardline immigration stance can also be hurting the corporate’s beer gross sales as Hispanic customers within the U.S. spend much less, Constellation CEO Invoice Newlands informed analysts on the corporate’s convention name on Thursday.
Roughly half of Constellation’s beer gross sales come from Hispanic customers, though the corporate is promoting extra brews partly due to its advertising technique. Constellation’s outreach to non-Hispanic beer drinkers has boosted its gross sales and helped Modelo Especial develop into the top-selling U.S. beer.
Nonetheless, Hispanic customers stay integral to Constellation’s beer gross sales, which accounted for 78% of its complete income in its fiscal fourth quarter.
“The actual fact is, quite a lot of customers within the Hispanic neighborhood are involved proper now … Over half are involved relative to immigration points and the way these impression [them]. Numerous them are involved about job losses in industries which have a excessive Latino employment base,” Newlands stated.
Because of this, Hispanic customers within the U.S. have pulled again their spending on eating places, clothes and journey, based on Newlands.
“Beer is sort of a methods down the record, nevertheless it’s definitely on the record as a result of issues like social gatherings, an space the place the Hispanic shopper usually consumes beer, are declining as we speak,” Newlands stated.
On Wednesday, Constellation gave a weaker-than-expected outlook for its fiscal 2026 and slashed its medium-term forecast. The projections included the impression of the brand new tariffs. Whereas Trump briefly lowered the tariff price on so-called reciprocal tariffs on each nation besides China on Wednesday, Constellation’s canned beer imported from Mexico continues to be topic to aluminum tariffs of 25%.
Constellation’s disappointing forecast was offset by the corporate’s better-than-expected earnings and income for the quarter. The corporate additionally introduced on Wednesday that it’s divesting its cheaper wines to deal with pricier manufacturers.
Shares of Constellation fell lower than 1% in afternoon buying and selling on Thursday. The inventory has fallen greater than 23% since Trump’s election final yr.
