Constellation Brands, Inc. Q2 FY26 Earnings Analysis

- The company expects to return to growth beyond FY ’27, viewing current headwinds as more cyclical than structural. (Page 6) - Beer volumes have grown from roughly 280 million cases to over 400 million cases under current leadership. (Page 8) - Pacifico is identified as a continuing and critically important growth driver, with expanding consumer reach across the U.S. (Page 6) - Modelo continues to show strength and growth potential, both within core Hispanic consumers and the broader market. (Page 6) - Marketing investments are increasing, especially around high-end light beer brands, Pacifico, Victoria, and major events like the World Cup, to support growth. (Page 5) - Limited visibility and cautious consumer behavior impact near-term outlook, but there is confidence in momentum building for long-term growth. (Page 2) - No detailed guidance beyond FY ’27 provided at this time. (Page 6)

- No specific guidance beyond fiscal year 2027 is provided at this time, reflecting continued uncertainty and limited visibility. (Page 7) - The company expects to return to growth beyond FY '27, viewing current headwinds as more cyclical than structural. (Page 6-7) - Operating margins in beer are expected in the 37%-38% range for FY '27, down from prior guidance, influenced by costs related to new capacity (Veracruz brewery) and marketing investments; possibility to return to 40% margin range is not confirmed and likely beyond FY '27. (Page 3) - Wine and spirits target margins remain a medium-term goal in the low 20% range, though achieving this will take longer due to ongoing headwinds and category softness. (Page 8) - Incremental investments in marketing, notably behind brands such as Pacifico and Victoria, aim to drive long-term profitable growth. (Page 6) - Capital expenditures are being managed modularly with an emphasis on financial discipline and shareholder returns; no significant near-term increases expected. (Page 7)

- Constellation Brands maintained disciplined capital allocation, continuing capex at levels important for long-run growth. - FY ’26 saw significantly less CapEx spend than initially expected; this trend of managed, possibly delayed or avoided investment will continue. - Capital investments are aligned with growth expectations, timing capacity additions modularly, sometimes planning years ahead. - New brewery in Veracruz expected to come online mid-FY ’27, causing some fixed-cost absorption headwinds but supporting future growth. - Continued investment in marketing, especially behind high-end light beer brands, World Cup campaigns, and growth brands like Pacifico and Victoria. - The company is not providing CapEx guidance beyond FY ’27 but expects eventual return to growth as current headwinds are more cyclical than structural.

- The transcript does not mention any plans for new fundraising through debt or equity. - The company highlighted strong cash generation and continued returning capital to shareholders, including over $900 million returned last year. - They emphasized disciplined capital allocation, continuing dividend payments, and investments aligned with long-term growth. - No specific references to issuing new debt or equity were made during the call. - The focus is on managing capital spending carefully given uncertainties, but maintaining financial discipline. - Overall, no indication of upcoming fundraising activities through debt or equity was provided in this earnings call.

The transcript does not provide specific details regarding current or expected orderbook or pending orders for Constellation Brands. However, some relevant insights include: - Limited visibility and volatility in consumer demand are noted for the fiscal year, impacting outlook and growth expectations. - The company expects a modular approach to capacity additions, managing capital expenditures cautiously. - No specific guidance is provided beyond fiscal '27 for growth or orderbook. - Inventory destocking with distributors will happen throughout the year rather than in a single event. - The emphasis is on maintaining discipline in capital allocation amid uncertain outlooks. In summary, no exact orderbook or pending orders data are disclosed in this call.