Beer giant cuts profit forecast as sales dip

Constellation Brands, the company behind popular beers like Modelo and Corona, has lowered its profit expectations for the year. This comes after seeing a drop in sales due to a tough economy. The company had already warned in April that higher U. S. beer tariffs would hurt sales and consumer demand. Now, they expect their earnings per share to be between $11. 30 and $11. 60, which is lower than their previous estimate of $12. 60 to $12. 90. The news caused the company's stock to fall about 8% before the market opened. Constellation is set to discuss these changes at the Barclays Global Consumer Staples Conference later in the day. The CEO, Bill Newlands, said that the economy has made consumers more cautious about their spending. He noted that people are buying less high-end beer and making fewer trips to the store. Constellation also expects their overall sales to decrease by 4% to 6%, which is a change from their earlier prediction of a slight increase or decrease. This drop is mainly due to lower beer sales, which are expected to fall by 2% to 4%. The company also lowered its free cash flow estimate from $1. 5 to $1. 6 billion to $1. 3 to $1. 4 billion. Newlands mentioned that the company is still focused on its goals, like increasing distribution and investing in its brands. He also pointed out that there has been a decrease in demand from Hispanic consumers, which the company has noticed for several months. This trend is more significant than the general market decline. The company has been trying to make up for these losses. In April, they announced plans to divest from "mainstream" wines and authorized a share repurchase program. So far, they have bought back $604 million worth of shares in the first half of the fiscal year under their three-year $4 billion authorization.