STZ · 8-K · 20261006PR000039

Operating Margin Drivers

CONSTELLATION BRANDS, INC. · 2026-10-06 · Importance 24 · Surprise 14

Reported second-quarter operating income decreased 8% to $805 million, and operating margin fell to 30.6% from 35.2%; comparable operating income increased 1% to $896.6 million. Beer operating income increased 1% to $964.2 million, while its margin contracted 160 basis points to 39.0% as marketing and other SG&A spending outweighed lower tariff expense and favorable fixed-cost absorption. Wine and Spirits moved from a $19.8 million operating loss to $6.1 million of operating income, with margin improving to 3.8% through U.S. tariff recoveries and lower marketing and SG&A costs from optimization and restructuring initiatives.

Key facts

• For Q2 FY2027, Constellation’s reported operating margin was 30.6%, compared with 35.2% in Q2 FY2026. source
• Beer Business operating margin declined 160 basis points to 39.0% in Q2 FY2027; lower tariff expenses and favorable fixed-cost absorption were more than offset by increased marketing investment and other SG&A spending. source
• For Q2 FY2027, Constellation’s comparable operating margin was 34.1%, compared with 35.7% in Q2 FY2026. source
• Wine and Spirits Business operating margin improved to 3.8%, driven by U.S. tariff recoveries in cost of goods sold and marketing and other SG&A savings from optimization and restructuring initiatives. source