Constellation Brands’ wine and spirit business hurts outlook

Constellation Brands’ portfolio of popular Mexican beers may not be enough to offset its shrinking wine and spirits sector. 

Constellation Brands reported earnings on Friday, beating analyst estimates for its sales and net income but lowering its outlook, which appeared to spook investors, sending the stock down 4% in premarket trading. Booze stocks have generally underperformed as consumer preferences change, though Constellation Brands has done better than its peers thanks to its Mexican beers.

The company, which sells the likes of Modelo, Pacifico, and Corona in the US, has benefited from changing consumer preferences for imported beer. But overall consumers are drinking less alcohol, hurting its wine and spirits business, which includes some lesser-known tequila and whiskey brands.