America's most popular beer maker cuts fiscal outlook as Trump's immigration crackdown hits demand

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America's most popular beer maker cuts fiscal outlook as Trump's immigration crackdown hits demand

Brooke DiPalmaSeptember 2, 2025 at 7:22 PM

Constellation Brands (STZ) stock fell 7% on Tuesday after the Modelo and Corona owner cut its fiscal year outlook and said in a statement that declines in high-end beer sales to Hispanic consumers "were more pronounced than general market declines."

This is now the second warning from the company suggesting that President Trump's immigration crackdown is having an impact on demand. Constellation Brands' core Hispanic consumer base makes up about half of its business, CEO Bill Newlands said on a call with investors in July.

Modelo Especial has been the bestselling beer in the US since it overtook Bud Light (BUD) for the top spot in 2023.

The company now expects fiscal year 2026 net beer sales to decline 2% to 4%, below its previous forecast of flat to 3% sales growth, due to "incremental macroeconomic headwinds affecting consumer demand."

"We continue to navigate a challenging macroeconomic environment that has dampened consumer demand and led to more volatile consumer purchasing behavior since our first quarter of fiscal 2026," Newlands wrote in the release, adding that consumers are making fewer trips to buy beer and are spending less when they do.

The company also cut its expectations for comparable earnings per share. For the full year, earnings are expected to be in the range of $11.30 to $11.60, down from the previous range of $12.60 to $12.90.

Newlands previously told investors that "occasions on which beer is consumed have decreased [by Hispanic consumers]. ... [They're] not going out to eat as much as they had, [and] they're having less social occasions at home."

"A lot of Hispanic consumers are apprehensive to leave their house or ... deviate from their routine or go out," Dave Williams of Bump Williams Consulting told Yahoo Finance earlier this year. "That results in fewer opportunities and occasions where beer would slot into the mix."

Williams added, "The abruptness of this slowdown ... makes me feel like there's a lot more of it tied to the cyclical aspect of these consumer behaviors due to the recent ICE raids or deportation scares ... on top of the other structural aspects that beer brands [face] in general."

A customer places a case of Corona Extra on the checkout counter for purchase at Susquehanna Beer and Soda in Marysville, Pa., on April 1, 2010. (AP Photo/Carolyn Kaster, File) ()

The beer industry overall is facing significant pressure as Americans drink less alcohol.

Only 54% of drinking-age Americans consume alcohol today, according to a recent poll from Gallup, the lowest proportion since the survey began in 1939. Even those who do drink are partaking less by a factor of nearly half.

"The industry has never faced as much pressure as it does today," Bottle Raiders vice president of marketing Amanda Paul-Garnier said.

Constellation Brands took one of the hardest hits in the recent quarter as volume growth for beer shipments fell 3.3%. Competitor Molson Coors (TAP) posted an even larger decline of 7%.

Tariffs are also weighing on Constellation Brands. The company now expects operating income growth to decline 7% to 9% in the year, compared to the previously expected range of flat to 3% growth, and cited additional tariffs, lower volumes, and operating deleveraging as contributing factors.