Beers, wine and spirits producer Constellation Brands (STZ:NYSE) is suffering from a nasty hangover with its shares down almost 40% over one year amid concerns over a tough macro environment for its core Hispanic consumer.

Also weighing on sentiment are worries over the impact of Trump’s tariffs on the business, which makes beers in Mexico, not to mention a beer growth outlook downgrade and concerns over the potential demand hit from heightened awareness of the risks of alcohol use on health.

Given this downbeat backdrop, investors will be seeking reassurance that the earnings outlook hasn’t deteriorated when the Berkshire Hathaway (BRK.B:NYSE) backed company behind Corona beer, Casa Noble tequila and Modelo Especial Mexican lager delivers first-quarter earnings on 2 July.

Positive news on Constellation’s restructuring progress and an update on the cash-generative company’s share buyback programme from Constellation would go down well with investors and might trigger a share price rally.

At the fourth-quarter results on 9 April, Constellation Brands reduced its beer sales forecast from 7% to 9% to 2% to 4% annually, with management citing the elevated macro pressures affecting the group’s core Hispanic consumers given their lower income skew and stricter US immigration policies.

Since then, the drinks giant has completed the sale of its mainstream wine brands and repositioned its wine portfolio towards higher growth, higher margin offerings. CEO Bill Newlands says the focus in wine is now ‘exclusively on the higher-end that more closely aligns to consumer-led premiumisation trends which we believe will enable us to help deliver improved performance within this segment of our business over time’.

US UPDATES OVER THE NEXT 7 DAYS

QUARTERLY RESULTS

30 June: Barnes & Noble

1 July: Constellation Brands

2 July: Levi Strauss & Co

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