Constellation Brands Inc. (NYSE: STZ) —most recognized for Modelo Especial, Corona Extra, Pacifico, and Robert Mondavi—continues to be heavily focused on beer as it approaches its fiscal Q1 earnings report (February fiscal year) on Wednesday, July 2, 2025. Analysts anticipate an EPS of $3.33 along with $2.56 billion in revenue, which is a significant decrease from $4.80 and $2.66 billion a year prior—a 31% earnings decline and a 4% sales drop. Historically, STZ has decreased after earnings 60% of the time, with a typical one-day decrease of 3.3% and a maximum drop of 17%.
In the fiscal year ending February 28, beer represented 84% of sales, equating to $8.5 billion. The beer segment enjoyed a 40% operating margin, which is double that of wine and spirits. The company’s recent divestiture reflects its emphasis on premium products. Sales in the fourth quarter experienced a modest increase of 1% to $2.2 billion, but cost reductions contributed to a 6% boost in operating income. Management has also revised its medium-term revenue growth prediction to 2%–4%, down from 6%–8%. With more than 98% of sales generated in the U.S., emerging tariffs may pressure margins or reduce demand if price increases are required. Notably, the company boasts a current market capitalization of $30 billion. Revenue generated during the past twelve months was $10 billion, with operating profits amounting to $350 million and a net income of $-81 million.
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Historical Odds Of Positive Post-Earnings Return
Insights on one-day (1D) post-earnings returns:
- There have been 20 recorded earnings data points over the past five years, with 8 positive and 12 negative one-day (1D) returns noted. Overall, positive 1D returns occurred approximately 40% of the time.
- This percentage, however, drops to 33% if we analyze data from the last 3 years instead of 5.
- The median for the 8 positive returns is 1.8%, while the median for the 12 negative returns is -3.3%
Additional information regarding the observed 5-Day (5D) and 21-Day (21D) returns post earnings is summarized along with the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively lower-risk strategy (though not effective if the correlation is weak) is to comprehend the correlation between short-term and medium-term returns following earnings, identify a pair that exhibits the highest correlation, and execute the appropriate trade. For instance, if 1D and 5D indicate the highest correlation, a trader can position themselves “long” for the following 5 days if the 1D post-earnings return is positive. Below is correlation data derived from 5-year and 3-year (more recent) historical information. Please note that the correlation 1D_5D pertains to the relationship between 1D post-earnings returns and subsequent 5D returns.
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