05:03 PM EDT, 10/06/2025 (MT Newswires) -- Constellation Brands ( STZ ) late Monday reported better-than-expected fiscal second-quarter results even as the Modelo brewer's beer business faced volume headwinds.

Adjusted earnings per share declined to $3.63 for the three-month period ended Aug. 31 from $4.32 the year before, but surpassed Wall Street's view of $3.38. Net sales fell 15% year over year to $2.48 billion, ahead of the average analyst estimate of $2.46 billion.

Beer revenue dropped 7% to $2.35 billion, weighed down by a 8.7% decline in shipments. The volume decline reflected "socioeconomic headwinds affecting consumer demand, along with distributor inventory rebalancing during the quarter," Constellation said.

Along with Modelo, Constellation is the parent company of several brands including Corona and Victoria beers and Kim Crawford wines.

Most investors were bracing for a challenging quarter for the beer division, with data pointing to "a sluggish category backdrop," UBS Securities said in a report last week.

Sales of wine and spirits plunged 65% to $136 million in the second quarter as shipments sank 76% due to the divestiture of the Svedka vodka and some wine brands. The division's performance also reflected "changes in financial and volume related distributor contractual obligations," Constellation said.

The company affirmed its comparable earnings guidance of $11.30 to $11.60 a share for fiscal 2026. The current consensus on FactSet is for $11.49. Constellation continues to expect a 4% to 6% drop in enterprise organic sales.

Consolidated revenue trends could improve on easier comparisons looking out to calendar year 2026, but investors are expected to remain conscious as favorable comparison has failed to accelerate growth across much of the staples category over the last 12 to 18 months, according to the UBS report.

Constellation's shares were up 3.1% in after-hours trade.