AI Takeaway
STZ (Constellation Brands) delivered FY2026 net income of $1.69B (a dramatic swing from a prior-year loss of $81.4M) driven by a surge in operating income to $2.72B, even as total revenue declined 10.5% to $9.14B.
Revenue
$9.14B
-10.48% YoY
Gross Margin
51.6%
-0.51% YoY
Operating Income
$2.72B
++666.81% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Total revenue fell 10.5% YoY to $9.14B (from $10.21B), likely reflecting divestitures or reduced volume in lower-margin segments, while the company maintained a gross margin of approximately 51.6%.
Source: Source: 10-K Income Statement
Operating income jumped 666.8% to $2.72B from $354.9M in the prior year, pushing operating margin from 3.5% to 29.8% — a 26.3 percentage point improvement that suggests significant one-time charges or impairments weighed on the prior year.
Source: Source: 10-K Income Statement
Net income swung to $1.69B in FY2026 from a net loss of $81.4M in the prior year, a 2,172% improvement, reflecting the absence of prior-year write-downs and stronger core operating performance.
Source: Source: 10-K Income Statement
2 more insights available
Upgrade to unlockSTZ carries $10.30B in long-term debt against stockholders' equity of $8.08B, resulting in a debt-to-equity ratio of 1.67. This elevated leverage constrains financial flexibility and increases vulnerability to rising interest rates or revenue shortfalls. Debt service obligations could limit future investment capacity or shareholder returns.
Source: Source: 10-K Balance Sheet
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Upgrade to unlockReported EPS of $1.90 versus the $1.74 analyst consensus — a +9.5% beat for FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $9.14B | $10.21B | -10.48% |
Cost of Revenue | $4.43B | $4.89B | -9.53% |
Gross Profit | $4.71B | $5.31B | -11.35% |
Operating Income | $2.72B | $354.9M | +666.81% |
Net Income | $1.69B | $-81.4M | +2172.11% |
SG&A Expense | $1.85B | $1.95B | -5.21% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $21.9B | $21.65B | +1.15% |
Current Assets | $2.91B | $3.72B | -21.80% |
Total Liabilities | $13.51B | $14.52B | -6.92% |
Current Liabilities | $2.69B | $4.04B | -33.34% |
Stockholders' Equity | $8.08B | $6.88B | +17.44% |
Cash & Equivalents | $102.4M | $68.1M | +50.37% |
Long-Term Debt | $10.3B | $10.69B | -3.69% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $2.67B | $3.15B | -15.33% |
Investing Cash Flow | $16.5M | $-974.8M | +101.69% |
Financing Cash Flow | $-2.66B | $-2.26B | -17.43% |
Share Buybacks | $924.1M | $1.12B | -17.77% |
D&A | $420M | $447M | -6.04% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 51.6% | 52.1% | -0.51% |
Operating Margin | 29.8% | 3.5% | +26.30% |
Net Margin | 18.5% | — | — |
ROE | 20.9% | — | — |
ROA | 7.7% | — | — |
Current Ratio | $1.08 | — | — |
Debt to Equity | $1.672 | — | — |
STZ delivered strong Q1 FY2027 results with net income surging 26.7% YoY to $653.8M, driven by a 390 bps gross margin expansion to 54.3% and significant cost discipline, even as revenue dipped 3.3% to $2.43B.
STZ's Q3 FY2026 results show a decline in revenue and net income, with significant cash flow changes and a strong increase in cash reserves.
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STZ's FY2026 results showed a dramatic profitability recovery, with net income swinging to $1.69B from a prior-year loss of $81.4M and operating margin expanding to 29.8% from just 3.5%. However, revenue declined 10.5% to $9.14B, suggesting the company is reshaping its portfolio. The balance sheet also improved, with total liabilities falling 6.9% and stockholders' equity growing 17.4% to $8.08B.
STZ's revenue declined 10.5% YoY to $9.14B from $10.21B in FY2025, which likely reflects divestitures of lower-margin business segments or volume reductions in certain product categories. Despite the revenue decline, gross margin remained stable at approximately 51.6%, suggesting the remaining portfolio maintains strong pricing power. The exact drivers would be detailed in the MD&A section of the 10-K filing.
STZ's operating income surged 666.8% to $2.72B from just $354.9M in the prior year, pushing operating margin from 3.5% to 29.8%. This dramatic improvement strongly suggests the prior fiscal year was burdened by large non-recurring charges such as impairments, write-downs, or restructuring costs that are absent in FY2026. The underlying business appears to generate operating margins in the high-20% range when stripped of one-time items.
STZ carries $10.30B in long-term debt, resulting in a debt-to-equity ratio of 1.67, which remains elevated but is improving as the company generated $2.67B in operating cash flow and reduced total liabilities by 6.9%. Cash on hand is very low at $102.4M, and the current ratio of 1.08 provides only a slim liquidity buffer. The company also returned $924.1M to shareholders via buybacks while continuing to reduce debt.
Yes, STZ made meaningful progress on deleveraging in FY2026, with long-term debt declining 3.7% to $10.30B from $10.69B and total liabilities falling 6.9% to $13.51B. Stockholders' equity simultaneously grew 17.4% to $8.08B, improving the overall leverage profile. Financing activities used $2.66B in cash, reflecting a combination of debt repayment and $924.1M in share repurchases.