How Trump’s Deportations Are Impacting Constellation Brands’ Beer Sales

Constellation Brands (STZ), known for beers like Modelo, Corona, and Pacifico, reported a 2% drop in beer sales last quarter. Interestingly, CEO Bill Newlands had previously noted that many Hispanic consumers, who make up about half of Constellation’s beer customer base, are cutting back on their spending. He attributed this decline partly to economic fears linked to President Donald Trump’s immigration policies, which may threaten jobs in industries with high Latino employment.

In addition, on the latest earnings call, Newlands said that immigration raids by U.S. authorities are creating uncertainty in consumer behavior but stopped short of directly blaming Hispanic shoppers for the sales slowdown. However, beyond immigration concerns, inflation and general cost pressures are also weighing on demand and affecting both Hispanic and non-Hispanic customers. These broader economic worries are making it harder for Constellation to predict how consumers will behave.

Nevertheless, despite the dip in beer sales and increased aluminum costs, which are partly driven by tariffs, the company reaffirmed its full-year financial outlook. This shows that Constellation is confident in meeting its targets even in a challenging environment. It is also worth noting that Constellation isn’t alone in facing pressure from a pullback in Hispanic consumer spending. Indeed, other major companies, such as Coca-Cola (KO) and Colgate-Palmolive (CL), have also reported slower sales in the U.S. due to reduced spending by Latino shoppers.

Is STZ Stock a Good Buy?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on STZ stock based on 11 Buys, seven Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average STZ price target of $198.18 per share implies 15% upside potential.

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