stz-20260831

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_____________to_____________

Commission File Number: 001-08495

CONSTELLATION BRANDS, INC.

(Exact name of registrant as specified in its charter)


Delaware			16-0716709
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

50 East Broad Street, Rochester, New York 14614

(Address of principal executive offices) (Zip code)

(585) 678-7100

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Class A Common Stock	STZ	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

There were 169,198,487 shares of Class A Common Stock and 25,733 shares of Class 1 Common Stock outstanding as of September 30, 2026.

Table of Contents

TABLE OF CONTENTS


		Page

DEFINED TERMS		i

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets		1
Consolidated Statements of Comprehensive Income (Loss)		2
Consolidated Statements of Changes in Stockholders’ Equity		3
Consolidated Statements of Cash Flows		5
Notes to Consolidated Financial Statements
	1. Basis of Presentation	7

	2. Restructuring	7
	3. Inventories	8


	4. Derivative Instruments	8
	5. Fair Value of Financial Instruments	11
	6. Goodwill	14
	7. Intangible Assets	15



	8. Borrowings	15
	9. Income Taxes	17


	10. Stockholders' Equity	19
	11. Net Income (Loss) Per Common Share Attributable to CBI	20
	12. Comprehensive Income (Loss) Attributable to CBI	21
	13. Business Segment Information	24
	14. Accounting Guidance Not Yet Adopted	27

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
Item 3. Quantitative and Qualitative Disclosures About Market Risk		49
Item 4. Controls and Procedures		50

PART II – OTHER INFORMATION
Item 1. Legal Proceedings		51

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		52
Item 5. Other Information		52
Item 6. Exhibits		52

SIGNATURES		56

This Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those set forth in, or implied by, such forward-looking statements. For further information regarding such forward-looking statements, risks, and uncertainties, please see “Information Regarding Forward-Looking Statements” under MD&A.

Market positions and industry data discussed in this Form 10-Q are for the 52-weeks ending August 31, 2026.

Table of Contents

DEFINED TERMS

Unless the context otherwise requires, the terms “Company,” “CBI,” “we,” “our,” or “us” refer to Constellation Brands, Inc. and its subsidiaries. We use terms in this Form 10-Q and in our Notes that are specific to us or are abbreviations that may not be commonly known or used.


TERM						MEANING
$						U.S. dollars

10b5-1 Trading Plan						a pre-arranged trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act

2025 Authorization						authorization to repurchase up to $4.0 billion of our publicly traded common stock, approved by our Board of Directors in April 2025

2025 Credit Agreement						eleventh amended and restated credit agreement, dated as of April 28, 2025, that provides for a $2.25 billion aggregate revolving credit facility

2025 Restructuring Initiative						an enterprise-wide cost savings and restructuring initiative designed to help optimize the performance of our business, including through enhanced organizational efficiency and optimized expenditures across our organization, with the majority of the work executed within Fiscal 2026 and net annualized cost savings expected to be fully realized by Fiscal 2028

2025 Wine Divestitures						sale and, in certain instances, exclusive license to use the trademarks of a portion of our wine and spirits business, primarily centered around our then-owned mainstream wine brands and associated inventory, wineries, vineyards, offices, and facilities on June 2, 2025

2026 Annual Report						our Annual Report on Form 10-K for the fiscal year ended February 28, 2026

2026 Term Credit Agreement						term loan credit agreement, dated as of September 18, 2026, that provides for a $300.0 million unsecured delayed draw term loan facility

3-tier						U.S. distribution channel where products are sold to a distributor (wholesaler) who then sells to a retailer; the retailer sells the products to a consumer; however, in control states, the state government performs the role of wholesaler and retailer



3.70% December 2016 Senior Notes						$600.0 million principal amount of 3.70% senior notes issued in December 2016, now redeemed in full

4.35% May 2022 Senior Notes						$600.0 million principal amount of 4.35% senior notes issued in May 2022, now redeemed in full

4.85% May 2026 Senior Notes						$500.0 million aggregate principal amount of senior notes issued in May 2026

ABA						alternative beverage alcohol

Administrative Agent						Bank of America, N.A., as administrative agent for our senior credit facility

AOCI						accumulated other comprehensive income (loss)



Brewery Projects						modular capacity addition activities at the Nava Brewery, Obregón Brewery, and Veracruz Brewery

CB International						CB International Finance S.à r.l., a wholly-owned subsidiary of ours

CircanaTM						Industry market research publication used by consumer packaged goods companies

Class 1 Stock						our Class 1 Convertible Common Stock, par value $0.01 per share

Class A Stock						our Class A Common Stock, par value $0.01 per share

CODM						chief operating decision maker, our President and Chief Executive Officer


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Table of Contents


TERM						MEANING
Comparable Adjustments						certain items affecting comparability that have been excluded because management uses this information in monitoring and evaluating the results and underlying business trends of the core operations of the Company and/or in internal goal setting



CSR						corporate social responsibility

Customers						wholesale distributors, retailers (generally outside of 3-tier), state alcohol beverage control agencies which sell to consumers, and DTC purchasers

Depletions						represent U.S. distributor shipments of our respective branded products to retail customers, based on third-party data

DTC						direct-to-consumer inclusive of (i) a digital commerce experience for consumers to purchase directly from brand websites with inventory coming straight from the supplier and (ii) consumer purchases at hospitality locations (tasting rooms and tap rooms) from the supplier



Exchange Act						Securities Exchange Act of 1934, as amended

FASB						Financial Accounting Standards Board

Financial Statements						our consolidated financial statements and notes thereto included herein





Fiscal 2026						the Company’s fiscal year ended February 28, 2026

Fiscal 2027						the Company’s fiscal year ending February 28, 2027

Fiscal 2028						the Company’s fiscal year ending February 29, 2028

Fiscal 2029						the Company’s fiscal year ending February 28, 2029

Fiscal 2030						the Company’s fiscal year ending February 28, 2030

Fiscal 2031						the Company’s fiscal year ending February 28, 2031

Fiscal 2032						the Company’s fiscal year ending February 29, 2032

Form 10-Q						this Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2026, unless otherwise specified

IRA						Inflation Reduction Act of 2022



IT						information technology

mainstream						wine that sells less than $11.00 per bottle at retail and sparkling wine and all other wine that sells less than $13.00 per bottle at retail, as defined by Circana™

MD&A						Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part I – Item 2. of this Form 10-Q

M&T						Manufacturers and Traders Trust Company

Nava						Nava, Coahuila, Mexico

Nava Brewery						our brewery located in Nava

Net sales						gross sales less promotions, returns and allowances, and excise taxes





New Zealand Wine Divestitures						sale of eight small-scale domestic-market New Zealand mainstream wine brands and associated inventory, equipment, a winery, and vineyards in June 2026

NM						not meaningful

Non-GAAP						financial measures not calculated in accordance with U.S. GAAP, for example, comparable operating income (loss)

Note(s)						notes to the consolidated financial statements


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Table of Contents


TERM						MEANING
OB3 Act						One Big Beautiful Bill Act, signed into U.S. law on July 4, 2025

Obregón						Obregón, Sonora, Mexico

Obregón Brewery						our brewery located in Obregón

OCI						other comprehensive income (loss)

OECD						Organization for Economic Cooperation and Development

Pre-issuance hedge contracts						treasury lock and/or swap lock contracts designated as cash flow hedges entered into to hedge treasury rate volatility on future debt issuances



retailers						on- and off-premise locations that sell products to consumers

RTD						ready-to-drink

SEC						Securities and Exchange Commission

Second Quarter 2026						the Company’s three months ended August 31, 2025

Second Quarter 2027						the Company’s three months ended August 31, 2026

Section 232						tariffs imposed under Section 232 of the Trade Expansion Act of 1962, notably on aluminum and aluminum derivative product imports

Securities Act						Securities Act of 1933, as amended

Six Months 2026						the Company’s six months ended August 31, 2025

Six Months 2027						the Company’s six months ended August 31, 2026





U.S.						United States of America

U.S. GAAP						generally accepted accounting principles in the U.S.

Veracruz						Heroica Veracruz, Veracruz, Mexico

Veracruz Brewery						our new brewery being constructed in Veracruz


Constellation Brands, Inc. Q2 FY 2027 Form 10-Q			#WORTHREACHINGFOR I iii


FINANCIAL STATEMENTS			Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
(unaudited)


	August 31, 2026		February 28, 2026
ASSETS
Current assets:
Cash and cash equivalents	$	98.5	$	102.4
Accounts receivable	678.1		658.2
Inventories	1,378.6		1,433.9
Prepaid expenses and other	804.3		711.8

Total current assets	2,959.5		2,906.3
Property, plant, and equipment, net of accumulated depreciation of $3,254.7 and $3,095.1, respectively	8,653.2		8,520.9
Goodwill	5,269.3		5,233.9
Intangible assets	2,531.2		2,533.0


Deferred income taxes	1,339.3		1,370.3

Other assets	1,311.2		1,336.1
Total assets	$	22,063.7	$	21,900.5

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings	$	116.5	$	272.0
Current maturities of long-term debt	1,103.0		603.6
Accounts payable	999.4		960.2
Other accrued expenses and liabilities	744.9		854.0
Total current liabilities	2,963.8		2,689.8
Long-term debt, less current maturities	9,096.2		9,692.9

Deferred income taxes and other liabilities	1,124.3		1,130.9
Total liabilities	13,184.3		13,513.6
Commitments and contingencies
CBI stockholders’ equity:
Class A Stock, $0.01 par value – Authorized, 322,000,000 shares; Issued, 212,699,732 shares and 212,699,542 shares, respectively	2.1		2.1
Additional paid-in capital	2,185.0		2,185.7
Retained earnings	14,440.1		13,574.4
Accumulated other comprehensive income (loss)	489.5		423.2
Class A Stock in treasury, at cost, 42,893,874 shares and 39,927,096 shares, respectively	(8,529.8)		(8,103.0)
Total CBI stockholders’ equity	8,586.9		8,082.4
Noncontrolling interests	292.5		304.5
Total stockholders’ equity	8,879.4		8,386.9
Total liabilities and stockholders’ equity	$	22,063.7	$	21,900.5

The accompanying notes are an integral part of these statements.


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FINANCIAL STATEMENTS			Table of Contents

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions, except per share data)

(unaudited)


	For the Six Months Ended August 31,				For the Three Months Ended August 31,
	2026		2025		2026		2025
NET INCOME (LOSS) ATTRIBUTABLE TO CBI
Sales	$	5,407.1	$	5,331.4	$	2,816.7	$	2,653.9
Excise taxes	(341.4)		(335.4)		(183.7)		(172.9)
Net sales	5,065.7		4,996.0		2,633.0		2,481.0
Cost of product sold	(2,352.1)		(2,419.4)		(1,240.0)		(1,171.0)
Gross profit	2,713.6		2,576.6		1,393.0		1,310.0
Selling, general, and administrative expenses	(995.2)		(936.7)		(538.2)		(436.0)


Asset impairment and related expenses	(68.1)		(52.1)		(49.8)		—

Operating income (loss)	1,650.3		1,587.8		805.0		874.0
Income (loss) from unconsolidated investments	8.3		(7.0)		7.8		(3.5)
Interest expense, net	(169.2)		(186.5)		(83.4)		(87.6)

Income (loss) before income taxes	1,489.4		1,394.3		729.4		782.9
(Provision for) benefit from income taxes	(235.2)		(384.4)		(147.1)		(296.8)
Net income (loss)	1,254.2		1,009.9		582.3		486.1
Net (income) loss attributable to noncontrolling interests	(34.6)		(27.8)		(16.5)		(20.1)
Net income (loss) attributable to CBI	$	1,219.6	$	982.1	$	565.8	$	466.0

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CBI
Comprehensive income (loss)	$	1,323.9	$	1,603.1	$	740.8	$	715.0
Comprehensive (income) loss attributable to noncontrolling interests	(38.0)		(50.6)		(23.3)		(29.3)
Comprehensive income (loss) attributable to CBI	$	1,285.9	$	1,552.5	$	717.5	$	685.7

CLASS A STOCK
Net income (loss) per common share attributable to CBI – basic	$	7.12	$	5.55	$	3.32	$	2.65
Net income (loss) per common share attributable to CBI – diluted	$	7.11	$	5.55	$	3.32	$	2.65
Weighted average common shares outstanding – basic	171.323		176.804		170.460		175.821
Weighted average common shares outstanding – diluted	171.503		176.957		170.601		175.938
Cash dividends declared per common share	$	2.06	$	2.04	$	1.03	$	1.02

The accompanying notes are an integral part of these statements.


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FINANCIAL STATEMENTS			Table of Contents


CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (in millions) (unaudited)
	Class A Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Non-controlling Interests		Total
Balance at February 28, 2026	$	2.1	$	2,185.7	$	13,574.4	$	423.2	$	(8,103.0)	$	304.5	$	8,386.9

Comprehensive income (loss):
Net income (loss)	—		—		653.8		—		—		18.1		671.9
Other comprehensive income (loss), net of income tax effect	—		—		—		(85.4)		—		(3.4)		(88.8)
Comprehensive income (loss)													583.1
Repurchase of shares	—		—		—		—		(223.8)		—		(223.8)
Dividends declared	—		—		(177.9)		—		—		—		(177.9)
Noncontrolling interest distributions	—		—		—		—		—		(25.0)		(25.0)
Shares issued under equity compensation plans	—		(31.7)		—		—		23.5		—		(8.2)
Stock-based compensation	—		14.7		—		—		—		—		14.7
Balance at May 31, 2026	2.1		2,168.7		14,050.3		337.8		(8,303.3)		294.2		8,549.8
Comprehensive income (loss):
Net income (loss)	—		—		565.8		—		—		16.5		582.3
Other comprehensive income (loss), net of income tax effect	—		—		—		151.7		—		6.8		158.5
Comprehensive income (loss)													740.8
Repurchase of shares	—		—		—		—		(230.9)		—		(230.9)
Dividends declared	—		—		(176.0)		—		—		—		(176.0)
Noncontrolling interest distributions	—		—		—		—		—		(25.0)		(25.0)
Shares issued under equity compensation plans	—		(3.2)		—		—		4.4		—		1.2
Stock-based compensation	—		19.5		—		—		—		—		19.5
Balance at August 31, 2026	$	2.1	$	2,185.0	$	14,440.1	$	489.5	$	(8,529.8)	$	292.5	$	8,879.4


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FINANCIAL STATEMENTS			Table of Contents


CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (in millions) (unaudited)
	Class A Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Non-controlling Interests		Total
Balance at February 28, 2025	$	2.1	$	2,144.6	$	12,603.4	$	(662.7)	$	(7,205.4)	$	252.8	$	7,134.8
Comprehensive income (loss):
Net income (loss)	—		—		516.1		—		—		7.7		523.8
Other comprehensive income (loss), net of income tax effect	—		—		—		350.7		—		13.6		364.3
Comprehensive income (loss)													888.1
Repurchase of shares	—		—		—		—		(306.1)		—		(306.1)
Dividends declared	—		—		(180.6)		—		—		—		(180.6)
Noncontrolling interest distributions	—		—		—		—		—		(7.5)		(7.5)
Shares issued under equity compensation plans	—		(24.3)		—		—		17.4		—		(6.9)
Stock-based compensation	—		10.3		—		—		—		—		10.3
Balance at May 31, 2025	2.1		2,130.6		12,938.9		(312.0)		(7,494.1)		266.6		7,532.1
Comprehensive income (loss):
Net income (loss)	—		—		466.0		—		—		20.1		486.1
Other comprehensive income (loss), net of income tax effect	—		—		—		219.7		—		9.2		228.9
Comprehensive income (loss)													715.0
Repurchase of shares	—		—		—		—		(297.9)		—		(297.9)
Dividends declared	—		—		(179.4)		—		—		—		(179.4)
Noncontrolling interest distributions	—		—		—		—		—		(10.0)		(10.0)
Shares issued under equity compensation plans	—		(1.8)		—		—		6.6		—		4.8
Stock-based compensation	—		21.7		—		—		—		—		21.7
Balance at August 31, 2025	$	2.1	$	2,150.5	$	13,225.5	$	(92.3)	$	(7,785.4)	$	285.9	$	7,786.3

The accompanying notes are an integral part of these statements.


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FINANCIAL STATEMENTS			Table of Contents

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)


	For the Six Months Ended August 31,
	2026		2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	1,254.2	$	1,009.9
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Deferred tax provision (benefit)	26.8		277.6
Depreciation	194.4		207.9
Stock-based compensation	34.9		32.1

Noncash lease expense	67.0		62.6






Asset impairment and related expenses	68.1		52.1






Change in operating assets and liabilities, net of effects from purchase and sale of business:
Accounts receivable	(18.2)		72.2
Inventories	3.3		(48.3)
Prepaid expenses and other current assets	(45.7)		(56.8)
Accounts payable	72.8		53.0
Contract liabilities	6.5		(50.4)
Other accrued expenses and liabilities	(197.9)		(57.0)
Other	12.4		(65.6)
Total adjustments	224.4		479.4
Net cash provided by (used in) operating activities	1,478.6		1,489.3

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant, and equipment	(354.1)		(410.1)
Purchase of business, net of cash acquired	(15.3)		—

Proceeds from sale of assets	4.1		30.8

Proceeds from sale of business	13.9		851.1
Other investing activities	1.0		(7.0)
Net cash provided by (used in) investing activities	(350.4)		464.8


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FINANCIAL STATEMENTS			Table of Contents

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)


	For the Six Months Ended August 31,
	2026		2025
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt	499.7		499.1
Principal payments of long-term debt	(602.1)		(902.1)
Net proceeds from (repayments of) short-term borrowings	(155.5)		(554.2)
Dividends paid	(353.8)		(361.1)
Purchases of treasury stock	(454.7)		(604.0)
Payment of excise tax on share repurchases	(8.8)		(9.9)
Proceeds from shares issued under equity compensation plans	7.3		13.0
Payments of minimum tax withholdings on stock-based payment awards	(10.2)		(9.5)
Payments of debt issuance, debt extinguishment, and other financing costs	(3.1)		(5.4)
Distributions to noncontrolling interests	(50.0)		(17.5)
Payment of contingent consideration	(0.3)		(1.5)





Net cash provided by (used in) financing activities	(1,131.5)		(1,953.1)

Effect of exchange rate changes on cash and cash equivalents	(0.6)		2.9

Net increase (decrease) in cash and cash equivalents	(3.9)		3.9
Cash and cash equivalents, beginning of period	102.4		68.1
Cash and cash equivalents, end of period	$	98.5	$	72.0

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES












Additions to property, plant, and equipment	$	89.7	$	62.5

The accompanying notes are an integral part of these statements.


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FINANCIAL STATEMENTS			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			Table of Contents

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

AUGUST 31, 2026

(unaudited)

1. BASIS OF PRESENTATION

We have prepared the Financial Statements, without audit, pursuant to the rules and regulations of the SEC applicable to quarterly reporting on Form 10-Q and reflect, in our opinion, all adjustments necessary to present fairly our financial information. All such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements, prepared in accordance with generally accepted accounting principles, have been condensed or omitted as permitted by such rules and regulations. These Financial Statements should be read in conjunction with the consolidated financial statements and related notes included in the 2026 Annual Report. Results of operations for interim periods are not necessarily indicative of annual results.

2. RESTRUCTURING

The 2025 Restructuring Initiative is an enterprise-wide cost savings and restructuring initiative designed to help optimize the performance of our business, including through enhanced organizational efficiency and optimized expenditures across our organization. The majority of the work associated with the 2025 Restructuring Initiative was executed within the year ended February 28, 2026. The 2025 Restructuring Initiative is estimated to result in $130 million of cumulative pre-tax costs once all phases are fully implemented. These costs are expected to be comprised of (i) employee termination costs (50%) and (ii) consulting services as well as other costs, which primarily include contract termination costs (50%).

We recognized pre-tax restructuring costs within selling, general, and administrative expenses in our consolidated results related to the 2025 Restructuring Initiative as follows:


	For the Six Months Ended August 31,				For the Three Months Ended August 31,
	2026		2025		2026		2025
(in millions)



Consulting services	4.3		21.5		3.8		8.2
Other	1.2		0.1		1.1		0.1
	$	5.5	$	21.6	$	4.9	$	8.3

Since the inception of the 2025 Restructuring Initiative, we have incurred the following pre-tax restructuring costs:


	Cumulative Costs as of August 31, 2026		Percent of Total Costs
(in millions)


Employee termination	$	62.0	49	%
Consulting services	59.8		47	%
Other	5.6		4	%
	$	127.4	100	%


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FINANCIAL STATEMENTS			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			Table of Contents

The activity for the restructuring costs discussed above and the related accruals are as follows:


	Employee Termination		Consulting Services		Other		Total
(in millions)
Balance at February 28, 2026 (1)	$	18.6	$	29.9	$	4.2	$	52.7
Restructuring costs	—		4.3		0.1		4.4
Cash payments	(13.4)		(30.6)		(3.9)		(47.9)

Balance at August 31, 2026 (1)	$	5.2	$	3.6	$	0.4	$	9.2

(1)The total accrual was recorded in accrued restructuring within other accrued expenses and liabilities on our consolidated balance sheets.

3. INVENTORIES

Inventories are stated at the lower of cost (primarily computed in accordance with the first-in, first-out method) or net realizable value. Elements of cost include materials, labor, and overhead and consist of the following:


	August 31, 2026		February 28, 2026
(in millions)
Raw materials and supplies	$	192.2	$	204.6
In-process inventories	512.4		549.5
Finished case goods	674.0		679.8
	$	1,378.6	$	1,433.9

The inventories balance at August 31, 2026, excludes $34.3 million of primarily bulk inventory associated with assets held for sale. For additional information, refer to Note 5.

4. DERIVATIVE INSTRUMENTS

Overview

Our risk management and derivative accounting policies are presented in Notes 1 and 7 of our consolidated financial statements included in our 2026 Annual Report and have not changed significantly for the six months and three months ended August 31, 2026.

The aggregate notional value of outstanding derivative instruments is as follows:


	August 31, 2026		February 28, 2026
(in millions)
Derivative instruments designated as hedging instruments
Foreign currency contracts	$	2,651.5	$	2,080.9
Net investment hedge contracts	$	145.5	$	145.5


Pre-issuance hedge contracts	$	—	$	50.0

Derivative instruments not designated as hedging instruments
Foreign currency contracts	$	533.2	$	522.2
Commodity derivative contracts	$	358.9	$	335.5


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Net investment hedge contracts

In April 2025, we entered into cross-currency swaps to hedge portions of our net investment in certain of our non-U.S. operations against fluctuations in foreign currency exchange rates. These cross-currency swaps are designated as net investment hedges and mature between April 2028 and April 2029. The changes in the fair value of these swaps are recognized as a component of other comprehensive income (loss) and reported in accumulated other comprehensive income (loss) in our consolidated balance sheets. The gain or loss will be subsequently reclassified into net earnings when the hedged net investment is either sold, liquidated, or substantially liquidated. We assess the effectiveness of our cross-currency swaps using the spot method. Under this method, the periodic interest settlements are recorded directly in earnings through interest expense, net. Accordingly, interest income recognized in interest expense, net related to these cross-currency swaps was as follows:


	For the Six Months Ended August 31,				For the Three Months Ended August 31,
	2026		2025		2026		2025
(in millions)
Interest income	$	1.1	$	0.8	$	0.5	$	0.5

Credit risk

We are exposed to credit-related losses if the counterparties to our derivative contracts default. This credit risk is limited to the fair value of the derivative contracts. To manage this risk, we contract only with major financial institutions that have earned investment-grade credit ratings and with whom we have standard International Swaps and Derivatives Association agreements which allow for net settlement of the derivative contracts. We have also established counterparty credit guidelines that are regularly monitored. Because of these safeguards, we believe the risk of loss from counterparty default to be immaterial.

In addition, our derivative instruments are not subject to credit rating contingencies or collateral requirements. As of August 31, 2026, there were no derivative instruments in a net liability position due to counterparties.

Results of period derivative activity

The estimated fair value and location of our derivative instruments on our balance sheets are as follows (see Note 5):


Assets					Liabilities
	August 31, 2026		February 28, 2026			August 31, 2026		February 28, 2026
(in millions)
Derivative instruments designated as hedging instruments
Foreign currency contracts:
Prepaid expenses and other	$	140.9	$	156.7	Other accrued expenses and liabilities	$	0.5	$	0.1
Other assets	$	202.4	$	177.6	Deferred income taxes and other liabilities	$	0.3	$	0.1








Net investment hedge contracts:

Other assets	$	—	$	—	Deferred income taxes and other liabilities	$	4.8	$	6.7
Derivative instruments not designated as hedging instruments
Foreign currency contracts:
Prepaid expenses and other	$	1.0	$	0.4	Other accrued expenses and liabilities	$	1.8	$	0.9


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Assets					Liabilities
	August 31, 2026		February 28, 2026			August 31, 2026		February 28, 2026
(in millions)
Commodity derivative contracts:
Prepaid expenses and other	$	45.1	$	22.4	Other accrued expenses and liabilities	$	7.8	$	5.3
Other assets	$	15.3	$	8.8	Deferred income taxes and other liabilities	$	2.0	$	2.1

The principal effect of our derivative instruments designated in cash flow hedging relationships on our results of operations, as well as OCI, net of income tax effect, is as follows:


Derivative Instruments in Designated Cash Flow Hedging Relationships	Net Gain (Loss) Recognized in OCI		Location of Net Gain (Loss) Reclassified from AOCI to Income (Loss)	Net Gain (Loss) Reclassified from AOCI to Income (Loss)
(in millions)
For the Six Months Ended August 31, 2026
Foreign currency contracts	$	81.0	Sales	$	0.2
			Cost of product sold	72.6

Pre-issuance hedge contracts	1.8		Interest expense, net	(0.2)
	$	82.8		$	72.6
For the Six Months Ended August 31, 2025
Foreign currency contracts	$	202.7	Sales	$	0.6
			Cost of product sold	23.0
			Selling, general, and administrative expenses	0.2
Pre-issuance hedge contracts	(3.4)		Interest expense, net	(0.1)
	$	199.3		$	23.7
For the Three Months Ended August 31, 2026
Foreign currency contracts	$	72.6	Sales	$	0.1
			Cost of product sold	38.4

Pre-issuance hedge contracts	—		Interest expense, net	(0.1)
	$	72.6		$	38.4
For the Three Months Ended August 31, 2025
Foreign currency contracts	$	79.1	Sales	$	0.3
			Cost of product sold	17.8

Pre-issuance hedge contracts	—		Interest expense, net	(0.1)
	$	79.1		$	18.0

We expect $128.7 million of net gains, net of income tax effect, to be reclassified from AOCI to our results of operations within the next 12 months.


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The effect of our undesignated derivative instruments on our results of operations is as follows:


Derivative Instruments Not Designated as Hedging Instruments	Location of Net Gain (Loss) Recognized in Income (Loss)	Net Gain (Loss) Recognized in Income (Loss)
(in millions)
For the Six Months Ended August 31, 2026
Commodity derivative contracts	Cost of product sold	$	52.7
Foreign currency contracts	Selling, general, and administrative expenses	(7.8)

		$	44.9

For the Six Months Ended August 31, 2025
Commodity derivative contracts	Cost of product sold	$	(4.7)
Foreign currency contracts	Selling, general, and administrative expenses	7.3
		$	2.6
For the Three Months Ended August 31, 2026
Commodity derivative contracts	Cost of product sold	$	3.4
Foreign currency contracts	Selling, general, and administrative expenses	(4.9)

		$	(1.5)
For the Three Months Ended August 31, 2025
Commodity derivative contracts	Cost of product sold	$	13.0
Foreign currency contracts	Selling, general, and administrative expenses	2.3
		$	15.3

5. FAIR VALUE OF FINANCIAL INSTRUMENTS

Authoritative guidance establishes a framework for measuring fair value, including a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy includes three levels:

•Level 1 inputs are quoted prices in active markets for identical assets or liabilities;

•Level 2 inputs include data points that are observable such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) such as volatility, interest rates, and yield curves that are observable for the asset or liability, either directly or indirectly; and

•Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

FAIR VALUE METHODOLOGY

The following methods and assumptions are used to estimate the fair value of our financial instruments:

Derivative instruments

Our derivative instruments consist of foreign currency forward and option contracts, commodity swap contracts, cross-currency swap contracts, interest rate swap contracts, and Pre-issuance hedge contracts. The fair value is estimated based on quoted market prices from respective counterparties. Quotes are corroborated by using discounted cash flow calculations based upon forward interest-rate yield curves, which are obtained from independent pricing services (Level 2 fair value measurement).


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Short-term borrowings

Our short-term borrowings consist of our commercial paper program and the revolving credit facility under our senior credit facility. The revolving credit facility is a variable interest rate bearing note with a fixed margin, adjustable based upon our debt rating (as defined in our senior credit facility). For these short-term borrowings, the carrying value approximates the fair value.

Long-term debt

The fair value of our fixed interest rate long-term debt is estimated by discounting cash flows using interest rates currently available for debt with similar terms and maturities (Level 2 fair value measurement). As of August 31, 2026, the carrying amount of long-term debt, including the current portion, was $10,199.2 million, compared with an estimated fair value of $9,444.9 million. As of February 28, 2026, the carrying amount of long-term debt, including the current portion, was $10,296.5 million, compared with an estimated fair value of $9,858.2 million.

The carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable, approximate fair value as of August 31, 2026, and February 28, 2026, due to the relatively short maturity of these instruments.

Recurring basis measurements

The following table presents our financial assets and liabilities measured at estimated fair value on a recurring basis:


	Fair Value Measurements Using
	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
(in millions)
August 31, 2026
Assets:
Foreign currency contracts	$	—	$	344.3	$	—	$	344.3
Commodity derivative contracts	$	—	$	60.4	$	—	$	60.4




Liabilities:
Foreign currency contracts	$	—	$	2.6	$	—	$	2.6
Commodity derivative contracts	$	—	$	9.8	$	—	$	9.8
Net investment hedge contracts	$	—	$	4.8	$	—	$	4.8


February 28, 2026
Assets:
Foreign currency contracts	$	—	$	334.7	$	—	$	334.7
Commodity derivative contracts	$	—	$	31.2	$	—	$	31.2



Liabilities:
Foreign currency contracts	$	—	$	1.1	$	—	$	1.1
Commodity derivative contracts	$	—	$	7.4	$	—	$	7.4
Net investment hedge contracts	$	—	$	6.7	$	—	$	6.7


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Nonrecurring basis measurements

The following table presents our assets and liabilities measured at estimated fair value on a nonrecurring basis for which an impairment assessment was performed for the period presented:


		Fair Value Measurements Using
	Balance Sheet Classification	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Losses
(in millions)
For the Six Months Ended August 31, 2026

Assets held for sale and related net assets	Prepaid expenses and other	$	—	$	5.0	$	—	$	68.1


For the Six Months Ended August 31, 2025
Assets held for sale and related net assets	Assets held for sale	$	—	$	—	$	—	$	52.1

Equity method investments	Other assets	—		—		—		1.5
Total		$	—	$	—	$	—	$	53.6

Assets held for sale and related net assets

For the three months ended August 31, 2026, in connection with management’s plan to divest the Nelson’s Green Brier business, assets held for sale with a $54.8 million carrying value were adjusted to their estimated fair value of $5.0 million, less costs to sell, resulting in a $49.8 million net loss. This net loss was included in asset impairment and related expenses within our consolidated results for the six months and three months ended August 31, 2026. The estimated fair value was based on the expected proceeds from a potential divestiture as of August 31, 2026.

For the three months ended May 31, 2026, in connection with the New Zealand Wine Divestitures, then-existing assets held for sale with a $36.7 million carrying value were adjusted to their estimated fair value of $18.4 million, less costs to sell, resulting in an $18.3 million net loss. This net loss was included in asset impairment and related expenses within our consolidated results for the six months ended August 31, 2026. Our estimated fair value of the then-existing assets held for sale was based on the expected proceeds from the New Zealand Wine Divestitures as of May 31, 2026.

For the three months ended May 31, 2025, largely in connection with the 2025 Wine Divestitures, then-existing assets held for sale and related net assets were adjusted to their current estimated fair value of $897.7 million, less costs to sell, resulting in a $52.1 million net loss. This net loss was included in asset impairment and related expenses within our consolidated results for the six months ended August 31, 2025. Our estimated fair value of the then-existing assets held for sale was largely based on the expected proceeds from the 2025 Wine Divestitures as of May 31, 2025.

Equity method investments

As of August 31, 2025, we evaluated an equity method investment, made through our corporate venture capital function within the Corporate Operations and Other segment, and determined there was an other-than-temporary impairment due to business underperformance. This loss from impairment was included in income (loss) from unconsolidated investments within our consolidated results for the six months and three months ended August 31, 2025. The estimated fair value was based largely on the cash flows expected to be generated by the investment using unobservable data points.


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6. GOODWILL

The changes in the carrying amount of the Beer segment goodwill are as follows:



(in millions)
Balance at February 28, 2025	$	5,126.8

Foreign currency translation adjustments	107.1



Balance at February 28, 2026	5,233.9
Purchase accounting allocations (1)	27.6

Foreign currency translation adjustments	7.8



Balance at August 31, 2026	$	5,269.3

(1)Preliminary purchase accounting allocations associated with the HOPWTR acquisition (see below).

The carrying amount of our Wine and Spirits segment goodwill was zero as of August 31, 2026, February 28, 2026, and February 28, 2025, respectively.

ACQUISITION

HOPWTR

In April 2026, we purchased the remaining ownership interest in HOPWTR, a premium non-alcoholic brand crafted with hops, adaptogens, and nootropics. HOPWTR has been a part of our corporate ventures portfolio since 2021. This transaction also included the acquisition of trademarks. The results of operations of HOPWTR are reported in the Beer segment and have been included in our consolidated results of operations from the date of acquisition.

DIVESTITURES

New Zealand Wine Divestitures

In June 2026, we sold eight small-scale domestic-market New Zealand mainstream wine brands and associated inventory, equipment, a winery, and vineyards. The net cash proceeds were used for general corporate purposes. Prior to the completion of the New Zealand Wine Divestitures, we recorded the results of operations of the divested brands in the Wine and Spirits segment.

2025 Wine Divestitures

On June 2, 2025, we sold and, in certain instances, exclusively licensed the trademarks of a portion of our wine and spirits business, primarily centered around our then-owned mainstream wine brands and associated inventory, wineries, vineyards, offices, and facilities. The net cash proceeds from the 2025 Wine Divestitures were used for repayment of debt. Prior to the completion of the 2025 Wine Divestitures, we recorded the results of operations of the divested and exclusively licensed brands in the Wine and Spirits segment. The following table summarizes the net loss recognized in connection with this transaction for the six months and three months ended August 31, 2025:


(in millions)
Cash received from buyer	$	846.5
Net assets sold	(859.7)
Direct costs to sell	(2.5)
Loss on sale of business (1)	$	(15.7)

(1)Included in selling, general, and administrative expenses within our consolidated results of operations.


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SUBSEQUENT EVENT

SpikedAde acquisition

In October 2026, we acquired the SpikedAde business, a spirit-based RTD beverage brand, including inventory and trademarks, for an initial purchase price of $75 million. The agreement also provides for contingent consideration of up to $278 million payable over five years based on the future performance of the SpikedAde business. The results of operations of SpikedAde will be reported in the Beer segment and will be included in our consolidated results of operations from the date of acquisition.

7. INTANGIBLE ASSETS

The major components of intangible assets are as follows:


	August 31, 2026				February 28, 2026
	Gross Carrying Amount		Net Carrying Amount		Gross Carrying Amount		Net Carrying Amount
(in millions)
Amortizable intangible assets
Customer relationships	$	85.4	$	12.9	$	85.4	$	13.6
Other	19.6		0.3		19.6		0.3
Total	$	105.0	13.2		$	105.0	13.9
Nonamortizable intangible assets
Trademarks			2,518.0				2,519.1
Total intangible assets			$	2,531.2			$	2,533.0

We did not incur costs to renew or extend the term of acquired intangible assets for the six months and three months ended August 31, 2026, and August 31, 2025. Net carrying amount represents the gross carrying value net of accumulated amortization.

8. BORROWINGS

Borrowings consist of the following:


	August 31, 2026						February 28, 2026
	Current		Long-term		Total		Total
(in millions)
Short-term borrowings

Commercial paper	$	116.5					$	272.0

	$	116.5					$	272.0

Long-term debt


Senior notes	$	1,099.1	$	9,088.5	$	10,187.6	$	10,285.3
Other	3.9		7.7		11.6		11.2
	$	1,103.0	$	9,096.2	$	10,199.2	$	10,296.5


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2025 Credit Agreement

The Company, CB International, the Administrative Agent, and certain other lenders are parties to the 2025 Credit Agreement. Information with respect to borrowings under the 2025 Credit Agreement is as follows:


	Outstanding borrowings		Interest rate		SOFR margin		Outstanding letters of credit		Remaining borrowing capacity (1)
(in millions)
August 31, 2026
Revolving credit facility (2) (3)	$	—	—	%	—	%	$	10.9	$	2,122.6


February 28, 2026
Revolving credit facility (2) (3)	$	—	—	%	—	%	$	11.3	$	1,966.6

(1)Net of outstanding revolving credit facility borrowings and outstanding letters of credit under the 2025 Credit Agreement, and outstanding borrowings under our commercial paper program of $116.5 million and $272.1 million (excluding unamortized discount) as of August 31, 2026, and February 28, 2026, respectively (see “Commercial paper program” below).

(2)Contractual interest rate varies based on our debt rating (as defined in the agreement) and is a function of SOFR plus a margin and a credit spread adjustment, or the base rate plus a margin, or, in certain circumstances where SOFR cannot be adequately ascertained or available, an alternative benchmark rate plus a margin.

(3)We and/or CB International are the borrower under the $2,250.0 million revolving credit facility with a maturity date of April 28, 2030. Includes a sub-facility for letters of credit of up to $200.0 million.

We and our subsidiaries are subject to covenants that are contained in the 2025 Credit Agreement, including those restricting the incurrence of additional subsidiary indebtedness, additional liens, mergers and consolidations, transactions with affiliates, and sale and leaseback transactions, in each case subject to numerous conditions, exceptions, and thresholds. The financial covenants are limited to a minimum interest coverage ratio and a maximum net leverage ratio.

Commercial paper program

We have a commercial paper program which provides for the issuance of up to an aggregate principal amount of $2.25 billion of commercial paper. Our commercial paper program is backed by unused commitments under our revolving credit facility under our 2025 Credit Agreement. Accordingly, outstanding borrowings under our commercial paper program reduce the amount available under our revolving credit facility. Information with respect to our outstanding commercial paper borrowings is as follows:


	August 31, 2026			February 28, 2026
(in millions)
Outstanding borrowings (1)	$	116.5		$	272.0
Weighted average annual interest rate	3.9		%	3.9		%
Weighted average remaining term	2 days			6 days

(1)Outstanding commercial paper borrowings are net of unamortized discount.

Senior notes

In May 2026, we issued $500.0 million aggregate principal amount of 4.85% senior notes due May 2031. Proceeds from this offering, net of discount and debt issuance costs, were $496.7 million. Interest on the 4.85% May 2026 Senior Notes is payable semiannually on May 6 and November 6 of each year, beginning November 6, 2026. The 4.85% May 2026 Senior Notes are redeemable, in whole or in part, at our option at any time prior to April 6, 2031, at a


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redemption price equal to 100% of the outstanding principal amount, plus accrued and unpaid interest and a make-whole payment based on the present value of the future payments at the adjusted treasury rate, as defined in the applicable indenture, plus 15 basis points. On or after April 6, 2031, we may redeem the 4.85% May 2026 Senior Notes, in whole or in part, at our option at any time at a redemption price equal to 100% of the outstanding principal amount, plus accrued and unpaid interest. The 4.85% May 2026 Senior Notes are senior unsecured obligations which rank equally in right of payment to all of our existing and future senior unsecured indebtedness.

On May 18, 2026, we redeemed $600.0 million aggregate principal amount of 3.70% December 2016 Senior Notes prior to maturity using proceeds from the 4.85% May 2026 Senior Notes and commercial paper borrowings at a redemption price equal to 100% of the outstanding principal amount plus accrued and unpaid interest.

Debt payments

As of August 31, 2026, the required principal repayments under long-term debt obligations (excluding unamortized debt issuance costs and unamortized discounts of $43.4 million and $19.0 million, respectively) for the remaining six months of Fiscal 2027 and for each of the five succeeding fiscal years and thereafter are as follows:


(in millions)
Fiscal 2027	$	1.9
Fiscal 2028	1,803.1
Fiscal 2029	902.4
Fiscal 2030	802.0
Fiscal 2031	1,101.5
Fiscal 2032	1,500.7
Thereafter	4,150.0
	$	10,261.6

SUBSEQUENT EVENTS

2026 Term Credit Agreement

In September 2026, the Company, M&T, as administrative agent and a lender, and certain other lenders entered into the 2026 Term Credit Agreement. The 2026 Term Credit Agreement provides for a nine-month delayed draw $300.0 million term loan facility, available in up to two draws. The balance is due and payable two years after the initial funding date, if any, occurs. The proceeds, if drawn, from the 2026 Term Credit Agreement are intended to be used for general corporate purposes, including the repayment of debt.

Senior notes

On September 18, 2026, we redeemed $600.0 million aggregate principal amount of 4.35% May 2022 Senior Notes prior to maturity using commercial paper borrowings at a redemption price equal to 100% of the outstanding principal amount plus accrued and unpaid interest.

9. INCOME TAXES

Overview


	For the Six Months Ended August 31,		For the Three Months Ended August 31,
	2026	2025	2026	2025
Effective tax rate	15.8%	27.6%	20.2%	37.9%


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For the six months and three months ended August 31, 2026, our effective tax rate was lower than the federal statutory rate of 21% largely due to the benefit of lower effective tax rates applicable to our foreign businesses, partially offset by (i) changes to valuation allowances and (ii) certain tax legislation updates.

For the six months and three months ended August 31, 2025, our effective tax rate was higher than the federal statutory rate of 21% largely due to changes in valuation allowances related to net operating losses and tax legislation updates, partially offset by (i) a net income tax benefit recognized as a result of the resolution of various tax examinations and assessments related to prior periods and (ii) the benefit of lower effective tax rates applicable to our foreign businesses.

Tax Legislation

OB3 Act

On July 4, 2025, the OB3 Act was signed into U.S. law. The OB3 Act extends and modifies several provisions originally introduced under the Tax Cuts and Jobs Act of 2017, while also implementing additional changes to U.S. federal tax law. Key provisions of the OB3 Act include (i) the permanent extension of 100% bonus depreciation for qualifying assets, (ii) the elimination of the requirement to capitalize and amortize U.S.-based research and experimental expenditures, allowing for immediate expensing, (iii) changes to the limitation on the deductibility of interest expense, and (iv) modifications to the taxation of foreign earnings and other international income tax provisions. The OB3 Act contains multiple effective dates, with certain provisions taking effect beginning in calendar year 2025 and others phased in through calendar year 2027.

We have performed an evaluation of the impact of the OB3 Act on our consolidated financial statements, including the effects on our annual effective tax rate, deferred tax assets and liabilities, and cash flows. Based on this analysis and activities performed in response to the legislation, there will be a negative impact on our effective tax rate for Fiscal 2027, primarily driven by modifications to the taxation of foreign earnings and other international income tax provisions.

Pillar Two

The OECD introduced a framework under Pillar Two which includes a 15% global minimum tax rate. Many jurisdictions in which we do business have started to enact laws implementing Pillar Two. We are monitoring these developments and currently do not believe these rules will have a material impact on our financial condition and/or consolidated results.

SUBSEQUENT EVENT

As a result of certain foreign tax reform enacted in September 2026, we expect to release a portion of our valuation allowance related to deferred tax assets. We are estimating an income tax benefit of approximately $100 million to $150 million to be recognized during the three months ending November 30, 2026.


Constellation Brands, Inc. Q2 FY 2027 Form 10-Q			#WORTHREACHINGFOR I 18


FINANCIAL STATEMENTS			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			Table of Contents

10. STOCKHOLDERS’ EQUITY

Common stock

The number of shares of common stock issued and treasury stock, and associated share activity, are as follows:


	Class A Stock	Class 1 Stock	Class A Stock in Treasury
Balance at February 28, 2026	212,699,542	25,923	39,927,096
Share repurchases	—	—	1,465,295

Exercise of stock options	—	—	(24,772)

Vesting of restricted stock units (1)	—	—	(122,930)
Vesting of performance share units (1)	—	—	(12,043)

Balance at May 31, 2026	212,699,542	25,923	41,232,646
Share repurchases	—	—	1,704,371
Conversion of shares	190	(190)	—

Employee stock purchases	—	—	(31,026)
Vesting of restricted stock units (1)	—	—	(12,117)


Balance at August 31, 2026	212,699,732	25,733	42,893,874










Balance at February 28, 2025	212,698,298	27,037	34,505,141
Share repurchases	—	—	1,634,718

Exercise of stock options	—	130	(38,775)

Vesting of restricted stock units (1)	—	—	(98,959)


Balance at May 31, 2025	212,698,298	27,167	36,002,125
Share repurchases	—	—	1,740,884

Exercise of stock options	—	—	(18,337)
Employee stock purchases	—	—	(34,341)
Vesting of restricted stock units (1)	—	—	(5,369)


Balance at August 31, 2025	212,698,298	27,167	37,684,962

(1)Net of the following shares withheld to satisfy tax withholding requirements:


	For the Three Months Ended May 31,	For the Three Months Ended August 31,	For the Six Months Ended August 31,
2026
Restricted Stock Units	60,594	324	60,918
Performance Share Units	5,992	—	5,992
2025
Restricted Stock Units	50,720	146	50,866

Stock repurchases

In April 2025, our Board of Directors authorized the repurchase of up to $4.0 billion of our publicly traded common stock under the 2025 Authorization, which expires in February 2028. Shares repurchased under this authorization become treasury shares. For the six months ended August 31, 2026, we repurchased 3,169,666 shares of Class A Stock pursuant to the 2025 Authorization through open market transactions at an aggregate cost of $454.7 million. Subsequent to August 31, 2026, we repurchased 607,371 shares of Class A Stock pursuant to the 2025 Authorization at an aggregate cost of $75.0 million through open market transactions made pursuant to a Rule 10b5-1 trading plan. As of September 30, 2026, $2,546.2 million remains available for future share repurchases, excluding the impact of Federal excise tax owed pursuant to the IRA.


Constellation Brands, Inc. Q2 FY 2027 Form 10-Q			#WORTHREACHINGFOR I 19


FINANCIAL STATEMENTS			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			Table of Contents

11. NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO CBI

Net income (loss) per common share attributable to CBI (hereafter referred to as “net income (loss) per common share”) – basic for Class A Stock has been computed based on the weighted average shares of common stock outstanding during the period. Net income (loss) per common share – diluted for Class A Stock reflects the weighted average shares of common stock plus the effect of dilutive securities outstanding during the period using the treasury stock method. The effect of dilutive securities includes the impact of outstanding stock-based awards. The dilutive computation does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect on the net income (loss) per common share. The computation of basic and diluted net income (loss) per common share for Class A Stock are as follows:


	For the Six Months Ended August 31,				For the Three Months Ended August 31,
	2026		2025		2026		2025
(in millions, except per share data)
Net income (loss) attributable to CBI	$	1,219.6	$	982.1	$	565.8	$	466.0

Weighted average common shares outstanding – basic	171.323		176.804		170.460		175.821
Stock-based awards (1)	0.180		0.153		0.141		0.117
Weighted average common shares outstanding – diluted	171.503		176.957		170.601		175.938

Net income (loss) per common share attributable to CBI – basic	$	7.12	$	5.55	$	3.32	$	2.65
Net income (loss) per common share attributable to CBI – diluted	$	7.11	$	5.55	$	3.32	$	2.65

(1)Primarily includes performance share units and restricted stock units for the six months and three months ended August 31, 2026 and stock options and restricted stock units for the six months and three months ended August 31, 2025.

The following stock-based awards were excluded from the computation of diluted net income (loss) per common share for Class A Stock, as the effect of including these would have been anti-dilutive:


	For the Six Months Ended August 31,				For the Three Months Ended August 31,
	2026		2025		2026		2025

(in millions, except exercise price)
Stock-based awards, primarily stock options	2.785		1.840		2.817		1.994
Weighted average exercise price, stock options	$	206.87	$	235.49	$	206.85	$	194.96


Constellation Brands, Inc. Q2 FY 2027 Form 10-Q			#WORTHREACHINGFOR I 20


FINANCIAL STATEMENTS			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			Table of Contents

12. COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CBI

Comprehensive income (loss) consists of net income (loss), foreign currency translation adjustments, unrealized net gain (loss) on derivative instruments, including cash flow and net investment hedges, pension/postretirement adjustments, and our share of OCI of equity method investments. The reconciliation of net income (loss) attributable to CBI to comprehensive income (loss) attributable to CBI is as follows:


	Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
(in millions)
For the Six Months Ended August 31, 2026
Net income (loss) attributable to CBI					$	1,219.6
Other comprehensive income (loss) attributable to CBI:
Foreign currency translation adjustments:
Net gain (loss)	$	55.0	$	—	55.0
Amounts reclassified	—		—		—
Net gain (loss) recognized in other comprehensive income (loss)	55.0		—		55.0
Unrealized gain (loss) on cash flow hedges:
Net cash flow hedge gain (loss)	89.3		(11.0)		78.3
Amounts reclassified	(78.3)		9.3		(69.0)
Net gain (loss) recognized in other comprehensive income (loss)	11.0		(1.7)		9.3
Unrealized gain (loss) on net investment hedges:
Net investment hedge gain (loss)	1.9		(0.5)		1.4
Amounts reclassified	—		—		—
Net gain (loss) recognized in other comprehensive income (loss)	1.9		(0.5)		1.4
Pension/postretirement adjustments:
Net actuarial gain (loss)	(0.1)		0.1		—
Amounts reclassified	—		—		—
Net gain (loss) recognized in other comprehensive income (loss)	(0.1)		0.1		—
Share of OCI of equity method investments:
Net gain (loss)	—		—		—
Amounts reclassified	0.8		(0.2)		0.6
Net gain (loss) recognized in other comprehensive income (loss)	0.8		(0.2)		0.6
Other comprehensive income (loss) attributable to CBI	$	68.6	$	(2.3)	66.3
Comprehensive income (loss) attributable to CBI					$	1,285.9
For the Six Months Ended August 31, 2025
Net income (loss) attributable to CBI					$	982.1
Other comprehensive income (loss) attributable to CBI:
Foreign currency translation adjustments:
Net gain (loss)	$	408.3	$	—	408.3
Amounts reclassified	—		—		—
Net gain (loss) recognized in other comprehensive income (loss)	408.3		—		408.3
Unrealized gain (loss) on cash flow hedges:
Net cash flow hedge gain (loss)	216.0		(26.3)		189.7
Amounts reclassified	(25.0)		2.8		(22.2)
Net gain (loss) recognized in other comprehensive income (loss)	191.0		(23.5)		167.5


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FINANCIAL STATEMENTS			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			Table of Contents


	Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
(in millions)
Unrealized gain (loss) on net investment hedges:
Net investment hedge gain (loss)	(5.6)		1.4		(4.2)
Amounts reclassified	—		—		—
Net gain (loss) recognized in other comprehensive income (loss)	(5.6)		1.4		(4.2)
Pension/postretirement adjustments:
Net actuarial gain (loss)	(0.1)		—		(0.1)
Amounts reclassified	—		—		—
Net gain (loss) recognized in other comprehensive income (loss)	(0.1)		—		(0.1)
Share of OCI of equity method investments:
Net gain (loss)	—		—		—
Amounts reclassified	(1.5)		0.4		(1.1)
Net gain (loss) recognized in other comprehensive income (loss)	(1.5)		0.4		(1.1)
Other comprehensive income (loss) attributable to CBI	$	592.1	$	(21.7)	570.4
Comprehensive income (loss) attributable to CBI					$	1,552.5

For the Three Months Ended August 31, 2026
Net income (loss) attributable to CBI					$	565.8
Other comprehensive income (loss) attributable to CBI:
Foreign currency translation adjustments:
Net gain (loss)	$	119.1	$	—	119.1
Amounts reclassified	—		—		—
Net gain (loss) recognized in other comprehensive income (loss)	119.1		—		119.1
Unrealized gain (loss) on cash flow hedges:
Net cash flow hedge gain (loss)	77.8		(9.0)		68.8
Amounts reclassified	(41.5)		4.9		(36.6)
Net gain (loss) recognized in other comprehensive income (loss)	36.3		(4.1)		32.2
Unrealized gain (loss) on net investment hedges:
Net investment hedge gain (loss)	0.6		(0.2)		0.4
Amounts reclassified	—		—		—
Net gain (loss) recognized in other comprehensive income (loss)	0.6		(0.2)		0.4
Pension/postretirement adjustments:
Net actuarial gain (loss)	(0.2)		0.1		(0.1)
Amounts reclassified	—		—		—
Net gain (loss) recognized in other comprehensive income (loss)	(0.2)		0.1		(0.1)
Share of OCI of equity method investments:
Net gain (loss)	—		—		—
Amounts reclassified	0.2		(0.1)		0.1
Net gain (loss) recognized in other comprehensive income (loss)	0.2		(0.1)		0.1
Other comprehensive income (loss) attributable to CBI	$	156.0	$	(4.3)	151.7
Comprehensive income (loss) attributable to CBI					$	717.5


Constellation Brands, Inc. Q2 FY 2027 Form 10-Q			#WORTHREACHINGFOR I 22


FINANCIAL STATEMENTS			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			Table of Contents


	Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
(in millions)
For the Three Months Ended August 31, 2025
Net income (loss) attributable to CBI					$	466.0
Other comprehensive income (loss) attributable to CBI:
Foreign currency translation adjustments:
Net gain (loss)	$	164.8	$	—	164.8
Amounts reclassified	—		—		—
Net gain (loss) recognized in other comprehensive income (loss)	164.8		—		164.8
Unrealized gain (loss) on cash flow hedges:
Net cash flow hedge gain (loss)	85.4		(10.2)		75.2
Amounts reclassified	(19.3)		2.3		(17.0)
Net gain (loss) recognized in other comprehensive income (loss)	66.1		(7.9)		58.2




Unrealized gain (loss) on net investment hedges:
Net investment hedge gain (loss)	(2.6)		0.7		(1.9)
Amounts reclassified	—		—		—
Net gain (loss) recognized in other comprehensive income (loss)	(2.6)		0.7		(1.9)
Pension/postretirement adjustments:
Net actuarial gain (loss)	(0.1)		—		(0.1)
Amounts reclassified	—		—		—
Net gain (loss) recognized in other comprehensive income (loss)	(0.1)		—		(0.1)
Share of OCI of equity method investments:
Net gain (loss)	—		—		—
Amounts reclassified	(1.8)		0.5		(1.3)
Net gain (loss) recognized in other comprehensive income (loss)	(1.8)		0.5		(1.3)
Other comprehensive income (loss) attributable to CBI	$	226.4	$	(6.7)	219.7
Comprehensive income (loss) attributable to CBI					$	685.7


Constellation Brands, Inc. Q2 FY 2027 Form 10-Q			#WORTHREACHINGFOR I 23


FINANCIAL STATEMENTS			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			Table of Contents

Accumulated other comprehensive income (loss), net of income tax effect, includes the following components:


	Foreign Currency Translation Adjustments		Unrealized Net Gain (Loss) on Derivative Instruments		Pension/ Postretirement Adjustments		Share of OCI of Equity Method Investments		Accumulated Other Comprehensive Income (Loss)
(in millions)
Balance at February 28, 2026	$	143.8	$	285.4	$	(5.5)	$	(0.5)	$	423.2
Other comprehensive income (loss):
Other comprehensive income (loss) before reclassification adjustments	55.0		79.7		—		—		134.7
Amounts reclassified from accumulated other comprehensive income (loss)	—		(69.0)		—		0.6		(68.4)
Other comprehensive income (loss)	55.0		10.7		—		0.6		66.3
Balance at August 31, 2026	$	198.8	$	296.1	$	(5.5)	$	0.1	$	489.5

13. BUSINESS SEGMENT INFORMATION

Our internal management financial reporting consists of two business divisions: (i) Beer and (ii) Wine and Spirits and we report our operating results in three segments: (i) Beer, (ii) Wine and Spirits, and (iii) Corporate Operations and Other. In the Beer segment, our portfolio consists of high-end imported beer brands and ABAs. We have an exclusive perpetual brand license to produce our beer portfolio and to import, market, and sell such portfolio in the U.S. In the Wine and Spirits segment, we sell a portfolio comprised of exclusively higher-end wine and spirits brands. Amounts included in the Corporate Operations and Other segment consist of costs of corporate communications, corporate development, corporate finance, corporate strategy, executive management, human resources, internal audit, investor relations, IT, legal, and public affairs, as well as our investments such as those made through our corporate venture capital function. All costs included in the Corporate Operations and Other segment are general costs that are applicable to the consolidated group and are, therefore, not allocated to the other reportable segments. All costs reported within the Corporate Operations and Other segment are not included in our CODM’s evaluation of the operating income (loss) performance of the other reportable segments. Our CODM is our President and Chief Executive Officer. The business segments reflect how our operations are managed, how resources are allocated, how operating performance is evaluated by senior management, and the structure of our internal financial reporting. Long-lived tangible assets and total asset information by segment is not provided to, or reviewed by, our CODM as it is not used to make strategic decisions, allocate resources, or assess performance. Our CODM utilizes segment comparable operating income (loss) performance in deciding how to deploy capital in line with disciplined and balanced priorities. These priorities largely include investing in our people and our brands, making capital investments and strategic acquisitions, providing a cash dividend program, and from time-to-time, repurchasing shares of our common stock. Our CODM also monitors budgeted versus actual results in assessing segment operating performance and understanding underlying business trends.

Management excludes Comparable Adjustments from its evaluation of the results of each operating segment as these Comparable Adjustments are not reflective of core operations of the segments. Segment operating performance and the incentive compensation of segment management are evaluated based on core segment operating income (loss) which does not include the impact of these Comparable Adjustments, collectively referred to as comparable operating income (loss). We evaluate segment operating performance based on comparable operating income (loss) of the respective business units.


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FINANCIAL STATEMENTS			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			Table of Contents

The accounting policies of the segments are the same as those described for the Company in Note 1 of our consolidated financial statements included in our 2026 Annual Report. Segment information is as follows:


	Beer			Wine and Spirits			Corporate Operations and Other		Consolidated
(in millions)
For the Six Months Ended August 31, 2026
Net sales	$	4,757.1		$	308.6		$	—	$	5,065.7
Cost of product sold (1)	(2,201.2)			(174.0)			—
Marketing	(450.9)			(30.7)			—
% Net sales	9.5		%	9.9		%
General and administrative expenses (1)	(249.4)			(98.9)			(129.8)
Comparable operating income (loss) (1)	1,855.6			5.0			(129.8)		1,730.8
Operating margin	39.0		%	1.6		%
Comparable Adjustments (2)									(80.5)
Operating income (loss)									1,650.3
Income (loss) from unconsolidated investments (3)									8.3
Interest expense, net (4)									(169.2)
Income (loss) before income taxes									$	1,489.4

Capital expenditures	$	327.5		$	22.4		$	4.2	$	354.1
Depreciation and amortization	$	153.8		$	30.9		$	10.3	$	195.0
% Net sales	3.2		%	10.0		%
For the Six Months Ended August 31, 2025
Net sales	$	4,579.5		$	416.5		$	—	$	4,996.0
Cost of product sold (1)	(2,152.5)			(265.6)			—
Marketing	(391.2)			(54.9)			—
% Net sales	8.5		%	13.2		%
General and administrative expenses (1)	(210.8)			(121.8)			(103.1)
Comparable operating income (loss) (1)	1,825.0			(25.8)			(103.1)		1,696.1
Operating margin	39.9		%	(6.2)		%
Comparable Adjustments (2)									(108.3)
Operating income (loss)									1,587.8
Income (loss) from unconsolidated investments (3)									(7.0)
Interest expense, net (4)									(186.5)
Income (loss) before income taxes									$	1,394.3

Capital expenditures	$	370.2		$	37.5		$	2.4	$	410.1
Depreciation and amortization	$	159.4		$	36.5		$	12.7	$	208.6
% Net sales	3.5		%	8.8		%
For the Three Months Ended August 31, 2026
Net sales	$	2,473.6		$	159.4		$	—	$	2,633.0
Cost of product sold (1)	(1,135.9)			(88.9)			—
Marketing	(245.2)			(14.3)			—
% Net sales	9.9		%	9.0		%
General and administrative expenses (1)	(128.3)			(50.1)			(73.7)
Comparable operating income (loss) (1)	964.2			6.1			(73.7)		896.6
Operating margin	39.0		%	3.8		%
Comparable Adjustments (2)									(91.6)
Operating income (loss)									805.0


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FINANCIAL STATEMENTS			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			Table of Contents


	Beer			Wine and Spirits			Corporate Operations and Other		Consolidated
(in millions)
Income (loss) from unconsolidated investments (3)									7.8
Interest expense, net (4)									(83.4)
Income (loss) before income taxes									$	729.4

Capital expenditures	$	163.2		$	12.6		$	1.1	$	176.9
Depreciation and amortization	$	76.5		$	15.4		$	5.2	$	97.1
% Net sales	3.1		%	9.7		%
For the Three Months Ended August 31, 2025
Net sales	$	2,345.0		$	136.0		$	—	$	2,481.0
Cost of product sold (1)	(1,105.0)			(81.2)			—
Marketing	(190.7)			(20.0)			—
% Net sales	8.1		%	14.7		%
General and administrative expenses (1)	(97.7)			(54.6)			(45.6)
Comparable operating income (loss) (1)	951.6			(19.8)			(45.6)		886.2
Operating margin	40.6		%	(14.6)		%
Comparable Adjustments (2)									(12.2)
Operating income (loss)									874.0
Income (loss) from unconsolidated investments (3)									(3.5)
Interest expense, net (4)									(87.6)
Income (loss) before income taxes									$	782.9

Capital expenditures	$	197.0		$	19.5		$	0.8	$	217.3
Depreciation and amortization	$	82.6		$	14.3		$	6.2	$	103.1
% Net sales	3.5		%	10.5		%

(1)Amounts are determined and presented on a non-GAAP basis and are intended to reflect our core operations.

(2)Comparable Adjustments that impacted comparability in our segment operating income (loss) for each period are as follows:


	For the Six Months Ended August 31,				For the Three Months Ended August 31,
	2026		2025		2026		2025
(in millions)
Cost of product sold
Net gain (loss) on undesignated commodity derivative contracts	$	52.7	$	(4.7)	$	3.4	$	13.0
Settlements of undesignated commodity derivative contracts	(24.2)		6.7		(14.8)		4.2
Flow through of inventory step-up	(1.1)		(1.7)		(0.1)		(0.8)
Strategic business reconfiguration costs	(4.3)		(1.6)		(3.7)		(1.2)





Comparable Adjustments, Cost of product sold	23.1		(1.3)		(15.2)		15.2


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FINANCIAL STATEMENTS			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			Table of Contents


	For the Six Months Ended August 31,				For the Three Months Ended August 31,
	2026		2025		2026		2025
Selling, general, and administrative expenses
Transition services agreements activity	(9.7)		(15.5)		(4.6)		(10.0)
2025 Restructuring Initiative	(5.5)		(21.6)		(4.9)		(8.3)
Gain (loss) on sale of business	(4.3)		(16.3)		(1.8)		(14.9)
Strategic business reconfiguration costs	(13.9)		(5.2)		(14.2)		—

Other gains (losses) (i)	(2.1)		3.7		(1.1)		5.8
Comparable Adjustments, selling, general, and administrative expenses	(35.5)		(54.9)		(26.6)		(27.4)


Asset impairment and related expenses	(68.1)		(52.1)		(49.8)		—

Comparable Adjustments, Operating income (loss)	$	(80.5)	$	(108.3)	$	(91.6)	$	(12.2)

(i)Primarily includes the following:


	For the Six Months Ended August 31,				For the Three Months Ended August 31,
	2026		2025		2026		2025
(in millions)


Gain (loss) on sale of assets	$	—	$	4.1	$	—	$	4.1

(3)Income (loss) from unconsolidated investments consists of:


	For the Six Months Ended August 31,				For the Three Months Ended August 31,
	2026		2025		2026		2025
(in millions)
Equity in earnings (losses) from equity method investees and related activities	$	7.5	$	(0.5)	$	7.0	$	3.0
Unrealized net gain (loss) on securities measured at fair value	0.8		(5.0)		0.8		(5.0)
Impairment of equity method investments	—		(1.5)		—		(1.5)
	$	8.3	$	(7.0)	$	7.8	$	(3.5)

(4)Interest expense, net consists of:


	For the Six Months Ended August 31,				For the Three Months Ended August 31,
	2026		2025		2026		2025
(in millions)
Interest expense	$	(173.0)	$	(189.6)	$	(85.3)	$	(89.0)
Interest income	4.1		4.1		1.9		2.4
Loss on extinguishment of debt	(0.3)		(1.0)		—		(1.0)
	$	(169.2)	$	(186.5)	$	(83.4)	$	(87.6)

14. ACCOUNTING GUIDANCE NOT YET ADOPTED

Disaggregation of income statement expenses

In November 2024, the FASB issued a standard requiring disaggregated information about certain income statement expense line items to be disclosed on an annual and interim basis. We are required to adopt these disclosures for our annual period ending February 29, 2028, with early adoption permitted and this standard may be applied retrospectively. We expect this standard to impact our disclosures with no material impacts to our results of operations, cash flows, or financial condition.


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MD&A			Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

INTRODUCTION

This MD&A provides additional information on our businesses, current developments, financial condition, cash flows, and results of operations. It should be read in conjunction with our Financial Statements and with our consolidated financial statements and notes included in our 2026 Annual Report. This MD&A is organized as follows:

Overview

This section provides a general description of our business, which we believe is important in understanding the results of our operations, financial condition, and potential future trends.

Strategy

This section provides a description of our strategy, including our 2025 Restructuring Initiative, and a discussion of a recent development and certain acquisitions, divestitures, and investments.

Results of operations

This section provides an analysis of our results of operations presented on a business segment basis for the three months ended August 31, 2026, and August 31, 2025, and six months ended August 31, 2026, and August 31, 2025. In addition, a brief description of certain transactions and other items that affect the comparability of the results is provided.

Liquidity and capital resources

This section provides an analysis of our cash flows, outstanding debt, and liquidity position. Included in the analysis of outstanding debt is a discussion of the financial capacity available to fund our on-going operations and future commitments, as well as a discussion of other financing arrangements.

OVERVIEW

We are an international producer and marketer of beer, wine, and spirits with operations in the U.S., Mexico, New Zealand, and Italy with powerful, consumer-connected, high-quality brands like Modelo Especial, Corona Extra, Pacifico, Victoria, Kim Crawford, Ruffino, The Prisoner Wine Company, Robert Mondavi Winery, Mi CAMPO, and High West. In the U.S., we are one of the top dollar share gainers among beverage alcohol suppliers. We are also the second-largest beer company and have the #1 beer brand, Modelo Especial, in dollar sales in the U.S. We continued to strengthen our leadership position in the U.S. beer market as the #1 dollar share gainer in the overall U.S. beer market


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and the #2 dollar share gainer in the high-end. Within wine and spirits, we have implemented a multi-year strategy that repositioned this business to a portfolio of exclusively higher-end brands that we believe is positioned for long-term growth, aligned to our focus on consumer-led premiumization trends, and we continue to progressively expand our supply channels through DTC and international markets. The strength of our brands makes us a supplier of choice to many of our consumers and our Customers, which include wholesale distributors and retailers. We conduct our business through entities we wholly own as well as through a variety of joint ventures and other entities.

STRATEGY

Our overall strategic vision is to consistently deliver industry-leading total stockholder returns over the long-term through a focus on these key elements:

•continue to build strong brands people love with advantaged routes to market;

•build a culture that is consumer-obsessed and leverages robust innovation capabilities to stay on the forefront of consumer trends;

•deploy capital in line with disciplined and balanced priorities;

•empower the whole enterprise to achieve best-in-class operational efficiency; and

•deliver on impactful environmental, social, and governance initiatives that we believe are not only good business, but also good for the world.

We will continue to strive for success by ensuring consumer-led decision making drives all aspects of our business; building a strong talent pipeline with best-in-class people development; investing in infrastructure that supports and enables our business, including data systems and architecture; and exemplifying intentional and proactive fiscal management. We place focus on positioning our portfolio on higher-margin, higher-growth categories of the beverage alcohol industry to align with our strategy to address consumer-led premiumization, product, and purchasing trends, which we anticipate will continue to drive stronger growth rates relative to the industry. To capitalize on these ongoing trends and evolving consumer occasions and preferences, we will continue to employ our commercial and operational strategies, with a focus on capturing additional growth opportunities by winning with more consumers across more occasions. The strategic priorities to support our next phase of growth are organized around three distinct pillars:

Sustaining growth across our scaled brands

Reduce distribution gaps, invest in and optimize marketing and brand activation, leverage price-pack architecture and revenue growth management initiatives, and expand brand relevance across occasions


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Scaling our next wave brands

Expand distribution, make disciplined marketing investments, and build awareness by leveraging our brand-building, commercial execution, and distribution capabilities to scale our brands and capture growth opportunities

Diversifying with discipline into new growth segments

Invest behind organic growth opportunities for our existing portfolio, supplemented by targeted investments and acquisitions, including by selectively expanding into new consumer demand spaces aimed at sustainable consumer trends

Underpinning all three growth pillars are our consumer insights capabilities, which we intend to continue to strengthen through our ongoing digital acceleration initiatives aimed at driving results by enhancing our technology, data, and digital capabilities in key areas. We believe advancing these capabilities will enable us to operate with greater speed and agility, deepen our understanding of evolving consumer behaviors and occasions, and make more informed decisions across our business. Additionally, we believe our continued focus on maintaining a strong balance sheet provides a solid financial foundation to support our broader strategic initiatives.

Our business strategy for the Beer segment focuses on upholding our leadership position in the U.S. beer market, including as a leader in the high-end segment, and continuing to seek to grow our high-end imported beer brands through maintenance of leading margins, enhancements to our results of operations and operating cash flow, and exploring new avenues for growth. Additionally, we continue to invest in the next phase of modular capacity additions necessary to support our anticipated future growth with activities under our Brewery Projects. We now expect commercial production at the Veracruz Brewery to commence at the beginning of Fiscal 2028.

Our business strategy for the Wine and Spirits segment continues to focus on delivering long-term growth. With our portfolio of exclusively higher-end brands and our continued focus on operational efficiencies, we remain committed to improving margins and driving growth. We intend to expand our brands across U.S. wholesale, international markets, and DTC channels (including hospitality) to maximize our total addressable market opportunity by leveraging our global, omni-channel capabilities.

Marketing, sales, and distribution of our products are primarily managed on a geographic basis allowing us to leverage leading market positions. In addition, market dynamics and consumer trends vary across each of our markets. Within our primary market in the U.S., we offer a range of beverage alcohol products across the imported beer, ABA, and branded wine and spirits categories, with generally separate distribution networks utilized for (i) our beer portfolio and (ii) our wine and spirits portfolio. The environment for our products is competitive in each of our markets.

We remain committed to our long-term financial model of: growing sales, expanding margins, and increasing cash flow in order to continue to achieve comparable earnings per share growth as well as our target ratios for (i) comparable net leverage and (ii) dividend payout; investing to support the growth of our business; and delivering additional returns to stockholders through periodic share repurchases. Our results of operations and financial condition have been and may continue to be affected by the dynamic and evolving consumer environment largely driven by ongoing economic uncertainty and additional headwinds from other socioeconomic factors. These factors impacting consumers may include subdued spend, depressed sentiment, value-seeking behaviors, higher prices and reductions in the discretionary income available to purchase our products, including from increased fuel prices, elevated unemployment, inflation, other unfavorable global and regional economic conditions, demographic trends in the U.S., global supply chain disruptions and constraints, geopolitical events and tensions, wars, and military conflicts, including the conflict in the Middle East.

Developments in international trade relations, including significant additional changes in U.S. trade policy and actions which may include threatened, new, and increased tariffs imposed by the U.S. government on other countries, retaliatory tariffs and actions imposed on certain U.S. goods, and subsequent modifications and delays to or invalidation of various tariffs as well as associated litigation and developments have produced heightened uncertainty


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with respect to trade and tariff policies and regulations affecting trade between the U.S. and other countries, which could continue to alter the global trade environment. For example, the U.S. government has imposed tariffs on certain product imports, including on aluminum and aluminum derivatives, and certain other countries have implemented tariffs and other actions on U.S. goods, such as boycotts and tariffs on certain product imports originating from the U.S. imposed by the Canadian federal and some provincial governments and retaliatory tariffs in other international markets, although some of these tariffs were subsequently modified, delayed, suspended, or invalidated. Various tariffs and other actions negatively impacted our results of operations for Fiscal 2026 and are expected to continue to have a negative impact for Fiscal 2027. In April 2026, the U.S. government removed beer made from malt, which includes our beer products, from the scope of the Section 232 aluminum and aluminum derivative tariffs that had been in place at various rates since February 2025.

We expect some or all of these market conditions and their impacts to continue during the remainder of Fiscal 2027 which could have a material impact on our results of operations and financial condition. We intend to continue to monitor the dynamic and evolving consumer and socioeconomic environments and their impacts on our business. In addition, we have executed the majority of the work associated with the 2025 Restructuring Initiative, which is an enterprise-wide cost savings and restructuring initiative designed to help optimize the performance of our business, including through enhanced organizational efficiency and optimized expenditures across our organization. We also intend to continue our commodity and foreign exchange hedging programs. However, there can be no assurance that we will be able to adequately respond to softer consumer demand trends or fully mitigate rising costs, including as a result of new or increased tariffs, through increased selling prices, cost, productivity, efficiency, and inventory management initiatives, optimized marketing plans, and/or our commodity and foreign exchange hedging programs. Furthermore, to the extent severe weather events that impact our business, such as wildfires, droughts, floods, extreme heat, and/or late frosts, or other weather conditions that constrain purchasing occasions for our consumers, continue to occur or accelerate in future periods, it could have a material impact on our results of operations and financial condition.

2025 Restructuring Initiative

We have implemented the 2025 Restructuring Initiative which is expected to yield over $200 million in net annualized cost savings by Fiscal 2028. The majority of the work associated with the 2025 Restructuring Initiative was executed within Fiscal 2026. The 2025 Restructuring Initiative is estimated to result in nearly $130 million of cumulative pre-tax costs once all phases are fully implemented. In connection with the 2025 Restructuring Initiative, we recognized $5.5 million of pre-tax restructuring costs in Six Months 2027 and $127.4 million of cumulative pre-tax costs since the inception of this initiative. These costs were included in selling, general, and administrative costs within our consolidated results. For additional information on the 2025 Restructuring Initiative, refer to Note 2.

Recent Development

SpikedAde acquisition

In October 2026, we acquired the SpikedAde business, a spirit-based RTD beverage brand for an initial purchase price of $75 million. The agreement also provides for contingent consideration of up to $278 million payable over five years based on the future performance of the SpikedAde business. The SpikedAde results of operations will be reported in the Beer segment and will be included in our consolidated results of operations from the date of acquisition. This transaction supports our strategy to selectively expand into new demand spaces aimed at sustainable consumer trends. For additional information, refer to Note 6.


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Acquisitions, Divestitures, and Investments

Beer segment

HOPWTR

In April 2026, we purchased the remaining ownership interest in HOPWTR, a premium non-alcoholic brand crafted with hops, adaptogens, and nootropics, which has been a part of our corporate ventures portfolio since 2021. This acquisition supports our strategic focus on meeting the evolving needs of our consumers.

Wine and Spirits segment

New Zealand Wine Divestitures

2025 Wine Divestitures

These Wine and Spirits segment divestitures support our strategic focus on consumer-led premiumization trends and meeting the evolving needs of our consumers.

Corporate Operations and Other segment

Corporate ventures investment

As of August 31, 2025, we evaluated an equity method investment, made through our corporate venture capital function, and determined there was an other-than-temporary impairment due to business underperformance.

For additional information on these acquisitions, divestitures, and investments refer to Notes 5 and 6.

RESULTS OF OPERATIONS

Financial Highlights

References to organic throughout the following discussion exclude the impact of the 2025 Wine Divestitures, where appropriate.

Second Quarter 2027 compared to Second Quarter 2026

Net sales increased 6% primarily driven by 5.5% and 15.4% shipment volume growth within the Beer and Wine and Spirits segments, respectively. While our net sales benefited from shipment volume growth, we believe they continued to be impacted by the economic uncertainty and socioeconomic factors discussed above.

Operating income decreased 8% primarily due to (i) Second Quarter 2027 asset impairment and related expenses, (ii) higher marketing spend, and (iii) unfavorable short-term incentive accruals, partially offset by (i) the shipment volume growth, (ii) lower tariff costs as compared to Second Quarter 2026, and (iii) continued successful execution of efficiency and cost optimization initiatives, including the 2025 Restructuring Initiative.

Net income attributable to CBI and diluted net income per common share attributable to CBI increased 21% and 25%, respectively, primarily due to a lower provision for income taxes, partially offset by the items discussed above.


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Six Months 2027 compared to Six Months 2026

Net sales increased 1% primarily due to 3.7% shipment volume growth within the Beer segment, partially offset by the loss of net sales as a result of the 2025 Wine Divestitures despite 11.5% organic shipment volume growth within the Wine and Spirits segment. While our net sales benefited from shipment volume growth, we believe they continued to be impacted by the economic uncertainty and socioeconomic factors discussed above.

Operating income increased 4% primarily due to (i) shipment volume growth within the Beer segment, (ii) favorable Comparable Adjustments led by higher net gains recognized on undesignated commodity derivative contracts for Six Months 2027 compared with Six Months 2026, (iii) lower tariff costs as compared to Six Months 2026, and (iv) continued successful execution of efficiency and cost optimization initiatives, including the 2025 Restructuring Initiative, partially offset by (i) higher marketing spend and (ii) the lower Wine and Spirits segment net sales as a result of the 2025 Wine Divestitures.

Net income attributable to CBI and diluted net income per common share attributable to CBI increased 24% and 28%, respectively, primarily due to a lower provision for income taxes and the items discussed above.

Comparable Adjustments

Management excludes items that affect comparability from its evaluation of the results of each operating segment as these Comparable Adjustments are not reflective of core operations of the segments. Segment operating performance and the incentive compensation of segment management are evaluated based on core segment operating income (loss) which does not include the impact of these Comparable Adjustments.

As more fully described herein and in the related Notes, the Comparable Adjustments that impacted comparability in our segment results for each period are as follows:


	Second Quarter 2027		Second Quarter 2026		Six Months 2027		Six Months 2026
(in millions)
Cost of product sold
Settlements of undesignated commodity derivative contracts	$	(14.8)	$	4.2	$	(24.2)	$	6.7
Strategic business reconfiguration costs	(3.7)		(1.2)		(4.3)		(1.6)
Flow through of inventory step-up	(0.1)		(0.8)		(1.1)		(1.7)
Net gain (loss) on undesignated commodity derivative contracts	3.4		13.0		52.7		(4.7)



Comparable Adjustments, Cost of product sold	(15.2)		15.2		23.1		(1.3)
Selling, general, and administrative expenses
Strategic business reconfiguration costs	(14.2)		—		(13.9)		(5.2)
2025 Restructuring Initiative	(4.9)		(8.3)		(5.5)		(21.6)
Transition services agreements activity	(4.6)		(10.0)		(9.7)		(15.5)

Gain (loss) on sale of business	(1.8)		(14.9)		(4.3)		(16.3)

Other gains (losses)	(1.1)		5.8		(2.1)		3.7
Comparable Adjustments, Selling, general, and administrative expenses	(26.6)		(27.4)		(35.5)		(54.9)


Asset impairment and related expenses	(49.8)		—		(68.1)		(52.1)

Comparable Adjustments, Operating income (loss)	$	(91.6)	$	(12.2)	$	(80.5)	$	(108.3)

Comparable Adjustments, Income (loss) from unconsolidated investments	$	—	$	(10.1)	$	—	$	(10.1)


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Cost of product sold

Undesignated commodity derivative contracts

Net gain (loss) on undesignated commodity derivative contracts represents a net gain (loss) from the changes in fair value of undesignated commodity derivative contracts. The net gain (loss) is reported outside of segment operating results until such time that the underlying exposure is recognized in the segment operating results. At settlement, the net gain (loss) from the changes in fair value of the undesignated commodity derivative contracts is reported in the appropriate operating segment, allowing the results of our operating segments to reflect the economic effects of the commodity derivative contracts without the resulting unrealized mark to fair value volatility.

Strategic business reconfiguration costs

We recognized costs primarily in connection with losses on write-downs of excess inventory resulting from our initiatives to streamline operations, improve efficiencies, and reduce our cost structure primarily within our Wine and Spirits segment.

Flow through of inventory step-up

In connection with acquisitions, the allocation of purchase price in excess of book value for certain inventories on hand at the date of acquisition is referred to as inventory step-up. Inventory step-up represents an assumed manufacturing profit attributable to the acquired business prior to acquisition.

Selling, general, and administrative expenses

Strategic business reconfiguration costs

We recognized (i) costs in connection with activities intended to streamline operations, improve efficiencies, and reduce our cost structure and (ii) a loss on settlement of a receivable related to the sale of a previously-owned facility (Second Quarter 2027, Six Months 2027).

2025 Restructuring Initiative

We recognized costs in connection with an enterprise-wide cost savings and restructuring initiative designed to help optimize the performance of our business.

Transition services agreements activity

We recognized costs in connection with transition services agreements related to the previous sales of portions of our wine and spirits business.

Gain (loss) on sale of business

We recognized a net gain (loss) largely in connection with the 2025 Wine Divestitures (Second Quarter 2026, Six Months 2027, Six Months 2026).

Other gains (losses)

We recognized other gains (losses) largely due to a net gain from the sales of assets (Second Quarter 2026, Six Months 2026).

Asset impairment and related expenses

We recognized (i) impairments on assets held for sale associated with management’s plan to divest the Nelson’s Green Brier business (Second Quarter 2027, Six Months 2027) and on then-existing net assets held for sale in connection with the New Zealand Wine Divestitures (Six Months 2027) and (ii) contract liabilities and inventory obsolescence expenses associated with the 2025 Wine Divestitures, partially offset by changes in the carrying value of those then-existing net assets held for sale (Six Months 2026). For additional information, refer to Note 5.

Income (loss) from unconsolidated investments

We recognized (i) unrealized net losses from the changes in fair value of our securities measured at fair value (Second Quarter 2026, Six Months 2026), (ii) other losses related to an investment made through our corporate venture capital


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function (Second Quarter 2026, Six Months 2026), and (iii) an impairment of an equity method investment (Second Quarter 2026, Six Months 2026).

Business Segments

Second Quarter 2027 compared to Second Quarter 2026

Net sales


	Second Quarter 2027		Second Quarter 2026		Dollar Change		Percent Change
(in millions)
Beer	$	2,473.6	$	2,345.0	$	128.6	5	%
Wine and Spirits	159.4		136.0		23.4		17	%
Consolidated net sales	$	2,633.0	$	2,481.0	$	152.0	6	%


	Beer segment	Second Quarter 2027		Second Quarter 2026		Dollar Change		Percent Change
(in millions, branded product, 24-pack, 12-ounce case equivalents)
Net sales		$	2,473.6	$	2,345.0	$	128.6	5	%

Shipments		123.9		117.4				5.5	%

Depletions								(0.6	%)

The increase in Beer net sales is due to (i) $130.2 million of shipment volume growth, as distributors sought to rebuild inventory days-on-hand and (ii) $12.8 million of favorable impact from pricing in select markets, partially offset by $14.4 million of unfavorable product mix primarily from a shift in package types.


	Wine and Spirits segment	Second Quarter 2027		Second Quarter 2026		Dollar Change		Percent Change
(in millions, branded product, 9-liter case equivalents)
Net sales		$	159.4	$	136.0	$	23.4	17	%

Shipments		1.5		1.3				15.4	%







Depletions								10.2	%

The increase in Wine and Spirits net sales is primarily due to $21.4 million of branded wine and spirits shipment volume growth and favorable product mix. The shipment volume growth benefited from strategic pricing actions taken on select brands in our U.S. wholesale channel.

Gross profit


	Second Quarter 2027		Second Quarter 2026		Dollar Change		Percent Change
(in millions)
Beer	$	1,337.7	$	1,240.0	$	97.7	8	%
Wine and Spirits	70.5		54.8		15.7		29	%
Comparable Adjustments	(15.2)		15.2		(30.4)		NM
Consolidated gross profit	$	1,393.0	$	1,310.0	$	83.0	6	%


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			The increase in Beer gross profit is due to (i) $68.8 million of shipment volume growth, (ii) $33.9 million of decreased cost of product sold, and (iii) the $12.8 million favorable impact from pricing, partially offset by $17.8 million of unfavorable product mix. The decrease in cost of product sold is primarily due to (i) $24.1 million of lower tariffs as compared to Second Quarter 2026, largely on aluminum imports under Section 232, (ii) $23.3 million of favorable fixed cost absorption related to increased production levels as compared to Second Quarter 2026, and (iii) $9.4 million of lower depreciation, partially offset by the following increases (i) $10.3 million of warehousing and obsolescence costs and (ii) $10.2 million of materials costs, including glass, aluminum, and paper.


			The increase in Wine and Spirits gross profit is primarily due to (i) $11.1 million of branded wine and spirits shipment volume growth and (ii) $7.7 million of decreased cost of product sold. The decrease in cost of product sold is largely driven by U.S. tariff claims recoveries and cost savings measures as a result of the 2025 Restructuring Initiative, partially offset by higher transportation and warehousing costs as compared to Second Quarter 2026.

Gross profit as a percent of net sales increased to 52.9% for Second Quarter 2027 compared with 52.8% for Second Quarter 2026. This increase was led by rate growth from lower cost of product sold within the Beer and Wine and Spirits segments, contributing approximately 130 basis points and approximately 30 basis points, respectively. These increases were partially offset by (i) an unfavorable change in Comparable Adjustments of 115 basis points and (ii) approximately 40 basis points of unfavorable product mix shift within the Beer segment.

Selling, general, and administrative expenses


	Second Quarter 2027		Second Quarter 2026		Dollar Change		Percent Change
(in millions)
Beer	$	373.5	$	288.4	$	85.1	30	%
Wine and Spirits	64.4		74.6		(10.2)		(14	%)
Corporate Operations and Other	73.7		45.6		28.1		62	%
Comparable Adjustments	26.6		27.4		(0.8)		NM
Consolidated selling, general, and administrative expenses	$	538.2	$	436.0	$	102.2	23	%


			The increase in Beer selling, general, and administrative expenses is primarily due to $54.5 million and $30.7 million of increased marketing spend and general and administrative expenses, respectively. Marketing as a percentage of net sales increased year-over-year in continued support of our high-end imported beer brands. The increase in general and administrative expenses is primarily due to higher compensation and benefits, led by unfavorable short-term incentive accruals as compared to Second Quarter 2026.


			The decrease in Wine and Spirits selling, general, and administrative expenses is primarily due to $5.7 million and $5.0 million of decreased marketing spend and general and administrative expenses, respectively. The decrease in marketing spend is driven by investment optimization for our smaller portfolio of exclusively higher-end wine and spirits brands. The decrease in general and administrative expenses was largely driven by cost savings measures as a result of the 2025 Restructuring Initiative.


			The increase in Corporate Operations and Other selling, general, and administrative expenses is largely driven by higher compensation and benefits, led by unfavorable short-term incentive accruals, as compared to Second Quarter 2026.

Selling, general, and administrative expenses as a percent of net sales increased to 20.4% for Second Quarter 2027 as compared to 17.6% for Second Quarter 2026. This increase was driven by rate growth from higher selling, general,


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and administrative expenses within the Beer and Corporate Operations and Other segments, contributing approximately 240 basis points and 105 basis points, respectively. These increases were partially offset by lower selling, general, and administrative expenses within the Wine and Spirits segment, contributing approximately 55 basis points of rate decline.

Operating income (loss)


	Second Quarter 2027		Second Quarter 2026		Dollar Change		Percent Change
(in millions)
Beer	$	964.2	$	951.6	$	12.6	1	%
Wine and Spirits	6.1		(19.8)		25.9		131	%
Corporate Operations and Other	(73.7)		(45.6)		(28.1)		(62	%)
Comparable Adjustments	(91.6)		(12.2)		(79.4)		NM
Consolidated operating income (loss)	$	805.0	$	874.0	$	(69.0)	(8	%)


			The increase in Beer operating income is primarily attributable to the shipment volume growth, lower cost of product sold, and favorable impact from pricing, partially offset by the higher marketing spend and compensation and benefits, led by unfavorable short-term incentive accruals, as described above.


			The increase in Wine and Spirits operating income is primarily attributable to the shipment volume growth, U.S. tariff claims recoveries, and cost savings measures as a result of the 2025 Restructuring Initiative, as described above.


			As previously discussed, the increase in Corporate Operations and Other operating loss is largely attributable to the higher compensation and benefits as compared to Second Quarter 2026.

Income (loss) from unconsolidated investments


	Second Quarter 2027		Second Quarter 2026		Dollar Change		Percent Change
(in millions)
Equity in earnings (losses) from equity method investees	$	7.0	$	3.0	$	4.0	133	%
Impairment of equity method investments	—		(1.5)		1.5		NM
Unrealized net gain (loss) on securities measured at fair value	0.8		(5.0)		5.8		116	%

Income (loss) from unconsolidated investments	$	7.8	$	(3.5)	$	11.3	NM

Interest expense, net

Interest expense, net decreased to $83.4 million for Second Quarter 2027 as compared to $87.6 million for Second Quarter 2026. This decrease of $4.2 million, or 5%, is due to approximately $235 million of lower average borrowings, partially offset by approximately five basis points of higher weighted average interest rates. For additional information, refer to Note 8.

(Provision for) benefit from income taxes

The provision for income taxes decreased to $147.1 million for Second Quarter 2027 from $296.8 million for Second Quarter 2026. Our effective tax rate for Second Quarter 2027 was 20.2% as compared with 37.9% for Second Quarter


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2026. In comparison to prior year, our effective tax rate was primarily impacted by a net income tax benefit resulting from changes to valuation allowances; partially offset by the resolution of various tax examinations and assessments related to prior periods. For additional information, refer to Note 9.

Net income (loss) attributable to CBI

Net income attributable to CBI increased to $565.8 million for Second Quarter 2027 from $466.0 million for Second Quarter 2026. This increase of $99.8 million, or 21%, is primarily attributable to the (i) lower provision for income taxes and (ii) shipment volume growth, partially offset by (i) Second Quarter 2027 asset impairment and related expenses, (ii) higher marketing spend, and (iii) unfavorable short-term incentive accruals. Additionally, Second Quarter 2027 benefited from the continued successful execution of efficiency and cost optimization initiatives, including the 2025 Restructuring Initiative.

Six Months 2027 compared to Six Months 2026

Net sales


	Six Months 2027		Six Months 2026		Dollar Change		Percent Change
(in millions)
Beer	$	4,757.1	$	4,579.5	$	177.6	4	%
Wine and Spirits	308.6		416.5		(107.9)		(26	%)

Consolidated net sales	$	5,065.7	$	4,996.0	$	69.7	1	%


	Beer segment	Six Months 2027		Six Months 2026		Dollar Change		Percent Change
(in millions, branded product, 24-pack, 12-ounce case equivalents)
Net sales		$	4,757.1	$	4,579.5	$	177.6	4%

Shipments		237.2		228.7				3.7%

Depletions								(0.5%)

The increase in Beer net sales is due to (i) $170.9 million of shipment volume growth, as distributors sought to rebuild inventory days-on-hand, and (ii) $30.7 million of favorable impact from pricing in select markets, partially offset by $24.0 million of unfavorable product mix primarily from a shift in package types. Additionally, we expect shipment volume to generally align with depletion volume for Fiscal 2027.


	Wine and Spirits segment	Six Months 2027		Six Months 2026		Dollar Change		Percent Change
(in millions, branded product, 9-liter case equivalents)
Net sales		$	308.6	$	416.5	$	(107.9)	(26	%)

Shipments		2.9		5.2				(44.2	%)
Organic shipments (1)		2.9		2.6				11.5	%


Depletions (1)								8.7	%

(1)Includes adjustments to remove volumes associated with the 2025 Wine Divestitures for the period March 1, 2025, through May 31, 2025.


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The decrease in Wine and Spirits net sales is due to $142.0 million from the 2025 Wine Divestitures that are no longer part of our business, partially offset by a $34.1 million increase in organic net sales. The increase in organic net sales is primarily driven by $38.0 million of branded wine and spirits shipment volume growth, which benefited from strategic pricing actions on select brands in our U.S. wholesale channel, partially offset by a decline in non-branded bulk sales. Additionally, we expect shipment volume to decline during the second half of Fiscal 2027 as we continue to progress against mutually agreed-upon finished goods inventory reductions with key distributors.

Gross profit


	Six Months 2027		Six Months 2026		Dollar Change		Percent Change
(in millions)
Beer	$	2,555.9	$	2,427.0	$	128.9	5	%
Wine and Spirits	134.6		150.9		(16.3)		(11	%)
Comparable Adjustments	23.1		(1.3)		24.4		NM
Consolidated gross profit	$	2,713.6	$	2,576.6	$	137.0	5	%


			The increase in Beer gross profit is primarily due to (i) a $90.7 million increase in shipment volume, (ii) $35.7 million of reduced cost of product sold, and (iii) the $30.7 million of favorable impact from pricing, partially offset by $28.2 million of unfavorable product mix. The reduced cost of product sold is primarily due to (i) $56.4 million of favorable fixed cost absorption related to increased production levels as compared to Six Months 2026, (ii) $14.4 million of lower depreciation, and (iii) $8.2 million of lower tariffs as compared to Six Months 2026, largely on aluminum imports under Section 232, partially offset by (i) $22.6 million of higher material costs, including glass, aluminum, paper, and starch, and (ii) $18.0 million of higher warehousing and obsolescence costs.


			The decrease in Wine and Spirits gross profit is due to $34.1 million from the 2025 Wine Divestitures that is no longer part of our business, partially offset by a $17.8 million increase in organic gross profit. The increase in organic gross profit is primarily attributable to (i) a $25.3 million increase in branded wine and spirits shipment volume and (ii) a $10.0 million decrease in cost of product sold, partially offset by (i) $11.9 million of unfavorable product mix and (ii) a $5.7 million decrease from strategic pricing actions. The decrease in cost of product sold is largely driven by U.S. tariff claims recoveries and cost savings measures as a result of the 2025 Restructuring Initiative, partially offset by higher transportation and warehousing costs as compared to Six Months 2026.

Gross profit as a percent of net sales increased to 53.6% for Six Months 2027 compared with 51.6% for Six Months 2026. This increase was primarily due to rate growth from (i) divestitures of lower-margin brands, contributing approximately 80 basis points, (ii) 70 basis points and 20 basis points from lower cost of product sold within the Beer and Wine and Spirits segments, respectively, (iii) a favorable change in Comparable Adjustments, contributing approximately 50 basis points, and (iv) approximately 30 basis points of favorable impact from beer pricing. These increases were partially offset by approximately 30 basis points of rate decline from unfavorable product mix shift within both the Beer and Wine and Spirits segments, respectively.


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Selling, general, and administrative expenses


	Six Months 2027		Six Months 2026		Dollar Change		Percent Change
(in millions)
Beer	$	700.3	$	602.0	$	98.3	16	%
Wine and Spirits	129.6		176.7		(47.1)		(27	%)
Corporate Operations and Other	129.8		103.1		26.7		26	%
Comparable Adjustments	35.5		54.9		(19.4)		NM
Consolidated selling, general, and administrative expenses	$	995.2	$	936.7	$	58.5	6	%


			The increase in Beer selling, general, and administrative expenses is primarily driven by $59.7 million and $38.8 million of increased marketing spend and general and administrative expenses, respectively. Marketing as a percentage of net sales increased year-over-year in continued support of our high-end imported beer brands. The increase in general and administrative expenses is primarily due to higher compensation and benefits, led by unfavorable short-term incentive accruals as compared to Six Months 2026.


			The decrease in Wine and Spirits selling, general, and administrative expenses is primarily driven by $24.2 million and $22.2 million of decreased marketing spend and general and administrative expenses, respectively. The decrease in marketing spend is primarily driven by our smaller portfolio of exclusively higher-end wine and spirits brands. The decrease in general and administrative expenses is largely driven by cost savings measures as a result of the 2025 Restructuring Initiative.


			The increase in Corporate Operations and Other selling, general, and administrative expenses is largely due to higher compensation and benefits, led by unfavorable short-term incentive accruals compared to Six Months 2026.

Selling, general, and administrative expenses as a percent of net sales increased to 19.6% for Six Months 2027 as compared with 18.7% for Six Months 2026. The increase is primarily driven by (i) 125 basis points and approximately 50 basis points of rate growth from higher selling, general, and administrative expenses within the Beer and Corporate Operations and Other segments, respectively, and (ii) approximately 50 basis points of unfavorable impact from the 2025 Wine Divestitures. These increases were partially offset by (i) approximately 100 basis points of rate decline from decreases in selling, general, and administrative expenses within the Wine and Spirits segment and (ii) an unfavorable change in Comparable Adjustments, contributing approximately 40 basis points of rate decline.

Operating income (loss)


	Six Months 2027		Six Months 2026		Dollar Change		Percent Change
(in millions)
Beer	$	1,855.6	$	1,825.0	$	30.6	2	%
Wine and Spirits	5.0		(25.8)		30.8		119	%
Corporate Operations and Other	(129.8)		(103.1)		(26.7)		(26	%)
Comparable Adjustments	(80.5)		(108.3)		27.8		NM
Consolidated operating income (loss)	$	1,650.3	$	1,587.8	$	62.5	4	%


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			The increase in Beer operating income is primarily attributable to the shipment volume growth and lower cost of product sold, partially offset by the higher marketing spend and compensation and benefits, led by unfavorable short-term incentive accruals, as described above.


			The increase in Wine and Spirits operating income is primarily attributable to (i) the organic branded wine and spirits shipment volume growth, (ii) lower marketing spend, (iii) cost savings measures as a result of the 2025 Restructuring Initiative, and (iv) U.S. tariff claims recoveries, partially offset by the loss of net sales as a result of the 2025 Wine Divestitures, as described above.


			As previously discussed, the increase in Corporate Operations and Other operating loss is largely due to the higher compensation and benefits as compared to Six Months 2026.

Income (loss) from unconsolidated investments


	Six Months 2027		Six Months 2026		Dollar Change		Percent Change
(in millions)
Equity in earnings (losses) from equity method investees	$	7.5	$	(0.5)	$	8.0	NM
Impairment of equity method investments	—		(1.5)		1.5		NM
Unrealized net gain (loss) on securities measured at fair value	0.8		(5.0)		5.8		116	%

Income (loss) from unconsolidated investments	$	8.3	$	(7.0)	$	15.3	219	%

Interest expense, net

Interest expense, net decreased to $169.2 million for Six Months 2027 as compared to $186.5 million for Six Months 2026. This decrease of $17.3 million, or 9%, is primarily due to approximately $570 million of lower average borrowings. For additional information, refer to Note 8.

(Provision for) benefit from income taxes

The provision for income taxes decreased to $235.2 million for Six Months 2027 from $384.4 million for Six Months 2026. Our effective tax rate for Six Months 2027 was 15.8% as compared with 27.6% for Six Months 2026. In comparison to prior year, our effective tax rate was primarily impacted by a net income tax benefit resulting from changes to valuation allowances; partially offset by the resolution of various tax examinations and assessments related to prior periods.

We now expect our reported effective tax rate for Fiscal 2027 to be in the range of 11% to 13%. This range includes an estimated income tax benefit of approximately $100 million to $150 million to be recognized during the three months ending November 30, 2026, as a result of certain foreign tax reform enacted in September 2026.

For additional information, refer to Note 9.

Net income (loss) attributable to CBI

Net income attributable to CBI increased to $1,219.6 million for Six Months 2027 from $982.1 million for Six Months 2026. This increase of $237.5 million, or 24%, is primarily attributable to the (i) lower provision for income taxes, (ii) shipment volume growth within the Beer segment, (iii) organic shipment volume growth within the Wine and Spirits segment, and (iv) lower cost of product sold, partially offset by (i) higher marketing spend, (ii) the loss of net sales as a result of the 2025 Wine Divestitures, and (iii) unfavorable short-term incentive accruals. Additionally, Six Months 2027


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benefited from the continued successful execution of efficiency and cost optimization initiatives, including the 2025 Restructuring Initiative.

LIQUIDITY AND CAPITAL RESOURCES

General

Our primary source of liquidity has been cash flow from operating activities. Our ability to consistently generate robust cash flow from our operations is one of our most significant financial strengths. It enables us to invest in our people and our brands, make capital investments and strategic acquisitions, provide a cash dividend program, and repurchase shares of our common stock. Our largest use of cash in our operations is for purchasing and carrying inventories and carrying seasonal accounts receivable. Historically, we have used this cash flow to repay our short-term borrowings and fund capital expenditures. Additionally, we use our short-term borrowings, including borrowings under our commercial paper program, to support our working capital requirements, capital expenditures, and other general corporate purposes, as well as to maintain our access to the capital markets.

We seek to maintain adequate liquidity to meet working capital requirements, fund capital expenditures, and repay scheduled principal and interest payments on debt. Absent deterioration of market conditions, we believe that cash flows from operating and financing activities will provide adequate resources to satisfy our working capital, scheduled principal and interest payments on debt, anticipated dividend payments, periodic share repurchases, and planned capital expenditure requirements for both our short-term and long-term capital needs.

We have an agreement with a financial institution for payment services and to facilitate a voluntary supply chain finance program through this participating financial institution. The program is available to certain of our suppliers allowing them the option to manage their cash flow. We are not a party to the agreements between the participating financial institution and the suppliers in connection with the program. Our rights and obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted. As of August 31, 2026, and February 28, 2026, the amount payable to this participating financial institution for suppliers who voluntarily participate in the supply chain finance program was $61.7 million and $50.7 million, respectively, and was included with accounts payable on our consolidated balance sheets. We account for payments made under the supply chain finance program the same as our other accounts payable, as a reduction to our cash flow from operating activities.

Cash Flows


	Six Months 2027		Six Months 2026		Dollar Change
(in millions)
Net cash provided by (used in):
Operating activities	$	1,478.6	$	1,489.3	$	(10.7)
Investing activities	(350.4)		464.8		(815.2)
Financing activities	(1,131.5)		(1,953.1)		821.6
Effect of exchange rate changes on cash and cash equivalents	(0.6)		2.9		(3.5)
Net increase (decrease) in cash and cash equivalents	$	(3.9)	$	3.9	$	(7.8)


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Operating activities

The decrease in net cash provided by (used in) operating activities consists of:


	Six Months 2027		Six Months 2026		Dollar Change
(in millions)
Net income (loss)	$	1,254.2	$	1,009.9	$	244.3

Deferred tax provision (benefit)	26.8		277.6		(250.8)
Depreciation	194.4		207.9		(13.5)
Stock-based compensation	34.9		32.1		2.8
Noncash lease expense	67.0		62.6		4.4

Asset impairment and related expenses	68.1		52.1		16.0




Other non-cash adjustments	12.4		(65.6)		78.0
Change in operating assets and liabilities, net of effects from purchase and sale of business	(179.2)		(87.3)		(91.9)
Net cash provided by (used in) operating activities	$	1,478.6	$	1,489.3	$	(10.7)

The $91.9 million net change in operating assets and liabilities was largely driven by lower accounts receivable for the Wine and Spirits segment due to lower net sales, reflecting the impact of the 2025 Wine Divestitures, partially offset by (i) higher accounts receivable for the Beer segment as a result of timing of sales and collections and (ii) favorable changes in contract liabilities in connection with distribution arrangements for our U.S. wine and spirits brand portfolio. Additionally, net cash provided by operating activities was negatively impacted by higher Six Months 2027 income tax payments as compared to Six Months 2026.

Investing activities

Net cash provided by (used in) investing activities decreased to $(350.4) million for Six Months 2027 from $464.8 million for Six Months 2026. This decrease of $815.2 million, or 175%, was primarily due to $837.2 million lower proceeds from sale of business, driven by the 2025 Wine Divestitures, partially offset by $56.0 million of reduced capital expenditures for Six Months 2027 as compared to Six Months 2026.

Financing activities

The decrease in net cash used in financing activities consisted of:


	Six Months 2027		Six Months 2026		Dollar Change
(in millions)
Net proceeds from (payments of) debt, current and long-term, and related activities	$	(261.0)	$	(962.6)	$	701.6
Dividends paid	(353.8)		(361.1)		7.3
Purchases of treasury stock and payment of related excise tax	(463.5)		(613.9)		150.4
Net cash provided by (used in) stock-based compensation activities	(2.9)		3.5		(6.4)
Distributions to noncontrolling interests	(50.0)		(17.5)		(32.5)
Payment of contingent consideration	(0.3)		(1.5)		1.2

Net cash provided by (used in) financing activities	$	(1,131.5)	$	(1,953.1)	$	821.6


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Debt

Total debt outstanding as of August 31, 2026, amounted to $10,315.7 million, a decrease of $252.8 million, or 2%, from February 28, 2026. This decrease consisted of:

Debt issuance

Debt repayment and redemption

Bank facilities

In September 2026, we entered into the 2026 Term Credit Agreement, which provides for a nine-month delayed draw $300.0 million term loan facility, available in up to two draws. The balance is due and payable two years after the initial funding date, if any, occurs. There are no borrowings outstanding under the 2026 Term Credit Agreement.

Senior notes

Issuance

In May 2026, we issued the 4.85% May 2026 Senior Notes. Proceeds from this offering, net of discount and debt issuance costs, were $496.7 million.

Redemption

On September 18, 2026, we redeemed the 4.35% May 2022 Senior Notes prior to maturity using commercial paper borrowings at a redemption price equal to 100% of the outstanding principal amount plus accrued and unpaid interest.

On May 18, 2026, we redeemed the 3.70% December 2016 Senior Notes prior to maturity using proceeds from the 4.85% May 2026 Senior Notes and commercial paper borrowings at a redemption price equal to 100% of the outstanding principal amount plus accrued and unpaid interest.

General

The majority of our outstanding borrowings as of August 31, 2026, consisted of fixed-rate senior unsecured notes, with maturities ranging from calendar 2027 to calendar 2050.

Additionally, we have a commercial paper program which provides for the issuance of up to an aggregate principal amount of $2.25 billion of commercial paper. Our commercial paper program is backed by unused commitments under our revolving credit facility under our 2025 Credit Agreement. Accordingly, outstanding borrowings under our commercial paper program reduce the amount available under our revolving credit facility.

We do not have purchase commitments from buyers for our commercial paper and, therefore, our ability to issue commercial paper is subject to market demand. If the commercial paper market is not available to us for any reason when commercial paper borrowings mature, we expect to utilize unused commitments under our revolving credit


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facility under our 2025 Credit Agreement to repay commercial paper borrowings. We do not expect that fluctuations in demand for commercial paper will affect our liquidity given our borrowing capacity available under our revolving credit facility.

We had the following remaining borrowing capacity available under our 2025 Credit Agreement:


	August 31, 2026		September 30, 2026
(in millions)
Revolving credit facility (1)	$	2,122.6	$	1,632.1

(1)Net of outstanding revolving credit facility borrowings and outstanding letters of credit under our 2025 Credit Agreement and outstanding borrowings under our commercial paper program (excluding unamortized discount) of $116.5 million and $607.0 million as of August 31, 2026, and September 30, 2026, respectively.

The financial institutions participating in our 2025 Credit Agreement have complied with prior funding requests and we believe they will comply with any future funding requests. However, there can be no assurances that any particular financial institution will continue to do so.

As of August 31, 2026, we and our subsidiaries were subject to covenants that are contained in our 2025 Credit Agreement, including those restricting the incurrence of additional subsidiary indebtedness, additional liens, mergers and consolidations, transactions with affiliates, and sale and leaseback transactions, in each case subject to numerous conditions, exceptions, and thresholds. The financial covenants are limited to a minimum interest coverage ratio and a maximum net leverage ratio, both as defined in our 2025 Credit Agreement. As of August 31, 2026, under our 2025 Credit Agreement, the minimum interest coverage ratio was 2.5x and the maximum net leverage ratio was 4.0x.

Our indentures relating to our outstanding senior notes contain certain covenants, including, but not limited to: (i) a limitation on liens on certain assets, (ii) a limitation on certain sale and leaseback transactions, and (iii) restrictions on mergers, consolidations, and the transfer of all or substantially all of our assets to another person.

As of August 31, 2026, we were in compliance with our covenants under our 2025 Credit Agreement and our indentures, and have met all debt payment obligations.

For further discussion and presentation of our borrowings and available sources of borrowing, refer to Note 13 of our consolidated financial statements included in our 2026 Annual Report and Note 8.

Common Stock Dividends

On October 6, 2026, our Board of Directors declared a quarterly cash dividend of $1.03 per share of Class A Stock and $0.93 per share of Class 1 Stock payable on November 13, 2026, to stockholders of record of each class as of the close of business on October 30, 2026.

We currently expect to continue to pay a regular quarterly cash dividend to stockholders of our common stock in the future, but such payments are subject to approval of our Board of Directors and are dependent upon our financial condition, results of operations, capital requirements, and other factors, including those set forth under Item 1A. “Risk Factors” of our 2026 Annual Report.


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Share Repurchase Program

Our Board of Directors authorized the repurchase of our publicly traded common stock of up to $4.0 billion under the 2025 Authorization which expires in February 2028. As of September 30, 2026, total shares repurchased are as follows:


			Class A Stock
	Repurchase Authorization		Dollar Value of Shares Repurchased		Number of Shares Repurchased
(in millions, except share data)
2025 Authorization (1)	$	4,000.0	$	1,453.8	9,429,144

(1)As of September 30, 2026, $2,546.2 million remains available for future share repurchases, excluding the impact of Federal excise tax owed pursuant to the IRA.

Share repurchases under the 2025 Authorization may be accomplished at management’s discretion from time-to-time based on market conditions, our cash and debt position, and other factors as determined by management. Shares may be repurchased through open market or privately negotiated transactions. We may fund future share repurchases with cash generated from operations, proceeds from borrowings, and/or divestiture proceeds. Any repurchased shares will become treasury shares, including shares previously repurchased under the 2025 Authorization. Additionally, share repurchases are dependent upon our financial condition, results of operations, capital requirements, and other factors, including those set forth under Item 1A. “Risk Factors” of our 2026 Annual Report.

For additional information, refer to Note 18 of our consolidated financial statements included in our 2026 Annual Report and Note 10.

Accounting Guidance

Accounting guidance adopted for Six Months 2027 did not have a material impact on our Financial Statements.

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those set forth in, or implied by, such forward-looking statements. All statements other than statements of historical fact included in this Form 10-Q are forward-looking statements, including without limitation:

•The statements under MD&A regarding:

◦our business strategy, including our strategic vision, growth plans, priorities, and pillars, consumer insight capabilities, digital acceleration initiatives, and focus on maintaining a strong balance sheet;

◦our focus on upholding our leadership position in the U.S. beer market, growing our high-end imported beer brands through maintenance of leading margins, enhancing our results of operations and operating cash flow, and exploring new avenues for growth;

◦our repositioned wine and spirits portfolio that we believe is positioned for long-term growth, focus on operational efficiencies and tactical measures, and commitment to improving margins, increasing distribution for key brands, and optimizing growth, as well as expanding our supply channels to maximize our total addressable market opportunity;

◦our beer modular capacity addition activities, including anticipated scope, capacity, costs, capital expenditures, and timeframes for completion, and associated opportunities, including expected timing for commencing commercial production at the Veracruz Brewery;


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◦our innovation, marketing, sales, production, and distribution plans, activities, and strategies, access to and availability of resources and production materials, impacts of government regulations, environmental sustainability, CSR, and human capital strategies, commitments, and aspirations;

◦our long-term financial model, target comparable net leverage and target dividend payout ratios, future operations, financial condition and position, net sales, expenses, hedging programs, cost savings, restructuring, and efficiency initiatives, capital expenditures, effective tax rates and anticipated tax liabilities, expected volume, inventory, supply and demand levels, balance, and trends, access to capital markets, liquidity and capital resources, including our ability to consistently generate robust cash flow and raise or repay debt, and prospects, plans, and objectives of management;

◦the dynamic and evolving consumer environment and trends, ongoing economic uncertainty and other socioeconomic factors, including subdued spend, depressed sentiment, value-seeking behaviors, higher prices and reductions in discretionary income, including from increased fuel prices, elevated unemployment, inflation, rising costs, other unfavorable global and regional economic conditions, demographic trends in the U.S., global supply chain disruptions and constraints, geopolitical events and tensions, wars, and military conflicts, including the conflict in the Middle East, and our responses thereto;

◦developments in international trade relations, including changes to trade and tariff policies and regulations, including our expectations related to aluminum and other tariffs and related actions, and alterations of the global trade environment;

◦expected or potential actions of third parties, including possible changes to laws, rules, and regulations;

◦the potential impact of severe weather events or other weather conditions;

◦the manner, timing, and duration of the share repurchase program and source of funds for share repurchases; and

◦the amount and timing of future dividends.

•The statements regarding the future reclassification of net gains from AOCI, potential continued impacts from the OB3 Act on our effective tax rate and potential impacts from Pillar Two, and our aim to hedge 100% of our balance sheet exposures.

When used in this Form 10-Q, the words “anticipate,” “expect,” “intend,” “will,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. All forward-looking statements speak only as of the date of this Form 10-Q. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. In addition to the risks and uncertainties of ordinary business operations and conditions in the general economy and markets in which we compete, our forward-looking statements contained in this Form 10-Q are also subject to the risk, uncertainty, and possible variance from our current expectations regarding:

•potential declines in the consumption of products we sell and our dependence on sales of our beer brands;

•our President and Chief Executive Officer transition;

•impacts of our acquisition, divestiture, investment, and new product development strategies and activities, including from the SpikedAde acquisition and the amount of contingent consideration, if any, that may be paid;

•dependence upon our trademarks and proprietary rights, including the failure to protect our intellectual property rights;

•potential damage to our reputation;

•competition in our industry and for talent;

•economic and other uncertainties associated with our international operations, including tariffs;

•supply of quality water, agricultural and other raw materials, certain raw and packaging materials purchased under supply contracts, supply chain disruptions and other factors, and limited groups of certain suppliers;

•reliance on complex information systems and third‐party global networks as well as risks associated with cybersecurity and artificial intelligence;


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•dependence on limited facilities for production of our beer brands and impacts from our Brewery Projects;

•operational disruptions or catastrophic loss to our breweries, wineries, other facilities, or distribution systems;

•severe weather, natural and man-made disasters, climate change, environmental sustainability and CSR-related regulatory compliance, and failure to meet environmental sustainability and CSR commitments and aspirations;

•the success of our cost savings, restructuring, and efficiency initiatives;

•reliance on wholesale distributors, major retailers, and government agencies;

•food safety and quality, including contamination and product degradation from diseases, pests, weather, and other conditions;

•communicable infection or disease outbreaks, pandemics, or other widespread public health crises impacting our consumers, Customers, employees, and/or suppliers;

•effects of employee labor activities that could increase our costs;

•our indebtedness and credit ratings, interest rate fluctuations, and credit market disruptions or volatility;

•our international operations, worldwide and regional economic trends and financial market conditions, geopolitical uncertainty, including as a result of the conflict in the Middle East, or other governmental rules and regulations;

•class action or other litigation we face or may face, including relating to alleged securities law violations, abuse or misuse of our products, product liability, marketing or sales practices, or other matters;

•potential impairments of our intangible assets, such as goodwill and trademarks;

•changes to tax laws, fluctuations in our effective tax rate, accounting for tax positions, including our expected release of a portion of our valuation allowance related to deferred tax assets and the associated income tax benefit, resolution of tax disputes, changes to accounting standards, elections, assertions, or policies, and the potential impact of a global minimum tax rate;

•uncertainties related to future cash dividends and share repurchases, which may affect the price of our common stock;

•ownership of our Class A Stock by certain individuals and entities affiliated with the Sands family and their Board of Director nomination rights; and

•the choice-of-forum provision in our amended and restated by-laws regarding certain stockholder litigation.

For additional information about risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by our forward-looking statements contained in the Form 10-Q, please refer to Item 1A. “Risk Factors” of our 2026 Annual Report.


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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a result of our global operating, investment, acquisition, divestiture, and financing activities, we are exposed to market risk associated with changes in foreign currency exchange rates, commodity prices, and interest rates. These risks may be influenced by, among other factors, trade policies, tariffs, and foreign or domestic legal and regulatory requirements. To manage the volatility relating to these risks, we periodically purchase and/or sell derivative instruments including foreign currency forward and option contracts, commodity swap contracts, cross-currency swap contracts, interest rate swap contracts, and Pre-issuance hedge contracts. We use derivative instruments to reduce earnings and cash flow volatility resulting from shifts in market rates, as well as to hedge economic exposures. We do not enter into derivative instruments for trading or speculative purposes.

Foreign currency and commodity price risk

Foreign currency derivative instruments are or may be used to hedge existing foreign currency denominated assets and liabilities, forecasted foreign currency denominated sales/purchases to/from third parties as well as intercompany sales/purchases, intercompany principal and interest payments, and in connection with investments, acquisitions, or divestitures outside the U.S. As of August 31, 2026, we had exposures to foreign currency risk primarily related to the Mexican peso, Canadian dollar, New Zealand dollar, and euro. We aim to hedge 100% of our balance sheet exposures. As of August 31, 2026, 89% of our forecasted transactional exposures for the remaining six months of Fiscal 2027 were hedged.

Commodity derivative instruments are or may be used to hedge forecasted commodity purchases from third parties as either economic hedges or accounting hedges. As of August 31, 2026, exposures to commodity price risk which we are currently hedging include aluminum, corn, diesel fuel, and natural gas prices. Approximately 90% of our forecasted transactional exposures for the remaining six months of Fiscal 2027 were hedged as of August 31, 2026.

We have performed a sensitivity analysis to estimate our exposure to market risk of foreign exchange rates and commodity prices reflecting the impact of a hypothetical 10% adverse change in the applicable market. The volatility of the applicable rates and prices is dependent on many factors which cannot be forecasted with reliable accuracy. Gains or losses from the revaluation or settlement of the related underlying positions would substantially offset such gains or losses on the derivative instruments. The aggregate notional value, estimated fair value, and sensitivity analysis for our open foreign currency and commodity derivative instruments are summarized as follows:


	Aggregate Notional Value				Fair Value, Net Asset (Liability)				Increase (Decrease) in Fair Value – Hypothetical 10% Adverse Change
	August 31, 2026		August 31, 2025		August 31, 2026		August 31, 2025		August 31, 2026		August 31, 2025
(in millions)
Foreign currency contracts	$	3,184.7	$	3,263.8	$	341.7	$	216.6	$	(219.0)	$	(192.2)
Commodity derivative contracts	$	358.9	$	327.1	$	50.6	$	(1.2)	$	(36.5)	$	29.1
Net investment hedge contracts	$	145.5	$	145.5	$	(4.8)	$	(5.6)	$	14.2	$	14.3

Interest rate risk

The estimated fair value of our fixed interest rate debt is subject to interest rate risk, credit risk, and foreign currency risk. In addition, we also have variable interest rate debt outstanding (primarily SOFR-based), certain of which includes a fixed margin subject to the same risks identified for our fixed interest rate debt.

There were no cash flow designated or undesignated interest rate swap contracts or Pre-issuance hedge contracts outstanding as of August 31, 2026, or August 31, 2025.


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We have performed a sensitivity analysis to estimate our exposure to market risk of interest rates reflecting the impact of a hypothetical 1% increase in the prevailing interest rates. The volatility of the applicable rates is dependent on many factors which cannot be forecasted with reliable accuracy.

The aggregate notional value, estimated fair value, and sensitivity analysis for our outstanding fixed-rate debt, including current maturities, are summarized as follows:


	Aggregate Notional Value				Fair Value, Net Asset (Liability)				Increase (Decrease) in Fair Value – Hypothetical 1% Rate Increase
	August 31, 2026		August 31, 2025		August 31, 2026		August 31, 2025		August 31, 2026		August 31, 2025
(in millions)
Fixed interest rate debt	$	10,261.6	$	10,357.3	$	(9,444.9)	$	(9,677.9)	$	(483.3)	$	(510.1)

A 1% hypothetical change in the prevailing interest rates would have increased interest expense on our variable interest rate debt by $1.1 million and $2.0 million for the six months ended August 31, 2026, and August 31, 2025, respectively.

For additional discussion on our market risk, refer to Notes 4 and 5.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure controls and procedures

Our Chief Executive Officer and our Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this report, that the Company’s “disclosure controls and procedures” (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) are effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal control over financial reporting

In connection with the foregoing evaluation by our Chief Executive Officer and our Chief Financial Officer, no changes were identified in the Company’s “internal control over financial reporting” (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during our fiscal quarter ended August 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

On February 18, 2025, a purported stockholder of the Company, Macaria Meza, filed a putative class action in the United States District Court for the Western District of New York originally captioned Meza v. Constellation Brands, Inc., et al., Case No. 6:25-cv-6107 (W.D.N.Y.). The complaint names as defendants the Company, our former President and Chief Executive Officer, and our Executive Vice President and Chief Financial Officer, and asserts claims for alleged violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder arising from allegedly materially false or misleading statements or omissions of purportedly material fact concerning, among other things, the Company’s strategies intended to improve the performance of our wine and spirits business. On May 28, 2025, a different purported stockholder of the Company, Low Lilly, was appointed as the lead plaintiff. On July 17, 2025, Low and additional named plaintiff, Meza, filed an amended complaint. The amended complaint asserts the same causes of action against the same defendants, but alleges materially false or misleading statements or omissions of purportedly material fact concerning, among other things, the prospects of our beer business. The amended complaint does not allege misstatements or omissions regarding our wine and spirits business. The amended complaint seeks, among other relief, alleged damages in an unspecified amount, attorneys’ fees, and costs. On September 17, 2025, the Company and the other defendants filed a motion to dismiss the amended complaint. Oral argument on that motion was held on July 22, 2026, and the motion to dismiss remains pending. On July 31, 2026, the parties stipulated to Meza’s request to withdraw as an additional named plaintiff and to amend the case caption to Low v. Constellation Brands, Inc., et al., Case No. 6:25-cv-6107 (W.D.N.Y.).

On March 24, 2025, a purported stockholder of the Company filed a complaint in the United States District Court for the Western District of New York captioned Silva v. Newlands, et al., Case No. 1:25-cv-254 (W.D.N.Y.); on April 21, 2025, a second purported stockholder of the Company filed a complaint in the United States District Court for the Western District of New York captioned Mason v. Newlands, et al., Case No. 1:25-cv-00353 (W.D.N.Y.); and on June 24, 2025, a third purported stockholder of the Company filed a complaint in the United States District Court for the District of Delaware captioned Wasserman v. Baldwin, et al., Case No. 1:25-cv-779 (D. Del.). These derivative complaints each seek to assert claims arising under the Exchange Act and state common law, derivatively on behalf of the Company, against current and former directors and officers of the Company. None of the plaintiffs made a pre-suit demand on our Board of Directors, instead each alleging that the pre-suit demand requirement should be excused as purportedly futile. The claims asserted in these derivative complaints arise from substantially the same allegations made in the first complaint filed in the action recaptioned Low. On May 27, 2025, the United States District Court for the Western District of New York entered an order consolidating the Silva and Mason litigations and staying proceedings pending the entry of a final judgment in Low. On August 8, 2025, the plaintiff in the Wasserman litigation filed a notice and proposed order voluntarily dismissing that litigation, which was so ordered by the United States District Court for the District of Delaware on August 14, 2025.


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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Issuer Purchases of Equity Securities


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
(in millions, except share and per share data)
June 1 – 30, 2026	714,387	$	139.98	714,387	$	2,752.1
July 1 – 31, 2026	808,509	$	132.31	808,509	$	2,645.1
August 1 – 31, 2026	181,475	$	131.96	181,475	$	2,621.2
Total	1,704,371	$	135.49	1,704,371

(1)In April 2025, we announced that our Board of Directors authorized the repurchase of up to $4.0 billion of our publicly traded common stock under the 2025 Authorization. The 2025 Authorization expires on February 29, 2028. Share repurchases for the periods included herein were effected through open market transactions and exclude the impact of Federal excise tax owed pursuant to the IRA.

Subsequent to August 31, 2026, we repurchased 607,371 shares of Class A Stock pursuant to the 2025 Authorization at an average cost of $123.48 per share through open market transactions made pursuant to a Rule 10b5-1 trading plan.

ITEM 5. OTHER INFORMATION.

10b5-1 Trading Plans

During the three months ended August 31, 2026, none of our directors or officers (as defined in Exchange Act Rule 16a-1(f)) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

ITEM 6. EXHIBITS.

INCORPORATED BY REFERENCE

EXHIBIT NO.

EXHIBIT DESCRIPTION

FORM

EXHIBIT

FILING DATE

3.1

Amended and Restated Certificate of Incorporation of the Company.

8-K

3.1

November 10, 2022

3.2

Amended and Restated By-Laws of the Company.

8-K

3.1

October 2, 2025

4.1

Indenture, dated as of April 17, 2012, by and among the Company, as Issuer, certain subsidiaries, as Guarantors, and M&T, as Trustee.

8-K

4.1

April 23, 2012

4.1.1

Supplemental Indenture No. 10, dated as of January 15, 2016, among the Company, Home Brew Mart, Inc., and M&T, as Trustee.

10-K

4.26

April 25, 2016


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INCORPORATED BY REFERENCE

EXHIBIT NO.

EXHIBIT DESCRIPTION

FORM

EXHIBIT

FILING DATE

4.1.2

Supplemental Indenture No. 13 with respect to 3.500% Senior Notes due 2027, dated as of May 9, 2017, among the Company, as Issuer, certain subsidiaries, as Guarantors, and M&T, as Trustee.

8-K

4.2

May 9, 2017

4.1.3

Supplemental Indenture No. 14 with respect to 4.500% Senior Notes due 2047, dated as of May 9, 2017, among the Company, as Issuer, certain subsidiaries, as Guarantors, and M&T, as Trustee.

8-K

4.3

May 9, 2017

4.1.4

Supplemental Indenture No. 19 with respect to 3.600% Senior Notes due 2028, dated as of February 7, 2018, among the Company, as Issuer, certain subsidiaries, as Guarantors, and M&T, as Trustee.

8-K

4.2

February 7, 2018

4.1.5

Supplemental Indenture No. 20 with respect to 4.100% Senior Notes due 2048, dated as of February 7, 2018, among the Company, as Issuer, certain subsidiaries, as Guarantors, and M&T, as Trustee.

8-K

4.3

February 7, 2018

4.1.6

Supplemental Indenture No. 23 with respect to 4.650% Senior Notes due 2028, dated as of October 29, 2018, among the Company, as Issuer, certain subsidiaries, as Guarantors, and M&T, as Trustee.

8-K

4.3

October 29, 2018

4.1.7

Supplemental Indenture No. 24 with respect to 5.250% Senior Notes due 2048, dated as of October 29, 2018, among the Company, as Issuer, certain subsidiaries, as Guarantors, and M&T, as Trustee.

8-K

4.4

October 29, 2018

4.1.8

Supplemental Indenture No. 25 with respect to 3.150% Senior Notes due 2029, dated as of July 29, 2019, among the Company, as Issuer, certain subsidiaries, as Guarantors, and M&T, as Trustee.

8-K

4.1

July 29, 2019

4.1.9

Supplemental Indenture No. 26 with respect to 2.875% Senior Notes due 2030, dated as of April 27, 2020, among the Company, as Issuer, and M&T, as Trustee.

8-K

4.1

April 27, 2020

4.1.10

Supplemental Indenture No. 27 with respect to 3.750% Senior Notes due 2050, dated as of April 27, 2020, among the Company, as Issuer, and M&T, as Trustee.

8-K

4.2

April 27, 2020

4.1.11

Supplemental Indenture No. 28 with respect to 2.250% Senior Notes due 2031, dated as of July 26, 2021, among the Company, as Issuer, and M&T, as Trustee.

8-K

4.1

July 26, 2021

4.1.12

Supplemental Indenture No. 31 with respect to 4.750% Senior Notes due 2032, dated as of May 9, 2022, among the Company, as Issuer, and M&T, as Trustee.

8-K

4.3

May 9, 2022

4.1.13

Supplemental Indenture No. 33 with respect to 4.900% Senior Notes due 2033, dated as of May 1, 2023, among the Company, as Issuer, and M&T, as Trustee.

8-K

4.1

May 1, 2023

4.1.14

Supplemental Indenture No. 34 with respect to 4.800% Senior Notes due 2029, dated as of January 11, 2024, among the Company, as Issuer, and M&T, as Trustee.

8-K

4.1

January 11, 2024

4.1.15

Supplemental Indenture No. 35 with respect to 4.800% Senior Notes due 2030, dated as of May 1, 2025, among the Company, as Issuer, and M&T, as Trustee.

8-K

4.1

May 1, 2025


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INCORPORATED BY REFERENCE

EXHIBIT NO.

EXHIBIT DESCRIPTION

FORM

EXHIBIT

FILING DATE

4.1.16

Supplemental Indenture No. 36 with respect to 4.950% Senior Notes due 2035, dated as of October 17, 2025, among the Company, as Issuer, and M&T, as Trustee.

8-K

4.1

October 17, 2025

4.1.17

Supplemental Indenture No. 37 with respect to 4.850% Senior Notes due 2031, dated as of May 6, 2026, among the Company, as Issuer, and M&T, as Trustee.

8-K

4.1

May 6, 2026

4.2

Restatement Agreement, dated as of April 28, 2025, by and among the Company, CB International, Bank of America, N.A., as Administrative Agent, and the Lenders party thereto, including the Eleventh Amended and Restated Credit Agreement dated as of April 28, 2025, by and among the Company, CB International, Bank of America, N.A., as Administrative Agent, and the Lenders party thereto. †

8-K

4.1

April 28, 2025

4.3

Term Loan Credit Agreement, dated as of Septem ber 18 , 202 6 , by and among the Company, M&T , as Administrative Agent, and the Lenders party thereto. †

8-K

4.1

September 18, 2026

10.1

The Company ’s Long-Term Stock Incentive Pl a n , amended and restated as of July 22, 2026 . *

8-K

10.2

July 24, 2026

10.2

Form of Restricted Stock Unit Agreement for Directors with respect to the Company’s Long-Term Stock Incentive Plan (awards on or after July 22, 2026). *

8-K

10.1

July 24, 2026

10.3

Form of Restricted Stock Unit Agreement with respect to the Company’s Long-Term Stock Incentive Plan (awards on or after July 2 2 , 202 6 ) (filed herewith). *

10.4

Form of Performance Share Unit Agreement with respect to the Company’s Long-Term Stock Incentive Plan (awards on or after July 22, 2026 ) (filed herewith). *†

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act (filed herewith).

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act (filed herewith).

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 (furnished herewith).

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (furnished herewith).

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (filed herewith).

101.SCH

XBRL Taxonomy Extension Schema Document (filed herewith).

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).


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INCORPORATED BY REFERENCE

EXHIBIT NO.

EXHIBIT DESCRIPTION

FORM

EXHIBIT

FILING DATE

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document (filed herewith).

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).



*			Designates management contract or compensatory plan or arrangement.
†			The exhibits, disclosure schedules, and other schedules, as applicable, have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of such exhibits, disclosure schedules, and other schedules, as applicable, or any section thereof, to the SEC upon request.

The Company agrees, upon request of the SEC, to furnish copies of each instrument that defines the rights of holders of long-term debt of the Company or its subsidiaries that is not filed herewith pursuant to Item 601(b)(4)(iii)(A) because the total amount of long-term debt authorized under such instrument does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis.


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Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		CONSTELLATION BRANDS, INC.

Date:	October 7, 2026	By:	/s/ Kenneth W. Metz
			Kenneth W. Metz, Senior Vice President, Controller and Corporate Finance

Date:	October 7, 2026	By:	/s/ Garth Hankinson
			Garth Hankinson, Executive Vice President and Chief Financial Officer (principal financial officer and principal accounting officer)