Lawsuit alleges Constellation misled shareholders
A lawsuit has been brought against Constellation Brands alleging the company misled investors about the growth potential of its wine and spirits portfolio.
The Schall Law Firm, a national shareholder rights litigation firm, put a call out to investors who bought shares between 11 April 2024 and 8 January 2025, and suffered losses.
In April 2024, the lawsuit details, Constellation Brands announced its 2024 full-year results along with full-year guidance for 2025.
CEO Bill Newlands stated: “We continue to see growth potential in our wine and spirits business as we focus on strong commercial and operational execution,” the legal document shows.
Shareholder Jeff Mason filed the lawsuit this month (April), claiming Constellation Brands “repeatedly touted the purported growth of its wine and spirits business. However, in reality, the company was struggling to deliver increased profitability, especially in its wine and spirits business, due to weaker consumer demand and continued retail inventory destocking in the US wholesale market.”
In January this year, Constellation Brands, whose portfolio includes High West whiskey, reported a 14% net sales decline for wine and spirits during the third quarter of its 2025 fiscal year.
The lawsuit further alleges that Constellation Brands spent more than US$668 million on stock buybacks at “artificially inflated prices”, causing the company to overpay for repurchases of its own stock by more than US$178.5m.
The Spirits Business has reached out to Constellation Brands for comments.
In April this year, Constellation Brands announced plans to offload some of its mainstream wine brands after its wine and spirits sales fell by 7% for the fiscal 2025 year.
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