Constellation Brands Eyes Recovery as Berkshire Hathaway Takes Contrarian Stake

Constellation Brands (NYSE: STZ) is repositioning its business strategy to focus on its dominant beer brands, a move that has attracted the attention of Warren Buffett’s Berkshire Hathaway. The company is navigating a challenging environment where health-conscious trends are impacting alcohol consumption across multiple demographics, particularly among younger consumers. To streamline operations, the company has divested several wine and spirits brands, including Svedka. While these moves led to a 51% plunge in net sales for the wine and spirits segment in fiscal 2026, the company is doubling down on its Mexican beer portfolio, featuring top-selling brands like Modelo, Pacifico, and Corona. For the fiscal year ending February 28, 2026, Constellation reported net income of approximately $1.7 billion, a significant recovery from the $81 million loss recorded in the previous year. This turnaround was aided by the expiration of a $2.8 billion impairment charge from fiscal 2025. Despite a 10% overall drop in sales, Modelo has maintained its position as the market leader. The company remains committed to returning capital to investors, completing a $924 million share repurchase program and increasing its annual dividend to $4.12 per share, representing a 2.5% yield. This dividend has seen consistent annual growth since 2015. Under the leadership of new CEO Nicholas Fink, who assumed the role on April 13, Constellation expects flat sales growth for fiscal 2027. With a P/E ratio of 17—significantly lower than the S&P 500 average of 29—the stock is positioned as a value play for contrarian investors seeking durable demand in the beverage sector.