Warren Buffett Remains Intrigued by Consumer Stocks in 2025

Berkshire Hathaway (NYSE:BRK.B) made 17 moves in the final quarter of 2024, none of them would be considered earth-shattering decisions.

Nonetheless, Warren Buffett continues to tread carefully when investing in the markets. This is a clear sign that things have gotten overheated at precisely the same time and that the future is very unclear due to the Trump administration’s tariff strategy. 

If this were a poker game, businesses of all sizes would have folded already. Uncertainty is never good for the markets or businesses in general. Until President Trump fully implements his economic plan, it’s hard for investors to know how to play their cards. 

In the fourth quarter, the holding company’s experiment with Ulta Beauty (NASDAQ:ULTA) mercifully ended, with Berkshire selling its remaining 24,203 shares in the specialty retailer to hold none. 

Berkshire first bought ULTA stock in 2024’s second quarter, scooping up 690,106 shares at an average price of $437.94. It sold most of them in the third quarter. It’s hard to know why it didn’t close out the entire position. Well, that’s a moot point now that it has. 

Four of the 17 moves made in the fourth quarter were either consumer discretionary or consumer staples stocks. Despite the Ulta closeout, Berkshire’s other three moves were surprisingly bullish. 

Investors should consider Constellation Brands (NYSE:STZ), one of three consumer stocks.  

Key Points About This Article:

• Warren Buffett’s Berkshire Hathaway (NYSE:BRK.B) closed out its failed experiment in Ulta Beauty (NASDAQ:ULTA) after only three quarters.
• Although it only added one position in the fourth quarter of 2024, it was a billion-dollar move: investing in Constellation Brands (NYSE:STZ), one of the many liquor stocks that have struggled in recent years.  
• Although it’s unlikely that Berkshire would acquire Constellation, stranger things have happened in consumer stocks.
• Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “2 Legendary High-Yield Dividend Stocks” now.

Did Berkshire Just Lay an Egg?

Constellation Brands, the maker of Corona beer, Robert Mondavi and Kim Crawford wines, Casa Noble tequila, and High West Whiskey, was the only stock bought in Q4 2024. 

Buffett or one of his two investment managers, Todd Combs and Ted Weschler purchased 5.62 million shares of the consumer staples stock in the final quarter of 2024. The stock’s average price was $240.89, considerably less than its current trading price. 

As a result of the purchase, Constellation Brands is now the 19th largest holding in Berkshire Hathaway’s $298 billion equity portfolio, accounting for 0.47%. Berkshire owns 3.10% of STZ, making it the fourth-largest shareholder behind the Sands family (11.8%), Vanguard (7.3%), and BlackRock (5.9%).  

Constellation reported Q3 2025 results on Jan. 10. They were anything but impressive. On the bottom line, its adjusted EPS was $3.25, six cents lower than Wall Street’s estimate, while the top-line revenue was $2.46 billion, $70 million shy of the consensus. 

Worse still, it revised its guidance lower for the second time in fiscal 2025. It now expects adjusted EPS of $13.60 in 2025. However, it did raise its operating cash flow in 2025 from the previous guidance of $2.9 billion at the midpoint to $3.0 billion. It now expects a free cash flow of $1.7 billion in 2025. 

Constellation Brands’ primary growth driver remains its beer business. Modelo Especial saw its depletions increase by 3% in Q3 2025 while continuing to gain market share. The beer business should see revenue growth between 4% and 7% in 2025, with operating income up 9-12%. 

While the wine and spirits business continues to lose sales, Constellation’s move to focus on higher-priced spirits is paying dividends. In the third quarter, its spirits portfolio generated 9% depletion growth. If Constellation could fix its wine business, it would possess an excellent growth trifecta. 

Its shares are down 22% since it announced its Q3 2025 earnings on Jan. 10. 

Could Buffett Be Interested in an Acquisition?

While it’s unlikely that Buffett is looking for a $31 billion liquor acquisition, it would certainly be able to pick it up for a nice price. Further, the Sands family (brothers Rob and Richard remain on the board) could keep an eye on the business for him by maintaining an equity position in a Berkshire-controlled entity. 

The liquor business is suffering some significant headwinds. 

First, it’s taken over two years to recover from over-ordering by wholesalers during the COVID-19 pandemic. That’s cut into everyone’s historical sales growth. In the past decade, Constellation’s annual growth has exceeded 5% on six occasions. In the 12 months ended Nov. 30, 2024, it was 3.7%. Over the next four years, its compound annual growth rate for sales is projected to be 6.1%, closer to its historical norm. 

Further, since launching a dividend program in May 2015, Buffett has grown its dividend by nearly 42% compounded annually for ten consecutive years. Buffett loves dividends. Its current stake will pay over $20 million annually.

Constellation stock hasn’t been this cheap regarding enterprise value-to-sales and enterprise value-to-EBITDA since 2014. We’ll see in mid-April if Berkshire bought more in Q1 2025. 

It’s a better bet than Ulta, that’s for sure.

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