STZ Swings to Profit on Absence of Impairment, Strategic Divestitures

TL;DR

**STZ is back in the black, ditching dead weight to focus on premium brands and boost shareholder value.**

AI Summary

Constellation Brands, Inc. reported a significant turnaround in the second quarter of fiscal year 2026, with net income attributable to CBI reaching $466.0 million for the three months ended August 31, 2025, a stark contrast to the net loss of $1,199.0 million in the prior-year period. This improvement was primarily driven by the absence of a $2,250.0 million goodwill impairment charge recorded in the second quarter of fiscal 2025. Net sales for the quarter decreased to $2,481.0 million from $2,918.9 million, largely due to the 2025 Wine Divestitures and SVEDKA Divestiture. For the six months ended August 31, 2025, net income attributable to CBI was $982.1 million, compared to a net loss of $322.0 million in the same period last year. The company also initiated a 2025 Restructuring Initiative to optimize performance, with net annualized cost savings expected by Fiscal 2028. Cash and cash equivalents increased to $72.0 million from $68.1 million at February 28, 2025, while total current liabilities decreased substantially from $4,035.2 million to $2,659.4 million, reflecting significant debt repayments. The company repurchased $604.0 million of treasury stock during the six months ended August 31, 2025.

Why It Matters

This filing signals a strong financial recovery for Constellation Brands, primarily by shedding underperforming assets like mainstream wine brands and the SVEDKA brand, which contributed to a massive goodwill impairment last year. For investors, the swing to profitability and reduced current liabilities indicate improved financial health and a more focused business model on premium segments. Employees might see shifts in roles due to the 2025 Restructuring Initiative, while customers will experience a more curated product offering. Competitively, this strategic streamlining allows STZ to better compete in higher-margin beverage alcohol categories, potentially increasing market share in those segments.

Risk Assessment

Risk Level: medium — While the company swung to a profit, net sales decreased by $437.9 million for the three months ended August 31, 2025, compared to the prior year, primarily due to the 2025 Wine Divestitures and SVEDKA Divestiture. This indicates a smaller revenue base, which could be a risk if the premium segments do not grow as expected. Additionally, the 2025 Restructuring Initiative, while aiming for cost savings by Fiscal 2028, introduces execution risk.

Analyst Insight

Investors should consider STZ a 'hold' or 'buy' given the significant improvement in net income and strategic focus on higher-margin products. Monitor the progress of the 2025 Restructuring Initiative and the performance of their premium beverage alcohol portfolio to ensure sustained growth and profitability.

Financial Highlights

debt To Equity

1.76

revenue

$4,996.0M

operating Margin

31.9%

total Assets

$21,419.4M

total Debt

$10,040.8M

net Income

$982.1M

eps

$5.55

gross Margin

51.6%

cash Position

$72.0M

revenue Growth

-10.5%

Revenue Breakdown

Key Numbers

• $466.0M — Net Income Attributable to CBI (Q2 FY26) (Significant turnaround from a $1,199.0M loss in Q2 FY25)
• $2,250.0M — Goodwill Impairment (Q2 FY25) (Absence of this charge was a primary driver for current period profitability)
• $2,481.0M — Net Sales (Q2 FY26) (Decreased from $2,918.9M in Q2 FY25 due to divestitures)
• $982.1M — Net Income Attributable to CBI (Six Months FY26) (Improved from a $322.0M loss in the prior six-month period)
• $2,659.4M — Total Current Liabilities (August 31, 2025) (Reduced from $4,035.2M at February 28, 2025, indicating improved liquidity)
• $604.0M — Treasury Stock Purchases (Six Months FY26) (Reflects ongoing capital return to shareholders)
• $72.0M — Cash and Cash Equivalents (August 31, 2025) (Slight increase from $68.1M at February 28, 2025)
• $851.1M — Proceeds from Sale of Business (Six Months FY26) (Generated from the 2025 Wine Divestitures)

Key Players & Entities

• CONSTELLATION BRANDS, INC. (company) — registrant
• $466.0 million (dollar_amount) — Net income attributable to CBI for Q2 FY26
• $1,199.0 million (dollar_amount) — Net loss attributable to CBI for Q2 FY25
• $2,250.0 million (dollar_amount) — Goodwill impairment charge in Q2 FY25
• $2,481.0 million (dollar_amount) — Net sales for Q2 FY26
• $2,918.9 million (dollar_amount) — Net sales for Q2 FY25
• 2025 Wine Divestitures (business_event) — Sale of mainstream wine brands
• SVEDKA Divestiture (business_event) — Sale of SVEDKA brand
• 2025 Restructuring Initiative (business_event) — Enterprise-wide cost savings and restructuring
• $604.0 million (dollar_amount) — Purchases of treasury stock for six months ended August 31, 2025

FAQ

Risk Factors

• Goodwill Impairment Risk [medium — financial]: The company recorded a significant goodwill impairment charge of $2,250.0 million in Q2 FY25. While absent in the current period, future impairments could arise if the carrying value of goodwill exceeds its fair value, impacting profitability.
• Restructuring Initiative Execution [medium — operational]: The company initiated a 2025 Restructuring Initiative to optimize performance, expecting net annualized cost savings by Fiscal 2028. Successful execution is critical to achieving these savings and improving operational efficiency.
• Divestiture Impact on Sales [medium — market]: Net sales decreased to $2,481.0 million in Q2 FY26 from $2,918.9 million in Q2 FY25 due to significant divestitures, including wine and SVEDKA brands. Future revenue growth will depend on the performance of remaining segments.
• Debt Management [medium — financial]: Total current liabilities decreased substantially from $4,035.2 million to $2,659.4 million, reflecting significant debt repayments. However, long-term debt remains substantial at $9,788.3 million as of August 31, 2025.
• Compliance with OB3 Act [low — regulatory]: The OB3 Act (One Big Beautiful Bill Act) was signed into U.S. law on July 4, 2025. The company must ensure compliance with any new regulations or requirements stemming from this legislation.

Industry Context

Constellation Brands operates in the highly competitive beverage alcohol industry, facing established players and emerging brands. Trends include a growing demand for premium products, craft beverages, and a shift towards healthier or lower-alcohol options. The company's strategic divestitures in wine and spirits aim to sharpen focus on its core, high-performing beer segment.

Regulatory Implications

The recent signing of the OB3 Act (July 4, 2025) introduces potential new regulatory considerations for the beverage alcohol industry. Companies like Constellation Brands will need to monitor and adapt to any new compliance requirements or market access changes stemming from this legislation.

What Investors Should Do

1. Monitor the impact of ongoing restructuring initiatives on cost savings and operational efficiency.
2. Analyze the performance of the core beer segment post-divestitures.
3. Evaluate the company's debt management strategy and leverage levels.
4. Assess the impact of the OB3 Act on the company's operations and market.

Key Dates

• 2025-08-31: End of Second Quarter Fiscal Year 2026 — Reported significant net income turnaround and reduction in current liabilities.
• 2025-02-28: End of Fiscal Year 2025 — Previous period balance sheet figures for comparison.
• 2024-08-31: End of Second Quarter Fiscal Year 2025 — Period with significant goodwill impairment charge and net loss.
• 2025-07-04: OB3 Act Signed into Law — Potential new regulatory landscape for the industry.

Glossary

Goodwill impairment

A reduction in the carrying value of goodwill on the balance sheet when its fair value is less than its carrying amount. (A $2,250.0M charge in Q2 FY25 significantly impacted prior period results; its absence drove the current period's profitability.)

Net sales

Gross sales less returns, allowances, and excise taxes. (Key top-line metric, which decreased in Q2 FY26 due to divestitures.)

Divestiture

The sale or disposal of a business unit or asset. (The 2025 Wine Divestitures and SVEDKA Divestiture significantly impacted net sales.)

Treasury stock

Stock that a company has repurchased from the open market. (The company repurchased $604.0M of treasury stock in the first six months of FY26, indicating capital return to shareholders.)

Restructuring Initiative

A plan to reorganize a company's operations to improve efficiency and profitability. (Constellation Brands initiated a 2025 Restructuring Initiative to optimize performance.)

Noncontrolling interests

The portion of equity of a subsidiary that is not attributable to the parent company. (Represents minority ownership in consolidated subsidiaries, impacting net income and equity.)

Year-Over-Year Comparison

Compared to the prior year's second quarter, Constellation Brands has demonstrated a significant financial turnaround, moving from a net loss of $1,199.0 million to a net income of $466.0 million, largely due to the absence of a $2,250.0 million goodwill impairment charge. Net sales saw a decline from $2,918.9 million to $2,481.0 million, primarily driven by strategic divestitures. Total current liabilities have substantially decreased from $4,035.2 million to $2,659.4 million, indicating improved liquidity and debt reduction efforts.

Key Financial Figures

• $4.0 billion — ation authorization to repurchase up to $4.0 billion of our publicly traded common stock, ap
• $2.25 billion — of April 28, 2025, that provides for a $2.25 billion aggregate revolving credit facility 2
• $500.0 million — as of May 9, 2025, that provides for a $500.0 million unsecured delayed draw term loan facili
• $400.0 million — lers 4.75% December 2015 Senior Notes $400.0 million principal amount of 4.75% senior notes
• $0.01 — s 1 Convertible Common Stock, par value $0.01 per share Class A Stock our Class A C
• $11.00 — Mainstream wine that sells less than $11.00 per bottle at retail and sparkling wine
• $13.00 — and all other wine that sells less than $13.00 per bottle at retail MD&A Management'
• $24.99 — emium wine that sells between $11.00 to $24.99 per bottle at retail and sparkling wine
• $34.99 — kling wine that sells between $13.00 to $34.99 per bottle at retail SEC Securities a

Filing Documents

• stz-20250831.htm (10-Q) — 2234KB
• stzex103_831202510-q.htm (EX-10.3) — 5KB
• stzex311_831202510q.htm (EX-31.1) — 8KB
• stzex312_831202510q.htm (EX-31.2) — 8KB
• stzex321_831202510q.htm (EX-32.1) — 4KB
• stzex322_831202510q.htm (EX-32.2) — 4KB
• stz-20250831_g1.jpg (GRAPHIC) — 22KB
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• stz-20250831_g6.jpg (GRAPHIC) — 95KB
• 0000016918-25-000141.txt ( ) — 18708KB
• stz-20250831.xsd (EX-101.SCH) — 45KB
• stz-20250831_cal.xml (EX-101.CAL) — 109KB
• stz-20250831_def.xml (EX-101.DEF) — 389KB
• stz-20250831_lab.xml (EX-101.LAB) — 682KB
• stz-20250831_pre.xml (EX-101.PRE) — 553KB
• stz-20250831_htm.xml (XML) — 2096KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

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

Notes to Consolidated Financial Statements 1. Basis of Presentation 7 2. Acquisitions and Divestitures 7 3. Restructuring 8 4. Inventories 9 5. Prepaid Expenses and Other 9 6. Derivative Instruments 9 7. Fair Value of Financial Instruments 12 8. Goodwill 15 9. Intangible Assets 16 10. Other Assets 16 11. Borrowings 17 12. Income Taxes 19 13. Stockholders' Equity 20 14. Net Income (Loss) Per Common Share Attributable to CBI 22 15. Comprehensive Income (Loss) Attributable to CBI 22 16. Business Segment Information 25 17. Accounting Guidance Not Yet Adopted 29

Management's Discussion and Analysis of Financial Condition and Results of Operations 30

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 30

Quantitative and Qualitative Disclosures About Market Risk 52

Item 3. Quantitative and Qualitative Disclosures About Market Risk 52

Controls and Procedures 53

Item 4. Controls and Procedures 53

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings 54

Item 1. Legal Proceedings 54

Unregistered Sales of Equity Securities and Use of Proceeds 55

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 55

Other Information 55

Item 5. Other Information 55

Exhibits 55

Item 6. Exhibits 55 SIGNATURES 59 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, 2025. 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 Annual Report our Annual Report on Form 10-K for the fiscal year ended February 28, 2025 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 expected to be completed within Fiscal 2026 and net annualized cost savings expected to be

Financial Statements our consolidated financial statements and notes thereto included herein

Financial Statements our consolidated financial statements and notes thereto included herein Fiscal 2025 the Company's fiscal year ended February 28, 2025 Fiscal 2026 the Company's fiscal year ending 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 Form 10-Q this Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2025, 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 MD&A Management's Discussion and Analysis of Financial Condition and Results of Operations under Part I – Item 2. of this Form 10-Q Mexicali Brewery canceled brewery construction project located in Mexicali, Baja California, Mexico, sold the remaining assets classified as held for sale in July 2024 Mexico Beer Projects expansion, optimization, and/or construction activities at the Obregn Brewery, Nava Brewery, and Veracruz Brewery M&T Manufacturers and Traders Trust Company Nava Nava, Coahuila, Mexico Constellation Brands, Inc. Q2 FY 2026 Form 10-Q #WORTHREACHINGFOR I ii Table of Contents TERM MEANING Nava Brewery our brewery located in Nava Net sales gross sales less promotions, returns and allowances, and excise taxes 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 OB3 Act One Big Beautiful Bill Act, signed into U.S. law on July 4, 2025 Obregn Obregn, Sonora, Mexico Obregn Brewery our brewery located in Obregn OE

FINANCIAL STATEMENTS Table of Contents

FINANCIAL STATEMENTS Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS. CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in millions, except share and per share data) (unaudited) August 31, 2025 February 28, 2025 ASSETS Current assets: Cash and cash equivalents $ 72.0 $ 68.1 Accounts receivable 667.6 736.5 Inventories 1,439.7 1,437.2 Prepaid expenses and other 699.6 561.1 Assets held for sale — 913.5 Total current assets 2,878.9 3,716.4 Property, plant, and equipment, net of accumulated depreciation of $ 2,831.0 and $ 2,547.9 , respectively 8,002.2 7,409.8 Goodwill 5,179.3 5,126.8 Intangible assets 2,533.4 2,532.3 Deferred income taxes 1,588.4 1,805.3 Other assets 1,237.2 1,061.7 Total assets $ 21,419.4 $ 21,652.3 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 252.5 $ 806.7 Current maturities of long-term debt 504.1 1,402.0 Accounts payable 1,023.2 939.8 Other accrued expenses and liabilities 879.6 886.7 Total current liabilities 2,659.4 4,035.2 Long-term debt, less current maturities 9,788.3 9,289.0 Deferred income taxes and other liabilities 1,185.4 1,193.3 Total liabilities 13,633.1 14,517.5 Commitments and contingencies CBI stockholders' equity: Class A Stock, $ 0.01 par value – Authorized, 322,000,000 shares; Issued, 212,698,298 shares and 212,698,298 shares, respectively 2.1 2.1 Additional paid-in capital 2,150.5 2,144.6 Retained earnings 13,225.5 12,603.4 Accumulated other comprehensive income (loss) ( 92.3 ) ( 662.7 ) Class A Stock in treasury, at cost, 37,684,962 shares and 34,505,141 shares, respectively ( 7,785.4 ) ( 7,205.4 ) Total CBI stockholders' equity 7,500.4 6,882.0 Noncontrolling interests 285.9 252.8 Total stockholders' equity 7,786.3 7,134.8 Total liabilities and stockholders' equity $ 21,419.4 $ 21,652.3 The accompanying notes are an integral part of these statements. Constellation Brands, Inc. Q2 FY 2026 Form 10-Q #WORTHREACHINGFOR I 1

FINANCIAL STATEMENTS Table of Contents

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, 2025 2024 2025 2024 NET INCOME (LOSS) ATTRIBUTABLE TO CBI Sales $ 5,331.4 $ 5,999.8 $ 2,653.9 $ 3,139.1 Excise taxes ( 335.4 ) ( 419.1 ) ( 172.9 ) ( 220.2 ) Net sales 4,996.0 5,580.7 2,481.0 2,918.9 Cost of product sold ( 2,419.4 ) ( 2,665.1 ) ( 1,171.0 ) ( 1,407.1 ) Gross profit 2,576.6 2,915.6 1,310.0 1,511.8 Selling, general, and administrative expenses ( 936.7 ) ( 953.4 ) ( 436.0 ) ( 491.2 ) Goodwill impairment — ( 2,250.0 ) — ( 2,250.0 ) Asset impairment and related expenses ( 52.1 ) — — — Operating income (loss) 1,587.8 ( 287.8 ) 874.0 ( 1,229.4 ) Income (loss) from unconsolidated investments ( 7.0 ) 80.8 ( 3.5 ) ( 1.2 ) Interest expense, net ( 186.5 ) ( 206.8 ) ( 87.6 ) ( 104.0 ) Income (loss) before income taxes 1,394.3 ( 413.8 ) 782.9 ( 1,334.6 ) (Provision for) benefit from income taxes ( 384.4 ) 124.2 ( 296.8 ) 152.2 Net income (loss) 1,009.9 ( 289.6 ) 486.1 ( 1,182.4 ) Net (income) loss attributable to noncontrolling interests ( 27.8 ) ( 32.4 ) ( 20.1 ) ( 16.6 ) Net income (loss) attributable to CBI $ 982.1 $ ( 322.0 ) $ 466.0 $ ( 1,199.0 ) COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CBI Comprehensive income (loss) $ 1,603.1 $ ( 1,129.7 ) $ 715.0 $ ( 2,013.8 ) Comprehensive (income) loss attributable to noncontrolling interests ( 50.6 ) 3.9 ( 29.3 ) 20.0 Comprehensive income (loss) attributable to CBI $ 1,552.5 $ ( 1,125.8 ) $ 685.7 $ ( 1,993.8 ) CLASS A STOCK Net income (loss) per common share attributable to CBI – basic $ 5.55 $ ( 1.77 ) $ 2.65 $ ( 6.59 ) Net income (loss) per common share attributable to CBI – diluted $ 5.55 $ ( 1.77 ) $ 2.65 $ ( 6.59 ) Weighted average common shares outstanding – basic 176.804 182.356 175.821 181.947 Weighted average

FINANCIAL STATEMENTS Table of Contents

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 Constellation Brands, Inc. Q2 FY 2026 Form 10-Q #WORTHREACHINGFOR I 3

FINANCIAL STATEMENTS Table of Contents

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 29, 2024 $ 2.1 $ 2,047.3 $ 13,417.2 $ 376.8 $ ( 6,100.3 ) $ 321.5 $ 10,064.6 Comprehensive income (loss): Net income (loss) — — 877.0 — — 15.8 892.8 Other comprehensive income (loss), net of income tax effect — — — ( 9.0 ) — 0.3 ( 8.7 ) Comprehensive income (loss) 884.1 Repurchase of shares — — — — ( 200.0 ) — ( 200.0 ) Dividends declared — — ( 184.7 ) — — — ( 184.7 ) Noncontrolling interest distributions — — — — — ( 17.5 ) ( 17.5 ) Shares issued under equity compensation plans — 5.7 — — 2.4 — 8.1 Stock-based compensation — 17.3 — — — — 17.3 Balance at May 31, 2024 2.1 2,070.3 14,109.5 367.8 ( 6,297.9 ) 320.1 10,571.9 Comprehensive income (loss): Net income (loss) — — ( 1,199.0 ) — — 16.6 ( 1,182.4 ) Other comprehensive income (loss), net of income tax effect — — — ( 794.8 ) — ( 36.6 ) ( 831.4 ) Comprehensive income (loss) ( 2,013.8 ) Repurchase of shares — — — — ( 249.2 ) — ( 249.2 ) Dividends declared — — ( 183.3 ) — — — ( 183.3 ) Noncontrolling interest distributions — — — — — ( 15.0 ) ( 15.0 ) Shares issued under equity compensation plans — 21.2 — — 0.4 — 21.6 Stock-based compensation — 23.7 — — — — 23.7 Balance at August 31, 2024 $ 2.1 $ 2,115.2 $ 12,727.2 $ ( 427.0 ) $ ( 6,546.7 ) $ 285.1 $ 8,155.9 The accompanying notes are an integral part of these statements. Constellation Brands, Inc. Q2 FY 2026 Form 10-Q #WORTHREACHINGFOR I 4

FINANCIAL STATEMENTS Table of Contents

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, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 1,009.9 $ ( 289.6 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Deferred tax provision (benefit) 277.6 ( 178.5 ) Depreciation 207.9 220.8 Stock-based compensation 32.1 41.0 Noncash lease expense 62.6 57.7 Asset impairment and related expenses 52.1 — Net gain in connection with Exchangeable Shares — ( 83.3 ) Goodwill impairment — 2,250.0 Change in operating assets and liabilities, net of effects from purchase and sale of business: Accounts receivable 72.2 ( 40.6 ) Inventories ( 48.3 ) 14.7 Prepaid expenses and other current assets ( 56.8 ) ( 77.7 ) Accounts payable 53.0 134.5 Contract liabilities ( 50.4 ) 9.7 Other accrued expenses and liabilities ( 57.0 ) ( 55.4 ) Other ( 65.6 ) ( 131.0 ) Total adjustments 479.4 2,161.9 Net cash provided by (used in) operating activities 1,489.3 1,872.3 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant, and equipment ( 410.1 ) ( 703.1 ) Purchase of business, net of cash acquired — ( 158.3 ) Investments in equity method investees and securities ( 7.0 ) ( 19.0 ) Proceeds from sale of assets 30.8 32.8 Proceeds from sale of business 851.1 — Other investing activities — ( 10.0 ) Net cash provided by (used in) investing activities 464.8 ( 857.6 ) Constellation Brands, Inc. Q2 FY 2026 Form 10-Q #WORTHREACHINGFOR I 5

FINANCIAL STATEMENTS Table of Contents

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, 2025 2024 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of long-term debt 499.1 — Principal payments of long-term debt ( 902.1 ) ( 554.3 ) Net proceeds from (repayments of) short-term borrowings ( 554.2 ) 266.7 Dividends paid ( 361.1 ) ( 368.6 ) Purchases of treasury stock ( 604.0 ) ( 449.2 ) Proceeds from shares issued under equity compensation plans 3.1 48.4 Payments of minimum tax withholdings on stock-based payment awards ( 9.5 ) ( 13.8 ) Payments of debt issuance, debt extinguishment, and other financing costs ( 5.4 ) — Distributions to noncontrolling interests ( 17.5 ) ( 32.5 ) Payment of contingent consideration ( 1.5 ) ( 0.7 ) Net cash provided by (used in) financing activities ( 1,953.1 ) ( 1,104.0 ) Effect of exchange rate changes on cash and cash equivalents 2.9 1.5 Net increase (decrease) in cash and cash equivalents 3.9 ( 87.8 ) Cash and cash equivalents, beginning of period 68.1 152.4 Cash and cash equivalents, end of period $ 72.0 $ 64.6 SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES Additions to property, plant, and equipment $ 62.5 $ 114.7 The accompanying notes are an integral part of these statements. Constellation Brands, Inc. Q2 FY 2026 Form 10-Q #WORTHREACHINGFOR I 6

FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents

FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents CONSTELLATION BRANDS, INC. AND SUBSIDIARIES AUGUST 31, 2025 (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 2025 Annual Report. Results of operations for interim periods are not necessarily indicative of annual results. 2. ACQUISITIONS AND DIVESTITURES ACQUISITION Sea Smoke In June 2024, we acquired the Sea Smoke business, including a California-based luxury wine brand, vineyards, and a production facility for $ 158.7 million, net of closing and post-closing adjustments. This transaction also included the acquisition of goodwill, inventory, and a trademark. The results of operations of Sea Smoke are reported in the Wine and Spirits segment and have been included in our consolidated results of operations from the date of acquisition. DIVESTITURES 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 (see Note 11). Prior to the completion of the 2025 Wine Divestitures, we recorded the results of

FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents

FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents Assets held for sale Certain wine and spirits net assets met the held for sale criteria largely in connection with the 2025 Wine Divestitures. The carrying values of these assets held for sale consisted of the following: February 28, 2025 (in millions) ASSETS Inventories $ 788.7 Prepaid expenses and other 0.5 Property, plant, and equipment 474.4 Intangible assets 127.9 Less: Asset impairment ( 478.0 ) Assets held for sale 913.5 LIABILITIES Other accrued expenses and liabilities (1) 33.7 Net assets held for sale $ 879.8 (1) Liabilities held for sale are included in the consolidated balance sheets within other accrued expenses and liabilities. 3. 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 is expected to be completed within the year ending February 28, 2026, and is estimated to result in $ 80 million to $ 100 million of cumulative pre-tax costs once all phases are fully implemented. This range is estimated to be comprised of (i) employee termination costs ( 60 %) and (ii) consulting services as well as other costs, which primarily include contract termination costs ( 40 %). We recognized pre-tax restructuring costs in connection with the 2025 Restructuring Initiative as follows: Results of Operations Location For the Six Months Ended August 31, 2025 For the Three Months Ended August 31, 2025 (in millions) Consulting services Selling, general, and administrative expenses $ 21.5 $ 8.2 Other costs Selling, general, and administrative expenses 0.1 0.1 $ 21.6 $ 8.3 Since the inception of the 2025 Restructuring Initiative, we have incurred the followin

FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents

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, 2025 $ 46.9 $ 2.8 $ — $ 49.7 Restructuring costs — 21.5 0.1 21.6 Cash payments ( 28.8 ) ( 13.7 ) — ( 42.5 ) Balance at August 31, 2025 (1) $ 18.1 $ 10.6 $ 0.1 $ 28.8 (1) The total accrual was recorded in accrued restructuring within other accrued expenses and liabilities in our consolidated balance sheets. 4. 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, 2025 February 28, 2025 (in millions) Raw materials and supplies $ 216.2 $ 230.2 In-process inventories 499.4 540.9 Finished case goods 724.1 666.1 $ 1,439.7 $ 1,437.2 5. PREPAID EXPENSES AND OTHER The major components of prepaid expenses and other are as follows: August 31, 2025 February 28, 2025 (in millions) Value added taxes receivable $ 278.4 $ 241.3 Prepaid excise and sales taxes 157.1 150.4 Derivative assets 131.1 67.2 Prepaid advertising 30.5 16.6 Prepaid insurance 22.0 9.7 Other 80.5 75.9 $ 699.6 $ 561.1 6. DERIVATIVE INSTRUMENTS Overview

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