Brown-Forman Reports Fiscal 2026 Results

LOUISVILLE, Ky.--(BUSINESS WIRE)--Brown-Forman Corporation (NYSE: BFA, BFB) reported financial results for its fourth quarter and fiscal year ended April 30, 2026. Fourth quarter reported net sales increased 2%¹ to $912 million (+2% on an organic basis²) compared to the same prior-year period. In the quarter, reported operating income decreased 53% to $96 million (flat on an organic basis) and diluted earnings per share decreased 62% to $0.12.

For the full year, the company’s reported net sales decreased 1% to $3.9 billion (flat on an organic basis) compared to the same prior-year period. Reported operating income decreased 10% to $1.0 billion (-2% on an organic basis) and diluted earnings per share decreased 17% to $1.53.

“We finished the fiscal year ahead of our expectations, driven by strong execution in our innovation portfolio, the early benefits of our U.S. route-to-market transformation, and strategic cost-restructuring initiatives,” said President and Chief Executive Officer Lawson Whiting. “Our ability to grow cash flows from operations and free cash flow by more than $400 million in a declining market speaks to the strength of our business and our commitment to a robust capital allocation strategy. While we expect continued market volatility and a challenging cost cycle in the year ahead, our performance this year proves we have the right people, brands, and strategy to navigate these challenges effectively.”

Fiscal 2026 Highlights

• The net sales decline was led by the end of the Korbel Champagne Cellars relationship (Korbel relationship) and the absence of the Sonoma-Cutrer prior-year transition services agreement (TSA), partially offset by the launch of Jack Daniel’s Tennessee Blackberry.
• From a geographic perspective, net sales growth in Emerging³ markets and the Travel Retail³ channel was partially offset by a decline in the United States, and Developed International³ markets were flat.
• Gross margin expanded 160 basis points driven by the positive effect of acquisitions and divestitures.
• Cash flows from operations grew by $402 million to $1.0 billion and free cash flow² increased by $462 million to $893 million.
• The company returned $827 million to stockholders by distributing $427 million in regular quarterly dividends and $400 million through its share repurchase program.

Fiscal 2026 Brand Results

• Net sales for Whiskey³ products increased 3% (+1% organic) driven by the launch of Jack Daniel’s Tennessee Blackberry, the positive effect of foreign exchange, and the growth of Woodford Reserve in the United States, partially offset by declines of Jack Daniel’s Tennessee Whiskey.
• Net sales for the Tequila³ portfolio decreased 4% (-6% organic). Herradura’s net sales declined 9% (-10% organic) led by lower volumes in the United States. el Jimador’s net sales decreased 2% (-2% organic) driven by declines in the United States and Mexico, partially offset by higher volumes in Colombia.
• Net sales for the Ready-to-Drink³ (RTD) portfolio increased 11% (+7% organic). Net sales of New Mix increased 41% (+33% organic) fueled by market share gains in Mexico within an accelerating category and the product’s launch in the United States. Jack Daniel’s RTD/RTP portfolio decreased 3% (-5% organic) driven by declines in the United States and the absence of American-made beverage alcohol from retail shelves across most provinces in Canada.
• Rest of Portfolio's³ net sales declined 31% (+18% organic) driven by the unfavorable impact of acquisitions and divestitures, partially offset by the distribution of new agency brands in Japan and Mexico, as well as strong double-digit growth of Gin Mare and Diplomático.
• Net sales for non-branded and bulk decreased 68% (-68% organic) driven by lower used barrel sales.

Fiscal 2026 Market Results

• Net sales in the United States declined 7% (flat organic) driven by the end of the Korbel relationship and the absence of the Sonoma-Cutrer prior-year TSA, as well as lower volumes of Jack Daniel’s Tennessee Whiskey and unfavorable portfolio mix, partially offset by innovation, led by Jack Daniel’s Tennessee Blackberry and growth of Woodford Reserve. Higher net pricing across the portfolio as a result of changes to our distributor relationship terms and favorable timing of distributor ordering patterns positively impacted net sales.
• In a challenging economic environment, net sales in the Developed International markets were flat (-3% organic). The positive effect of foreign exchange and the benefit from the transition to owned distribution in Italy was offset by the absence of American-made beverage alcohol from retail shelves in most of the Canadian provinces and declines in Germany and the United Kingdom.
• Net sales in Emerging markets increased 14% (+12% organic) driven by growth across the Jack Daniel’s family of brands led by Türkiye, the United Arab Emirates, and Brazil, strong double-digit growth of New Mix in Mexico, an estimated net increase in distributor inventories, and the positive effect of foreign exchange.
• The Travel Retail channel’s net sales increased 6% (+5% organic) largely due to increased passenger traffic leading to higher volumes of Jack Daniel’s Tennessee Whiskey as well as the positive effect of foreign exchange.

Fiscal 2026 Other P&L Items

• Gross profit increased 2% (flat organic). Gross margin expanded 160 basis points to 60.5% driven by the positive effect of acquisitions and divestitures, the positive effect of foreign exchange, and lower costs influenced by the timing of cost fluctuations.
• Advertising expense decreased 4% (-5% organic) driven by lower spend across the Jack Daniel’s family of brands, led by super-premium Jack Daniel’s expressions, and the end of the Korbel relationship, partially offset by the negative effect of foreign exchange.
• Selling, general, and administrative (SG&A) expenses increased 9% (+7% organic) driven by costs associated with the contemplated business transaction discussions, higher compensation-and-benefit-related expenses, and the negative effect of foreign exchange.
• The company incurred $19 million in charges related to the strategic restructuring initiative announced in January 2025.
• Operating income decreased 10% (-2% organic) resulting in an operating margin decrease of 240 basis points to 25.5%. The operating margin decrease was driven by higher non-cash impairment charges and higher SG&A expenses, partially offset by lower restructuring initiative costs compared to the same prior-year period.
• Diluted earnings per share decreased $0.31 driven by lower operating income and the absence of the prior-year gain on sale of our investment in The Duckhorn Portfolio, Inc.

Fiscal 2026 Financial Stewardship

During fiscal 2026, the company paid $427 million to stockholders through its regular quarterly dividend and returned $400 million to stockholders through its share repurchase program, which was completed in December 2025. Brown-Forman, a member of the S&P 500 Dividend Aristocrats Index, has paid regular quarterly cash dividends for 82 consecutive years and has increased the regular dividend for 42 consecutive years.

In addition, cash flows from operations grew $402 million to $1.0 billion, primarily reflecting disciplined working capital management, and free cash flow increased $462 million to $893 million, driven by strong operating cash flow generation and lower capital expenditure needs.

Fiscal 2027 Outlook

We anticipate the operating environment for fiscal 2027 to remain challenging, as macroeconomic pressures and geopolitical instability continue to negatively impact consumer behavior and beverage alcohol consumption, particularly within developed markets. We remain committed to building our business for the long term while focusing intensely on the variables within our control. We believe we will benefit in fiscal 2027 from our previously announced restructuring initiative and U.S. distributor changes, and continued new product innovation, such as the expansion of Jack Daniel's Tennessee Blackberry. Considering these factors, we expect the following in fiscal 2027:

• Organic net sales to be approximately flat.
• Organic operating income decline in the 3% to 5% range.
• Our effective tax rate to be in the range of approximately 20% to 22%.
• Capital expenditures planned to be in the range of $60 to $70 million.

Conference Call Details

Brown-Forman will host a conference call to discuss these results at 10:00 a.m. (ET) today. A live audio broadcast of the conference call, and the accompanying presentation slides, will be available via Brown-Forman’s website, brown-forman.com, through a link to “Investors/Events & Presentations.” A digital audio recording of the conference call and the presentation slides will also be posted on the website and will be available for at least 30 days following the conference call.

Brown-Forman Corporation is a global leader in the spirits industry, responsibly building exceptional beverage alcohol brands for more than 155 years. Headquartered in Louisville, Kentucky, we are guided by our founding promise, “Nothing Better in the Market.” Our premium portfolio includes the Jack Daniel’s Family of Brands, Woodford Reserve, Old Forester, New Mix, el Jimador, Herradura, The Glendronach, Glenglassaugh, Benriach, Diplomático Rum, Gin Mare, Fords Gin, Chambord, and Slane. With approximately 5,000 employees worldwide, we proudly share our passion for fine-quality spirits in more than 170 countries. Learn more at brown-forman.com and stay connected with us on LinkedIn, Instagram, and X.

Important Information on Forward-Looking Statements:

This press release contains statements, estimates, and projections that are “forward-looking statements” as defined under U.S. federal securities laws. Words such as “aim,” “ambition,” “anticipate,” “aspire,” “believe,” “can,” “continue,” “could,” “envision,” “estimate,” “expect,” “expectation,” “intend,” “may,” “might,” “plan,” “potential,” “project,” “pursue,” “see,” “seek,” “should,” “will,” “would,” and similar words indicate forward-looking statements, which speak only as of the date we make them. Except as required by law, we do not intend to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from those expressed in or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to:

• Our substantial dependence upon the continued growth of the Jack Daniel’s family of brands
• Substantial competition from new entrants, consolidations by competitors and retailers, and other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free goods), marketing, category expansion, product introductions, or entry or expansion in our geographic markets or distribution networks
• Disruption of our distribution network or inventory fluctuations in our products by distributors, wholesalers, or retailers
• Risks from changes to the trade policies, tariffs, and import and export regulations of the United States or foreign governments and the effectiveness of our actions to mitigate the negative impact on our margins, sales, and/or distributors
• Changes in consumer preferences, consumption, or purchase patterns – particularly away from larger producers in favor of small distilleries or local producers, or away from brown spirits, our premium products, or spirits generally, and our ability to anticipate or react to them; further legalization of marijuana; bar, restaurant, travel, or other on-premise declines; shifts in demographic or health and wellness trends; or unfavorable consumer reaction to new products, line extensions, package changes, product reformulations, or other product innovation
• Route-to-consumer changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, or result in higher fixed costs
• Production facility, aging warehouse, or supply chain disruption
• Imprecision in supply/demand forecasting
• Higher costs, lower quality, or unavailability of energy, water, raw materials, product ingredients, or labor
• Risks associated with acquisitions, dispositions, business partnerships, or investments – such as acquisition integration, termination difficulties or costs, or impairment in recorded value
• Unfavorable global or regional economic conditions and related economic slowdowns or recessions, low consumer confidence, high unemployment, weak credit or capital markets, budget deficits, burdensome government debt, austerity measures, higher interest rates, higher taxes, political instability, higher inflation, deflation, lower returns on pension assets, or lower discount rates for pension obligations
• Negative publicity related to our company, products, brands, marketing, executive leadership, employees, Board of Directors, family stockholders, operations, business performance, or prospects or risks relating to the increased risk of social media
• Product recalls or other product liability claims, product tampering, contamination, or quality issues
• Failure to attract or retain key executive or employee talent
• Impact of health epidemics and pandemics, and the risk of the resulting negative economic impacts and related governmental actions
• Risks associated with being a U.S.-based company with a global business, including commercial, political, and financial risks; local labor policies and conditions; compliance with local trade practices and other regulations; terrorism, kidnapping, extortion, or other types of violence; and health pandemics
• Failure to comply with anti-corruption laws, trade sanctions and restrictions, or similar laws or regulations
• Fluctuations in foreign currency exchange rates, particularly due to a stronger U.S. dollar
• A downgrade or potential downgrade of our credit ratings
• Changes in laws, regulatory measures, or governmental policies, especially those affecting production, importation, marketing, labeling, pricing, distribution, sale, or consumption of our beverage alcohol products
• Tax rate changes (including excise, corporate, sales or value-added taxes, property taxes, payroll taxes, import and export duties, and tariffs) or changes in related reserves, changes in tax rules or accounting standards, and the unpredictability and suddenness with which they can occur
• Decline in the social acceptability of beverage alcohol in significant markets
• Significant additional labeling or warning requirements or limitations on availability of our beverage alcohol products
• Counterfeiting and inadequate protection of our intellectual property rights
• Significant legal disputes and proceedings, or government investigations
• Cyberbreach or failure or corruption of our key information technology systems or those of our suppliers, customers, or direct and indirect business partners, or failure to comply with personal data protection laws
• Our status as a family “controlled company” under New York Stock Exchange rules, and our dual-class share structure

For further information on these and other risks, please refer to our public filings, including the “Risk Factors” section of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

Elizabeth Conway, Director, External Communications
Elizabeth_Conway@b-f.com

Sue Perram, Vice President, Director, Investor Relations
Sue_Perram@b-f.com