BROWN-FORMAN REPORTS FIRST QUARTER FISCAL 2027 RESULTS; REAFFIRMS FULL YEAR
BROWN-FORMAN REPORTS FIRST QUARTER FISCAL 2027 RESULTS; REAFFIRMS FULL YEAR OUTLOOK
Brown-Forman Corporation (NYSE: BFA, BFB) reported financial results for its first quarter of fiscal 2027, ended July 31, 2026, with reported net sales decreasing 1% 1 to $911 million (-1% on an organic basis 2 ) compared to the same prior-year period. Reported operating income decreased 3% to $252 million (+4% on an organic basis) and diluted earnings per share increased 6% to $0.38.
"Our first quarter results were largely in line with our expectations and reinforce our confidence in the year ahead," said Lawson Whiting, President and Chief Executive Officer. "Innovation remains an important growth driver. Momentum from New Mix, our Ready-to-Drink 3 portfolio, and Jack Daniel's Tennessee Blackberry helped offset pressures elsewhere in the business and demonstrates our ability to create new opportunities for growth even in a challenging operating environment."
• Net sales declines were driven by the end of the Korbel relationship, as well as declines in used barrel sales and our tequila portfolio, partially offset by the growth of the Ready-to-Drink portfolio , led by New Mix.
• From a geographic perspective, net sales declines in Developed International 3 markets and the United States were partially offset by growth in Emerging 3 markets.
• Gross margin expanded 40 basis points driven by lower costs, partially offset by the negative effect of foreign exchange.
• Cash flows from operations grew by $13 million to $173 million and free cash flow 2 increased by $32 million to $161 million.
• Net sales for Whiskey 3 products were flat (flat organic) as the continued international launch of Jack Daniel’s Tennessee Blackberry was offset by declines of Jack Daniel’s Tennessee Honey and Gentleman Jack, while Jack Daniel’s Tennessee Whiskey was flat. • Net sales for the Ready-to-Drink portfolio increased 20% (+11% organic) driven by New Mix, which increased 48% (+36% organic) fueled by strong consumer demand in Mexico, the positive effect of foreign exchange, and the product’s launch in the United States.
• Net sales for the Tequila 3 portfolio decreased 12% (-13% organic). Herradura’s net sales declined 17% (-18% organic) driven by lower volumes in the United States and lower net pricing in Mexico. el Jimador’s net sales declined 10% (-11% organic) driven by lower net pricing in the United States.
• Rest of Portfolio's 3 net sales declined 35% (-12% organic) driven by the end of the Korbel relationship.
• Net sales for non-branded and bulk decreased 61% (-61% organic) driven by lower used barrel sales.
• Net sales in the United States declined 3% (flat organic) driven by the end of the Korbel relationship, an estimated net decrease in distributor inventories reflecting prior-year distributor transitions, and lower volumes of Jack Daniel's Tennessee Blackberry. These decreases were partially offset by higher volumes of Jack Daniel’s Tennessee Whiskey and the impact of the JDCC transition.
• Net sales in Developed International markets declined 6% (-8% organic) driven by lower volumes of Jack Daniel’s Tennessee Whiskey in Germany, France, and Spain.
• Net sales in Emerging markets increased 11% (+9% organic) driven by Mexico, fueled by the double-digit growth of New Mix.
• The Travel Retail’s 3 net sales declined 1% (-1% organic), as the channel was impacted by the Middle East geopolitical headwinds. The decline was primarily driven by lower volumes of Gin Mare, partially offset by the launch of Jack Daniel’s Tennessee Blackberry.
• Gross profit decreased 1% (+1% organic). Gross margin expanded 40 basis points to 60.2% driven by lower costs and the end of the Korbel relationship, partially offset by the negative effect of foreign exchange and unfavorable price/mix.
• Advertising expense decreased 5% (-4% organic ) driven by the timing of spend across the Jack Daniel’s family of brands, as declines in spending for Jack Daniel’s Tennessee Whiskey more than offset the increased investment for the continued international launch of Jack Daniel’s Tennessee Blackberry.
• Sel ling, general, and administrative (SG&A) expenses increased 4% (+5% organic) driven by the timing of costs related to targeted organizational realignments. 2 • Operating income decreased 3% (+4% organic) resulting in an operating margin decrease of 50 basis points to 27.7%. The operating margin decrease was primarily due to higher operating expenses, partially offset by gross margin expansion.
• Diluted earnings per share increased $0.02 driven by the lower non-operating postretirement expense and the accretive impact from share repurchases executed in the prior year, partially offset by the decrease in operating income.
On July 23, 2026, the Brown-Forman Board of Directors declared a regular quarterly cash dividend of $0.2310 per share on its Class A and Class B common stock. The dividend is payable on October 1, 2026, to stockholders of record on September 3, 2026. 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 $13 million to $173 million, primarily reflecting an increase in net income as well as disciplined working capital management, and free cash flow increased $32 million to $161 million, driven by strong operating cash flow generation and lower capital expenditure needs.
The company maintained a strong financial position with the repayment of the $343 million (€300 million) principal amount of its 1.20% senior notes on the July 7, 2026 maturity date.
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.
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 4,900 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.
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
• 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, as such risks may be increased due to social media
• Product recalls or other product liability claims, product tampering, contamination, or quality issues
• 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
• 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
• 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 see the risks and uncertainties described in Part I, Item 1A. Risk Factors of our 2026 Form 10-K, and those described from time to time in our reports on Form 10-Q filed with the SEC 5
April 30, July 31, 2026 2026 ────────────────────────────────────────────────────────────────────── Assets: Cash and cash equivalents $ 308 $ 301 Accounts receivable, net 832 822 Inventories 2,543 2,574 Other current assets 308 261 Total current assets 3,991 3,958 Property, plant, and equipment, net 1,116 1,100 Goodwill 1,522 1,513 Other intangible assets 943 936 Other assets 322 318 Total assets $ 7,894 $ 7,825 Liabilities: Accounts payable and accrued expenses $ 795 $ 700 Dividends payable — 106 Accrued income taxes 18 49 Short-term borrowings 68 358 Current portion of long-term debt 351 — Total current liabilities 1,232 1,213 Long-term debt 2,083 2,083 Deferred income taxes 207 200 Accrued postretirement benefits 172 171 Other liabilities 180 189 Total liabilities 3,874 3,856 Stockholders’ equity 4,020 3,969 Total liabilities and stockholders’ $ 7,894 $ 7,825 equity
2025 2026 ──────────────────────────────────────────────────────────────── Cash provided by operating activities $ 160 $ 173 Cash flows from investing activities: Proceeds from sale of cooperage assets 33 — Additions to property, plant, and -31 -12 equipment Other — -1 Cash provided by (used for) investing 2 -13 activities Cash flows from financing activities: Net change in short-term borrowings -30 289 Repayment of long-term debt — -343 Payments of withholding taxes related to -1 -3 stock-based awards Dividends paid -107 -106 Other — -1 Cash used for financing activities -138 -164 Effect of exchange rate changes 3 -3 Net increase (decrease) in cash, cash 27 -7 equivalents, and restricted cash Cash, cash equivalents, and restricted 463 327 cash at beginning of period Cash, cash equivalents, and restricted 490 320 cash at end of period Less: Restricted cash at end of period -19 -19 Cash and cash equivalents at end of $ 471 $ 301 period
Schedule A Brown-Forman Corporation Supplemental Statement of Operations Information (Unaudited) Percentage change versus the prior-year July 31, 2026 period ended 3 Months Reported change in net sales (1 %) Acquisitions and divestitures 2 % Other items* (1 %) Foreign exchange (1 %) Organic*change in net sales (1 %) Reported change in gross profit (1 %) Acquisitions and divestitures 1 % Other items* — % Foreign exchange 1 % Organic change in gross profit 1 % Reported change in advertising expenses (5 %) Acquisitions and divestitures 2 % Other items* — % Foreign exchange — % Organic change in advertising expenses (4 %) Reported change in SG&A 4 % Acquisitions and divestitures — % Other Items* 1 % Foreign exchange — % Organic change in SG&A 5 % Reported change in operating income (3 %) Acquisitions and divestitures 3 % Other items* 2 % Foreign exchange 2 % Organic change in operating income 4 %
* See “Note 2 - Non-GAAP Financial Measures” for details on our use of Non-GAAP financial measures, how these measures are calculated, and the reasons why we believe this information is useful to readers. Note: Totals may differ due to rounding. 9
^ See “Note 2 - Non-GAAP Financial Measures” for details on our use of Non-GAAP financial measures, how these measures are calculated, and the reasons why we believe this information is useful to readers. See “Note 3 - Definitions” for details on our brand aggregations and other metrics.
* Volumes are adjusted to remove increases or decreases related to acquired and divested brands for periods not comparable year over year. For additional information concerning acquisitions and divestitures impacting depletions and shipments, see the applicable defined terms in “Note 2 – Non-GAAP Financial Measures.” Note: Totals may differ due to rounding. 10
^ See “Note 2 - Non-GAAP Financial Measures” for details on our use of Non-GAAP financial measures, how these measures are calculated, and the reasons why we believe this information is useful to readers. See “Note 3 - Definitions” for details on our geographic aggregations and other metrics. Note: Totals may differ due to rounding. 11
Schedule D Brown-Forman Corporation Supplemental Information (Unaudited) — Estimated Net Change in Distributor Inventories^ Three Months Ended July 31, 2026 Estimated Net Change in Distributor Inventories^vs. Prior-Year Period Geographic Area^- Net Sales United States -4% Developed International -2% Emerging -3% Travel Retail 1% Non-branded and bulk —% Product category / brand family / brand^ Whiskey -4% JDTW 1% JDTH -4% Gentleman Jack -6% JDTA -9% JDTF -1% Woodford Reserve -8% Old Forester -11% Rest of Whiskey -48% Ready-to-Drink 1% JD RTD/RTP —% New Mix 2% Tequila -3% el Jimador -3% Herradura -3% Rest of Portfolio -3% Non-branded and bulk —% Statement of Operations Line Items Net Sales -3% Cost of Sales —% Gross Profit -5% Operating Income -10%
^ See “Note 3 - Definitions” for details on our geographic aggregations, brand aggregations, and other metrics.
Schedule E Brown-Forman Corporation Supplemental Free Cash Flow Information (Unaudited) For the Three Months Ended July 31, 2025 and 2026 (Dollars in millions) 2025 2026 Cash provided by operating activities $ 160 $ 173 Additions to property, plant, and -31 -12 equipment Free cash flow* 129 161
* See “Note 2 - Non-GAAP Financial Measures” for details on our use of Non-GAAP financial measures, how these measures are calculated, and the reasons why we believe this information is useful to readers. Note: Totals may differ due to rounding. 13
All related commentary and percentage growth rates are on a reported basis and compared to the same prior-year periods, unless otherwise noted.
Use of Non-GAAP Financial Information . We report our financial results in accordance with GAAP. Additionally, we use some financial measures in this press release that are not measures of financial performance under GAAP. These non- GAAP measures, defined below, should be viewed as supplements to (not substitutes for) our results of operations and other measures reported under GAAP. Other companies may define or calculate these non-GAAP measures differently. Reconciliations of these non-GAAP measures to the most closely comparable GAAP measures are presented on Schedules A, B, C, and E of this press release.
“Organic change” in measures of statements of operations . We present changes in certain measures, or line items, of the statements of operations that are adjusted to an “organic” basis. We use “organic change” for the following measures: (a) organic net sales; (b) organic cost of sales; (c) organic gross profit; (d) organic advertising expenses; (e) organic SG&A expenses; (f) organic other expense (income), net; (g) organic operating expenses * and (h) organic operating income. To calculate these measures, we adjust, as applicable, for (1) acquisitions and divestitures, (2) other items, and (3) foreign exchange. We explain these adjustments below.
• “Acquisitions and divestitures.” This adjustment removes (a) the gain or loss recognized on the sale of divested brands and certain assets, (b) any non- recurring effects related to our acquisitions and divestitures (e.g., transaction, transition, and integration costs), (c) the effects of operating activity related to acquired and divested brands, including certain divested agency brands, for periods not comparable year over year (non-comparable periods), and (d) fair value changes to contingent consideration liabilities. Excluding non-comparable periods allows us to include the effects of acquired and divested brands only to the extent that results are comparable year over year. For the first quarter of fiscal 2027, we had the following acquisitions and divestitures adjustments:
During fiscal 2023, we acquired the Gin Mare brand. The purchase price consisted of cash paid at the acquisition date plus contingent consideration that is payable in cash upon exercise by the sellers no later than July 2027. This adjustment removes the fair value impact from our other expense (income), net and operating income for the first quarter of fiscal 2026 and fiscal 2027.
During the first quarter of fiscal 2026, we ended our Korbel relationship. This adjustment removes the net sales, cost of sales, operating expenses, and operating income for the non-comparable period, which is activity from May through June of fiscal 2026.
“Restructuring initiative.” During the first quarter of fiscal 2026, we incurred $12 million in restructuring and other charges associated with the restructuring initiative and completed the sale of Brown-Forman Cooperage facility and related assets. The actions associated with this initiative were substantially completed during fiscal 2026. This adjustment removes the restructuring initiative impact from our operating expenses and operating income for the first quarter of fiscal 2026.
“Substitution drawback claims.” During the first quarter of fiscal 2026, we recognized a net benefit of $18 million related to the collection of substitution drawback claims filed with the U.S. Government between fiscal 2016 and 2019. As of the end of the first quarter of fiscal 2026, all claims had been collected. This adjustment removes the benefit from our other expense (income), net and operating income.
“Jack Daniel’s Country Cocktails business model change (JDCC transition).” During fiscal 2026, we agreed to conclude our relationship with Pabst Brewing Company for flavored malt beverages within the United States. We began transitioning the management of JDCC’s supply, sales, marketing, and distribution in the first quarter of fiscal 2027. This adjustment removes the non-comparable operating activity related to JDCC products for the first quarter of fiscal 2026 and fiscal 2027.
• “Foreign exchange.” We calculate the percentage change in certain line items of the statements of operations in accordance with GAAP and adjust to exclude the cost or benefit of currency fluctuations. Adjusting for foreign
* Operating expenses include advertising expenses, SG&A expenses, restructuring and other charges, and other expenses (income), net. 14 exchange allows us to understand our business on a constant-dollar basis, as fluctuations in exchange rates can distort the organic trend both positively and negatively. (In this press release, “dollar” means the U.S. dollar unless stated otherwise.) To eliminate the effect of foreign exchange fluctuations when comparing across periods, we translate current-year results at prior-year rates and remove transactional and hedging foreign exchange gains and losses from current- and prior-year periods.
We use the non-GAAP measure “organic change,” along with other metrics, to: (a) understand our performance from period to period on a consistent basis; (b) compare our performance to that of our competitors; (c) calculate components of management incentive compensation; (d) plan and forecast; and (e) communicate our financial performance to the Board of Directors, stockholders, and investment community. We have consistently applied the adjustments within our reconciliations in arriving at each non-GAAP measure. We believe these non-GAAP measures are useful to readers and investors because they enhance the understanding of our historical financial performance and comparability between periods. When we provide guidance for organic change in certain measures of the statements of operations we do not provide guidance for the corresponding GAAP change, as the GAAP measure will include items that are difficult to quantify or predict with reasonable certainty, such as foreign exchange, which could have a significant impact to our GAAP income statement measures.
In addition to the non-GAAP financial measures presented, we believe that our results are affected by changes in distributor inventories, particularly in our largest market, the United States, where the spirits industry is subject to regulations that essentially mandate a so-called “three-tier system,” with a value chain that includes suppliers, distributors, and retailers. Accordingly, we also provide information concerning estimated fluctuations in distributor inventories. We believe such information is useful in understanding our performance and trends as it provides relevant information regarding customers’ demand for our products. See Schedule D of this press release.
“Free cash flow.” Free cash flow is a liquidity measure that represents cash provided by operating activities less additions to property, plant, and equipment. In Schedule E, we provide this calculation for the relevant periods. We believe this non-GAAP measure provides useful information to investors about the amount of cash generated from our business operations. We use free cash flow primarily to meet current obligations, make appropriate capital and strategic investments, and return cash to our stockholders through regular dividends and, from time to time, through share repurchases and special dividends. Free cash flow is not a measure of cash available for discretionary expenditures since we have certain non-discretionary obligations, such as debt service, that are not deducted from this measure. Free cash flow should be considered in addition to, rather than as a substitute for, cash provided by operating activities reported under GAAP. 15
The following definitions include aggregations and other metrics used throughout this release.
Definition Aggregated markets as defined by the International Monetary Fund (IMF) Markets that are “advanced economies” as defined by the IMF, excluding the United States. Our top developed international markets for the fiscal year ended April 30, 2026 were Germany, Australia, the United Term Kingdom, France, and Spain. This Geographic Aggregations aggregation represents our net sales Developed International of branded products to these markets. ────────────────────────────────────────────────────────────────────────────── Spain Includes Spain and certain other surrounding territories. Markets that are “emerging and developing economies” as defined by the IMF. Our top emerging markets for Emerging the fiscal year ended April 30, 2026 were Mexico, Poland, Brazil, and Türkiye. This aggregation represents our net sales of branded products to these markets. Includes Brazil, Paraguay, Uruguay, Brazil and certain other surrounding territories. Represents our net sales of branded products to global duty-free Travel Retail customers, other travel retail customers, and the U.S. military, regardless of customer location. Includes net sales of used barrels, Non-branded and bulk contract bottling services, and non-branded bulk whiskey, regardless of customer location. Brand Aggregations Aggregated brands by product category Includes all whiskey spirits and whiskey-based flavored liqueurs. The brands included in this category are the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” Whiskey products defined below), the Woodford Reserve family of brands (Woodford Reserve), the Old Forester family of brands (Old Forester), The Glendronach, Benriach, Glenglassaugh, and Slane Irish Whiskey. Includes the Jack Daniel’s family of American whiskey brands (excluding the “Ready-to-Drink” products defined below), Woodford Reserve, and Old Forester. Includes Woodford Reserve, Gentleman Super-premium American whiskey Jack, and other super-premium Jack Daniel’s expressions. Includes the Jack Daniel’s Ready-to-Drink ready-to-drink (RTD) and ready-to-pour (RTP) products, New Mix, and other RTD/RTP products. Includes all RTD line extensions of Jack Daniel’s, such as Jack Daniel’s & Coca-Cola RTD, Jack Daniel’s & Cola, Jack Daniel’s RTD/RTP (JD RTD/RTP) Jack Daniel’s Double Jack, Jack Daniel’s Country Cocktails (JDCC), and other malt- and spirit-based Jack Daniel’s RTDs, along with Jack Daniel’s Winter Jack RTP. Includes all Jack Daniel’s & Coca-Cola Jack Daniel’s & Coca-Cola RTD RTD products and Jack Daniel’s bulk whiskey shipments for the production of these products. Includes el Jimador, the Herradura Tequila family of brands (Herradura), and other tequilas. Includes Diplomático, Gin Mare, Chambord, other agency brands (brands we do not own, but sell in certain Rest of Portfolio markets), Korbel California Champagnes and Korbel Brandy (the Korbel relationship ended on June 30, 2025), and Fords Gin. Includes net sales of used barrels, Non-branded and bulk contract bottling services, and non-branded bulk whiskey. Includes Jack Daniel’s Tennessee Whiskey (JDTW), JD RTD/RTP, Jack Daniel’s Tennessee Honey (JDTH), Gentleman Jack, Jack Daniel’s Tennessee Apple (JDTA), Jack Daniel’s Tennessee Blackberry (JDTB), Jack Daniel’s Tennessee Fire (JDTF), Jack Jack Daniel’s family of brands Daniel’s Single Barrel Collection (JDSB), Jack Daniel’s Bonded Series, Jack Daniel’s Sinatra Select, Jack Daniel’s 10-Year-Old Tennessee Whiskey, Jack Daniel’s American Single Malt, Jack Daniel’s 14-Year-Old Tennessee Whiskey, Jack Daniel’s 12-Year-Old Tennessee Whiskey, and other Jack Daniel’s expressions.
Term Definition Other Metrics We generally record revenues when we ship or deliver our products to our customers. In this report, unless Shipments otherwise specified, we refer to shipments when discussing volume. Volume is measured on a nine-liter equivalent unit basis (9-Liter cases). This metric is commonly used in the beverage alcohol industry to describe volume. Depending on the context, depletions usually means either (a) where Brown-Forman is the distributor, shipments directly to retail or wholesale customers or (b) Depletions where Brown-Forman is not the distributor, shipments from distributor customers to retailers and wholesalers. We believe that depletions measure volume in a way that more closely reflects consumer demand than our shipments to distributor customers do. When discussing trends in the market, we refer to consumer takeaway, a term commonly used in the beverage alcohol industry that refers to the purchase of product by consumers from retail outlets, including products purchased through e-commerce channels, as measured by volume or retail sales Consumer takeaway value. This information is provided by outside parties, such as Nielsen and the National Alcohol Beverage Control Association (NABCA). Our estimates of market share or changes in market share are derived from consumer takeaway data using the retail sales value metric. We believe consumer takeaway is a leading indicator of consumer demand trends. We generally recognize revenue when our products are shipped or delivered to customers. In the United States and certain other markets, our customers are distributors that sell downstream to retailers and consumers. We believe that our distributors’ downstream sales more closely reflect actual consumer demand than do our shipments to distributors. Our shipments increase distributors’ inventories, while distributors’ depletions (as described above) reduce their inventories. Therefore, it is possible that our shipments do not coincide with distributors’ downstream depletions and merely reflect changes in distributors’ inventories. Because changes in distributors’ inventories could affect our trends, we believe it is useful for investors to understand those changes in the context of our operating results. We perform the following calculation to determine the “estimated net Estimated net change in distributor change in distributor inventories”: inventories •For both the current-year period and the comparable prior-year period, we calculate a “depletion-based” amount by (a) dividing the organic dollar amount (e.g. organic net sales) by the corresponding shipment volumes to arrive at a shipment per case amount, and (b) multiplying the resulting shipment per case amount by the corresponding depletion volumes. We subtract the year-over-year percentage change of the “depletion-based” amount from the year-over-year percentage change of the organic amount to calculate the “estimated net change in distributor inventories.” •A positive difference is interpreted as a net increase in distributors’ inventories, which implies that organic trends could decrease as distributors reduce inventories; whereas, a negative difference is interpreted as a net decrease in distributors’ inventories, which implies that organic trends could increase as distributors rebuild inventories. Terms and Abbreviations During the first quarter of fiscal 2026, we ended our sales, marketing, Korbel relationship and distribution relationship with Korbel Champagne Cellars, effective June 30, 2025. SG&A Selling, general, and administrative GAAP Accounting principles generally accepted in the United States During the third quarter of fiscal 2025, our Board of Directors approved a plan to reduce our structural cost base and realign resources toward future sources of growth. This Restructuring initiative included reducing our workforce by approximately 12% and closing the Louisville-based Brown-Forman Cooperage. We also offered a special, one-time early retirement benefit to qualifying U.S. employees.
Full text with the tables
NEWS RELEASE
BROWN-FORMAN REPORTS FIRST QUARTER FISCAL 2027 RESULTS; REAFFIRMS FULL YEAR
OUTLOOK
September 2, 2026, LOUISVILLE, KY —
Brown-Forman Corporation (NYSE: BFA, BFB) reported financial results for its
first quarter of fiscal 2027, ended July 31, 2026, with reported net sales
decreasing 1% 1 to $911 million (-1% on an organic basis 2 ) compared to the
same prior-year period. Reported operating income decreased 3% to $252 million
(+4% on an organic basis) and diluted earnings per share increased 6% to $0.38.
"Our first quarter results were largely in line with our expectations and
reinforce our confidence in the year ahead," said Lawson Whiting, President and
Chief Executive Officer. "Innovation remains an important growth driver.
Momentum from New Mix, our Ready-to-Drink 3 portfolio, and Jack Daniel's
Tennessee Blackberry helped offset pressures elsewhere in the business and
demonstrates our ability to create new opportunities for growth even in a
challenging operating environment."
First Quarter of Fiscal 2027 Highlights
• Net sales declines were driven by the end of the Korbel relationship, as well
as declines in used barrel sales and our tequila portfolio, partially offset by
the growth of the Ready-to-Drink portfolio , led by New Mix.
• From a geographic perspective, net sales declines in Developed International 3
markets and the United States were partially offset by growth in Emerging 3
markets.
• Gross margin expanded 40 basis points driven by lower costs, partially offset
by the negative effect of foreign exchange.
• Cash flows from operations grew by $13 million to $173 million and free cash
flow 2 increased by $32 million to $161 million.
First Quarter of Fiscal 2027 Brand Results
• Net sales for Whiskey 3 products were flat (flat organic) as the continued
international launch of Jack Daniel’s Tennessee Blackberry was offset by
declines of Jack Daniel’s Tennessee Honey and Gentleman Jack, while Jack
Daniel’s Tennessee Whiskey was flat.
• Net sales for the Ready-to-Drink portfolio increased 20% (+11% organic) driven
by New Mix, which increased 48% (+36% organic) fueled by strong consumer demand
in Mexico, the positive effect of foreign exchange, and the product’s launch in
the United States.
• Net sales for the Tequila 3 portfolio decreased 12% (-13% organic).
Herradura’s net sales declined 17% (-18% organic) driven by lower volumes in the
United States and lower net pricing in Mexico. el Jimador’s net sales declined
10% (-11% organic) driven by lower net pricing in the United States.
• Rest of Portfolio's 3 net sales declined 35% (-12% organic) driven by the end
of the Korbel relationship.
• Net sales for non-branded and bulk decreased 61% (-61% organic) driven by
lower used barrel sales.
First Quarter of Fiscal 2027 Market Results
• Net sales in the United States declined 3% (flat organic) driven by the end of
the Korbel relationship, an estimated net decrease in distributor inventories
reflecting prior-year distributor transitions, and lower volumes of Jack
Daniel's Tennessee Blackberry. These decreases were partially offset by higher
volumes of Jack Daniel’s Tennessee Whiskey and the impact of the JDCC
transition.
• Net sales in Developed International markets declined 6% (-8% organic) driven
by lower volumes of Jack Daniel’s Tennessee Whiskey in Germany, France, and
Spain.
• Net sales in Emerging markets increased 11% (+9% organic) driven by Mexico,
fueled by the double-digit growth of New Mix.
• The Travel Retail’s 3 net sales declined 1% (-1% organic), as the channel was
impacted by the Middle East geopolitical headwinds. The decline was primarily
driven by lower volumes of Gin Mare, partially offset by the launch of Jack
Daniel’s Tennessee Blackberry.
First Quarter of Fiscal 2027 Other P&L Items
• Gross profit decreased 1% (+1% organic). Gross margin expanded 40 basis points
to 60.2% driven by lower costs and the end of the Korbel relationship, partially
offset by the negative effect of foreign exchange and unfavorable price/mix.
• Advertising expense decreased 5% (-4% organic ) driven by the timing of spend
across the Jack Daniel’s family of brands, as declines in spending for Jack
Daniel’s Tennessee Whiskey more than offset the increased investment for the
continued international launch of Jack Daniel’s Tennessee Blackberry.
• Sel ling, general, and administrative (SG&A) expenses increased 4% (+5%
organic) driven by the timing of costs related to targeted organizational
realignments.
2
• Operating income decreased 3% (+4% organic) resulting in an operating margin
decrease of 50 basis points to 27.7%. The operating margin decrease was
primarily due to higher operating expenses, partially offset by gross margin
expansion.
• Diluted earnings per share increased $0.02 driven by the lower non-operating
postretirement expense and the accretive impact from share repurchases executed
in the prior year, partially offset by the decrease in operating income.
First Quarter of Fiscal 2027 Financial Stewardship
On July 23, 2026, the Brown-Forman Board of Directors declared a regular
quarterly cash dividend of $0.2310 per share on its Class A and Class B common
stock. The dividend is payable on October 1, 2026, to stockholders of record on
September 3, 2026. 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 $13 million to $173 million,
primarily reflecting an increase in net income as well as disciplined working
capital management, and free cash flow increased $32 million to $161 million,
driven by strong operating cash flow generation and lower capital expenditure
needs.
The company maintained a strong financial position with the repayment of the
$343 million (€300 million) principal amount of its 1.20% senior notes on the
July 7, 2026 maturity date.
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 to 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.
3
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 4,900 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.
Contacts:
Elizabeth Conway, Director, External Communications
Elizabeth_Conway@b-f.com
Sue Perram, Vice President, Director, Investor Relations
Sue_Perram@b-f.com
4
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, as such risks may be increased
due to 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 see the risks and
uncertainties described in Part I, Item 1A. Risk Factors of our 2026 Form 10-K,
and those described from time to time in our reports on Form 10-Q filed with the
SEC
5
Brown-Forman Corporation
Unaudited Consolidated Statements of Operations
For the Three Months Ended July 31, 2025 and 2026
(Dollars in millions, except per share amounts)
2025 2026
──────────────────────────────────────────────────────────────────────────────
Net sales $ 924 $ 911 -1%
Cost of sales 372 362 -2%
Gross profit 552 549 -1%
Advertising expenses 120 114 -5%
Selling, general, and
administrative 177 185 4%
expenses
Restructuring and other charges 12 — -100%
Other expense (income), net -17 -2
Operating income 260 252 (3)%
Non-operating postretirement 19 1
expense
Interest expense, net 21 22
Income before income taxes 220 229 4%
Income taxes 50 53
Net income $ 170 $ 176 3%
Earnings per share:
Basic $ 0.36 $ 0.38 7%
Diluted $ 0.36 $ 0.38 6%
Gross margin 59.8 % 60.2 %
Operating margin 28.2 % 27.7 %
Effective tax rate 22.5 % 23.0 %
Cash dividends paid per common $ 0.2265 $ 0.2310
share
Shares (in thousands) used in the
calculation of earnings per share
Basic 472,724 458,824
Diluted 472,963 459,518
6
Brown-Forman Corporation
Unaudited Condensed Consolidated Balance Sheets
(Dollars in millions)
April 30, July 31,
2026 2026
──────────────────────────────────────────────────────────────────────
Assets:
Cash and cash equivalents $ 308 $ 301
Accounts receivable, net 832 822
Inventories 2,543 2,574
Other current assets 308 261
Total current assets 3,991 3,958
Property, plant, and equipment, net 1,116 1,100
Goodwill 1,522 1,513
Other intangible assets 943 936
Other assets 322 318
Total assets $ 7,894 $ 7,825
Liabilities:
Accounts payable and accrued expenses $ 795 $ 700
Dividends payable — 106
Accrued income taxes 18 49
Short-term borrowings 68 358
Current portion of long-term debt 351 —
Total current liabilities 1,232 1,213
Long-term debt 2,083 2,083
Deferred income taxes 207 200
Accrued postretirement benefits 172 171
Other liabilities 180 189
Total liabilities 3,874 3,856
Stockholders’ equity 4,020 3,969
Total liabilities and stockholders’ $ 7,894 $ 7,825
equity
7
Brown-Forman Corporation
Unaudited Condensed Consolidated Statements of Cash Flows
For the Three Months Ended July 31, 2025 and 2026
(Dollars in millions)
2025 2026
────────────────────────────────────────────────────────────────
Cash provided by operating activities $ 160 $ 173
Cash flows from investing activities:
Proceeds from sale of cooperage assets 33 —
Additions to property, plant, and -31 -12
equipment
Other — -1
Cash provided by (used for) investing 2 -13
activities
Cash flows from financing activities:
Net change in short-term borrowings -30 289
Repayment of long-term debt — -343
Payments of withholding taxes related to -1 -3
stock-based awards
Dividends paid -107 -106
Other — -1
Cash used for financing activities -138 -164
Effect of exchange rate changes 3 -3
Net increase (decrease) in cash, cash 27 -7
equivalents, and restricted cash
Cash, cash equivalents, and restricted 463 327
cash at beginning of period
Cash, cash equivalents, and restricted 490 320
cash at end of period
Less: Restricted cash at end of period -19 -19
Cash and cash equivalents at end of $ 471 $ 301
period
8
Schedule A
Brown-Forman Corporation
Supplemental Statement of Operations
Information (Unaudited)
Percentage change versus the prior-year July 31, 2026
period ended
3 Months
Reported change in net sales (1 %)
Acquisitions and divestitures 2 %
Other items* (1 %)
Foreign exchange (1 %)
Organic*change in net sales (1 %)
Reported change in gross profit (1 %)
Acquisitions and divestitures 1 %
Other items* — %
Foreign exchange 1 %
Organic change in gross profit 1 %
Reported change in advertising expenses (5 %)
Acquisitions and divestitures 2 %
Other items* — %
Foreign exchange — %
Organic change in advertising expenses (4 %)
Reported change in SG&A 4 %
Acquisitions and divestitures — %
Other Items* 1 %
Foreign exchange — %
Organic change in SG&A 5 %
Reported change in operating income (3 %)
Acquisitions and divestitures 3 %
Other items* 2 %
Foreign exchange 2 %
Organic change in operating income 4 %
* See “Note 2 - Non-GAAP Financial Measures” for details on our use of Non-GAAP
financial measures, how these measures are calculated, and the reasons why we
believe this information is useful to readers.
Note: Totals may differ due to rounding.
9
…
…
…
…
… %
… …
… …
…
…
%
… … … …
… … … … … …
…
…
… 2 % … — % — % — %
… … … … … % — % — %
… … … … … … — % — …
… … … … … … — % 2 …
… 1 % … … … — % — …
… … … … … … — % — …
… 3 % … … % — % — %
… 4 % … … % — % — %
… … % … … % — % — %
… … % … … % — … … %
… … … … … % — … … …
… … % … … % — % … %
… … … … … … — % … …
… … … … … … — % … …
… … … … … … — % … …
… … … … … … … % — …
… … … … — % — …
… 8 % … 7 … 2 … … …
… — % … … % … % — …
… 1 % … … … … % — …
… … … … … … — % … …
… … … … … … — % — …
^ See “Note 2 - Non-GAAP Financial Measures” for details on our use of Non-GAAP
financial measures, how these measures are calculated, and the reasons why we
believe this information is useful to readers. See “Note 3 - Definitions” for
details on our brand aggregations and other metrics.
* Volumes are adjusted to remove increases or decreases related to acquired and
divested brands for periods not comparable year over year. For additional
information concerning acquisitions and divestitures impacting depletions and
shipments, see the applicable defined terms in “Note 2 – Non-GAAP Financial
Measures.”
Note: Totals may differ due to rounding.
10
Sc…
C
Br…
Co…
Su…
St…
of
Op…
In…
(U…
Th…
Mo…
En…
Ju…
31,
20…
Net
Sal…
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Cha…
vs.
Pri…
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Ge… Acq… Ot… For…
Ar… Rep… and It… Exc… Or…
Div…
Un… (3 %) 4 % (1 %) — % — %
St…
De… (6 %) — % — % (1 %) (8 %)
In…
Ge… (11 %) — % — % (1 %) (11 %)
Au… 10 % — % — % (5 %) 4 %
Un… (5 %) — % — % (1 %) (6 %)
Ki…
Fr… (14 %) — % — % (1 %) (15 %)
Sp… (16 %) — % — % — % (16 %)
Re…
of (10 %) — % — % 2 % (8 %)
De…
In…
Em… 11 % — % — % (2 %) 9 %
Me… 26 % — % — % (11 %) 15 %
Po… (4 %) — % — % (1 %) (5 %)
Br… (12 %) — % — % (3 %) (15 %)
Tü… (14 %) — % — % 23 % 9 %
Re…
of 20 % — % — % — % 20 %
Em…
Tr… (1 %) — % — % — % (1 %)
Re…
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and (61 %) — % — % — % (61 %)
bu…
To… (1 %) 2 % (1 %) (1 %) (1 %)
^ See “Note 2 - Non-GAAP Financial Measures” for details on our use of Non-GAAP
financial measures, how these measures are calculated, and the reasons why we
believe this information is useful to readers. See “Note 3 - Definitions” for
details on our geographic aggregations and other metrics.
Note: Totals may differ due to rounding.
11
Schedule D
Brown-Forman Corporation
Supplemental Information
(Unaudited) —
Estimated Net Change in
Distributor
Inventories^
Three Months Ended July 31, 2026
Estimated Net Change in
Distributor Inventories^vs.
Prior-Year Period
Geographic Area^- Net Sales
United States -4%
Developed International -2%
Emerging -3%
Travel Retail 1%
Non-branded and bulk —%
Product category / brand family
/ brand^
Whiskey -4%
JDTW 1%
JDTH -4%
Gentleman Jack -6%
JDTA -9%
JDTF -1%
Woodford Reserve -8%
Old Forester -11%
Rest of Whiskey -48%
Ready-to-Drink 1%
JD RTD/RTP —%
New Mix 2%
Tequila -3%
el Jimador -3%
Herradura -3%
Rest of Portfolio -3%
Non-branded and bulk —%
Statement of Operations Line
Items
Net Sales -3%
Cost of Sales —%
Gross Profit -5%
Operating Income -10%
^ See “Note 3 - Definitions” for details on our geographic aggregations, brand
aggregations, and other metrics.
A positive difference is interpreted as a net increase in distributors’
inventories; whereas, a negative difference is interpreted as a net decrease in
distributors’ inventories.
12
Schedule E
Brown-Forman Corporation
Supplemental Free Cash Flow Information
(Unaudited)
For the Three Months Ended July 31, 2025
and 2026
(Dollars in millions)
2025 2026
Cash provided by operating activities $ 160 $ 173
Additions to property, plant, and -31 -12
equipment
Free cash flow* 129 161
* See “Note 2 - Non-GAAP Financial Measures” for details on our use of Non-GAAP
financial measures, how these measures are calculated, and the reasons why we
believe this information is useful to readers.
Note: Totals may differ due to rounding.
13
Note 1 -
All related commentary and percentage growth rates are on a reported basis and
compared to the same prior-year periods, unless otherwise noted.
Note 2 - Non-GAAP Financial Measures
Use of Non-GAAP Financial Information . We report our financial results in
accordance with GAAP. Additionally, we use some financial measures in this press
release that are not measures of financial performance under GAAP. These non-
GAAP measures, defined below, should be viewed as supplements to (not
substitutes for) our results of operations and other measures reported under
GAAP. Other companies may define or calculate these non-GAAP measures
differently. Reconciliations of these non-GAAP measures to the most closely
comparable GAAP measures are presented on Schedules A, B, C, and E of this press
release.
“Organic change” in measures of statements of operations . We present changes in
certain measures, or line items, of the statements of operations that are
adjusted to an “organic” basis. We use “organic change” for the following
measures: (a) organic net sales; (b) organic cost of sales; (c) organic gross
profit; (d) organic advertising expenses; (e) organic SG&A expenses; (f) organic
other expense (income), net; (g) organic operating expenses * and (h) organic
operating income. To calculate these measures, we adjust, as applicable, for (1)
acquisitions and divestitures, (2) other items, and (3) foreign exchange. We
explain these adjustments below.
• “Acquisitions and divestitures.” This adjustment removes (a) the gain or loss
recognized on the sale of divested brands and certain assets, (b) any non-
recurring effects related to our acquisitions and divestitures (e.g.,
transaction, transition, and integration costs), (c) the effects of operating
activity related to acquired and divested brands, including certain divested
agency brands, for periods not comparable year over year (non-comparable
periods), and (d) fair value changes to contingent consideration liabilities.
Excluding non-comparable periods allows us to include the effects of acquired
and divested brands only to the extent that results are comparable year over
year. For the first quarter of fiscal 2027, we had the following acquisitions
and divestitures adjustments:
During fiscal 2023, we acquired the Gin Mare brand. The purchase price consisted
of cash paid at the acquisition date plus contingent consideration that is
payable in cash upon exercise by the sellers no later than July 2027. This
adjustment removes the fair value impact from our other expense (income), net
and operating income for the first quarter of fiscal 2026 and fiscal 2027.
During the first quarter of fiscal 2026, we ended our Korbel relationship. This
adjustment removes the net sales, cost of sales, operating expenses, and
operating income for the non-comparable period, which is activity from May
through June of fiscal 2026.
• “Other items.” Other items include the additional items outlined below.
“Restructuring initiative.” During the first quarter of fiscal 2026, we incurred
$12 million in restructuring and other charges associated with the restructuring
initiative and completed the sale of Brown-Forman Cooperage facility and related
assets. The actions associated with this initiative were substantially completed
during fiscal 2026. This adjustment removes the restructuring initiative impact
from our operating expenses and operating income for the first quarter of fiscal
2026.
“Substitution drawback claims.” During the first quarter of fiscal 2026, we
recognized a net benefit of $18 million related to the collection of
substitution drawback claims filed with the U.S. Government between fiscal 2016
and 2019. As of the end of the first quarter of fiscal 2026, all claims had been
collected. This adjustment removes the benefit from our other expense (income),
net and operating income.
“Jack Daniel’s Country Cocktails business model change (JDCC transition).”
During fiscal 2026, we agreed to conclude our relationship with Pabst Brewing
Company for flavored malt beverages within the United States. We began
transitioning the management of JDCC’s supply, sales, marketing, and
distribution in the first quarter of fiscal 2027. This adjustment removes the
non-comparable operating activity related to JDCC products for the first quarter
of fiscal 2026 and fiscal 2027.
• “Foreign exchange.” We calculate the percentage change in certain line items
of the statements of operations in accordance with GAAP and adjust to exclude
the cost or benefit of currency fluctuations. Adjusting for foreign
* Operating expenses include advertising expenses, SG&A expenses, restructuring
and other charges, and other expenses (income), net.
14
exchange allows us to understand our business on a constant-dollar basis, as
fluctuations in exchange rates can distort the organic trend both positively and
negatively. (In this press release, “dollar” means the U.S. dollar unless stated
otherwise.) To eliminate the effect of foreign exchange fluctuations when
comparing across periods, we translate current-year results at prior-year rates
and remove transactional and hedging foreign exchange gains and losses from
current- and prior-year periods.
We use the non-GAAP measure “organic change,” along with other metrics, to: (a)
understand our performance from period to period on a consistent basis; (b)
compare our performance to that of our competitors; (c) calculate components of
management incentive compensation; (d) plan and forecast; and (e) communicate
our financial performance to the Board of Directors, stockholders, and
investment community. We have consistently applied the adjustments within our
reconciliations in arriving at each non-GAAP measure. We believe these non-GAAP
measures are useful to readers and investors because they enhance the
understanding of our historical financial performance and comparability between
periods. When we provide guidance for organic change in certain measures of the
statements of operations we do not provide guidance for the corresponding GAAP
change, as the GAAP measure will include items that are difficult to quantify or
predict with reasonable certainty, such as foreign exchange, which could have a
significant impact to our GAAP income statement measures.
In addition to the non-GAAP financial measures presented, we believe that our
results are affected by changes in distributor inventories, particularly in our
largest market, the United States, where the spirits industry is subject to
regulations that essentially mandate a so-called “three-tier system,” with a
value chain that includes suppliers, distributors, and retailers. Accordingly,
we also provide information concerning estimated fluctuations in distributor
inventories. We believe such information is useful in understanding our
performance and trends as it provides relevant information regarding customers’
demand for our products. See Schedule D of this press release.
“Free cash flow.” Free cash flow is a liquidity measure that represents cash
provided by operating activities less additions to property, plant, and
equipment. In Schedule E, we provide this calculation for the relevant periods.
We believe this non-GAAP measure provides useful information to investors about
the amount of cash generated from our business operations. We use free cash flow
primarily to meet current obligations, make appropriate capital and strategic
investments, and return cash to our stockholders through regular dividends and,
from time to time, through share repurchases and special dividends. Free cash
flow is not a measure of cash available for discretionary expenditures since we
have certain non-discretionary obligations, such as debt service, that are not
deducted from this measure. Free cash flow should be considered in addition to,
rather than as a substitute for, cash provided by operating activities reported
under GAAP.
15
Note 3 - Definitions
The following definitions include aggregations and other metrics used throughout
this release.
Definition
Aggregated markets as defined by the
International Monetary Fund (IMF)
Markets that are “advanced economies”
as defined by the IMF, excluding the
United States. Our top developed
international markets for the fiscal
year ended April 30, 2026 were
Germany, Australia, the United
Term Kingdom, France, and Spain. This
Geographic Aggregations aggregation represents our net sales
Developed International of branded products to these markets.
──────────────────────────────────────────────────────────────────────────────
Spain Includes Spain and certain other
surrounding territories.
Markets that are “emerging and
developing economies” as defined by
the IMF. Our top emerging markets for
Emerging the fiscal year ended April 30, 2026
were Mexico, Poland, Brazil, and
Türkiye. This aggregation represents
our net sales of branded products to
these markets.
Includes Brazil, Paraguay, Uruguay,
Brazil and certain other surrounding
territories.
Represents our net sales of branded
products to global duty-free
Travel Retail customers, other travel retail
customers, and the U.S. military,
regardless of customer location.
Includes net sales of used barrels,
Non-branded and bulk contract bottling services, and
non-branded bulk whiskey, regardless
of customer location.
Brand Aggregations Aggregated brands by product category
Includes all whiskey spirits and
whiskey-based flavored liqueurs. The
brands included in this category are
the Jack Daniel’s family of brands
(excluding the “Ready-to-Drink”
Whiskey products defined below), the Woodford
Reserve family of brands (Woodford
Reserve), the Old Forester family of
brands (Old Forester), The
Glendronach, Benriach, Glenglassaugh,
and Slane Irish Whiskey.
Includes the Jack Daniel’s family of
American whiskey brands (excluding the “Ready-to-Drink”
products defined below), Woodford
Reserve, and Old Forester.
Includes Woodford Reserve, Gentleman
Super-premium American whiskey Jack, and other super-premium Jack
Daniel’s expressions.
Includes the Jack Daniel’s
Ready-to-Drink ready-to-drink (RTD) and ready-to-pour
(RTP) products, New Mix, and other
RTD/RTP products.
Includes all RTD line extensions of
Jack Daniel’s, such as Jack Daniel’s &
Coca-Cola RTD, Jack Daniel’s & Cola,
Jack Daniel’s RTD/RTP (JD RTD/RTP) Jack Daniel’s Double Jack, Jack
Daniel’s Country Cocktails (JDCC), and
other malt- and spirit-based Jack
Daniel’s RTDs, along with Jack
Daniel’s Winter Jack RTP.
Includes all Jack Daniel’s & Coca-Cola
Jack Daniel’s & Coca-Cola RTD RTD products and Jack Daniel’s bulk
whiskey shipments for the production
of these products.
Includes el Jimador, the Herradura
Tequila family of brands (Herradura), and
other tequilas.
Includes Diplomático, Gin Mare,
Chambord, other agency brands (brands
we do not own, but sell in certain
Rest of Portfolio markets), Korbel California Champagnes
and Korbel Brandy (the Korbel
relationship ended on June 30, 2025),
and Fords Gin.
Includes net sales of used barrels,
Non-branded and bulk contract bottling services, and
non-branded bulk whiskey.
Includes Jack Daniel’s Tennessee
Whiskey (JDTW), JD RTD/RTP, Jack
Daniel’s Tennessee Honey (JDTH),
Gentleman Jack, Jack Daniel’s
Tennessee Apple (JDTA), Jack Daniel’s
Tennessee Blackberry (JDTB), Jack
Daniel’s Tennessee Fire (JDTF), Jack
Jack Daniel’s family of brands Daniel’s Single Barrel Collection
(JDSB), Jack Daniel’s Bonded Series,
Jack Daniel’s Sinatra Select, Jack
Daniel’s 10-Year-Old Tennessee
Whiskey, Jack Daniel’s American Single
Malt, Jack Daniel’s 14-Year-Old
Tennessee Whiskey, Jack Daniel’s
12-Year-Old Tennessee Whiskey, and
other Jack Daniel’s expressions.
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Term Definition
Other Metrics
We generally record revenues when we
ship or deliver our products to our
customers. In this report, unless
Shipments otherwise specified, we refer to
shipments when discussing volume.
Volume is measured on a nine-liter
equivalent unit basis (9-Liter
cases).
This metric is commonly used in the
beverage alcohol industry to describe
volume. Depending on the context,
depletions usually means either (a)
where Brown-Forman is the
distributor, shipments directly to
retail or wholesale customers or (b)
Depletions where Brown-Forman is not the
distributor, shipments from
distributor customers to retailers
and wholesalers. We believe that
depletions measure volume in a way
that more closely reflects consumer
demand than our shipments to
distributor customers do.
When discussing trends in the market,
we refer to consumer takeaway, a term
commonly used in the beverage alcohol
industry that refers to the purchase
of product by consumers from retail
outlets, including products purchased
through e-commerce channels, as
measured by volume or retail sales
Consumer takeaway value. This information is provided
by outside parties, such as Nielsen
and the National Alcohol Beverage
Control Association (NABCA). Our
estimates of market share or changes
in market share are derived from
consumer takeaway data using the
retail sales value metric. We believe
consumer takeaway is a leading
indicator of consumer demand trends.
We generally recognize revenue when
our products are shipped or delivered
to customers. In the United States
and certain other markets, our
customers are distributors that sell
downstream to retailers and
consumers. We believe that our
distributors’ downstream sales more
closely reflect actual consumer
demand than do our shipments to
distributors. Our shipments increase
distributors’ inventories, while
distributors’ depletions (as
described above) reduce their
inventories. Therefore, it is
possible that our shipments do not
coincide with distributors’
downstream depletions and merely
reflect changes in distributors’
inventories. Because changes in
distributors’ inventories could
affect our trends, we believe it is
useful for investors to understand
those changes in the context of our
operating results.
We perform the following calculation
to determine the “estimated net
Estimated net change in distributor change in distributor inventories”:
inventories •For both the current-year period and
the comparable prior-year period, we
calculate a “depletion-based” amount
by (a) dividing the organic dollar
amount (e.g. organic net sales) by
the corresponding shipment volumes to
arrive at a shipment per case amount,
and (b) multiplying the resulting
shipment per case amount by the
corresponding depletion volumes. We
subtract the year-over-year
percentage change of the
“depletion-based” amount from the
year-over-year percentage change of
the organic amount to calculate the
“estimated net change in distributor
inventories.”
•A positive difference is interpreted
as a net increase in distributors’
inventories, which implies that
organic trends could decrease as
distributors reduce inventories;
whereas, a negative difference is
interpreted as a net decrease in
distributors’ inventories, which
implies that organic trends could
increase as distributors rebuild
inventories.
Terms and Abbreviations
During the first quarter of fiscal
2026, we ended our sales, marketing,
Korbel relationship and distribution relationship with
Korbel Champagne Cellars, effective
June 30, 2025.
SG&A Selling, general, and administrative
GAAP Accounting principles generally
accepted in the United States
During the third quarter of fiscal
2025, our Board of Directors approved
a plan to reduce our structural cost
base and realign resources toward
future sources of growth. This
Restructuring initiative included reducing our workforce by
approximately 12% and closing the
Louisville-based Brown-Forman
Cooperage. We also offered a special,
one-time early retirement benefit to
qualifying U.S. employees.
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