Brown-Forman sales and profits slip as global headwinds persist
The Jack Daniel’s owner posted another quarter of declining revenue and earnings as tariffs, weakening demand and portfolio changes hit results. Despite the slowdown, the company reaffirmed its full-year outlook.
Sales and profits at Brown-Forman, the owner of the Jack Daniels and Woodford Reserve brands, fell again in the three months to the end of October in the face of what it called “challenging headwinds”.
Reported sales fell 5% compared with the same period last year, taking them 4% lower in the first six months of the financial year.
Profits per share fell 14%, down US$34 million, for the quarter and 13%, down US$59 million, for the first half. Net income was US$224 million, (47 cents a share) compared with US$258 million (55 cents a share), in the same quarter in 2024. That marginally beat analysts’ consensus forecasts.
Sales fall
Net sales fell to US$1.04 billion from US$1.1 billion but topped Wall Street expectations of a fall to US$1.02 billion. On an organic basis, revenue fell 2%.
The lower sales figures reflected the end of the relationship with Korbel and the absence of the contribution from Sonoma-Cutrer following the sale to the Duckhorn Portfolio.
Tariffs weigh on performance
The performance was also heavily impacted by Canadian provinces removing US alcohol from their shelves in response to President Trump’s tariffs on Canadian goods but there was also a downturn in sales in the US as well as in Germany and the UK.
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Sales in the US for the first half of the year were down 9%, and net sales in developed international markets were 4% lower.
Full-year outlook
On the bright side, Brown-Forman maintained its forecast for the full year. It continues to predict organic net sales falling in the low-single digit range and a low-single digit decline in organic operating income.
The company said it expects the challenging conditions to continue in the face of economic and geopolitical volatility. Following the closure of its Louisville cooperage in January it also expects lower non-branded sales of used barrels.
Dividend increase
Shareholders, however, will be pleased that Brown Forman has increased its dividend for the 42nd consecutive time, maintaining its position among America’s “Dividend Aristocrats”.
“We continue to navigate a spirits sector facing headwinds and still expect that the behaviour of the consumer and the level of trade inventories will not change meaningfully during the 2026 fiscal year,” Chief Financial Officer Leanne Cunningham told analysts.
Whiskey sales flat
Overall, whiskey sales were flat in the second quarter. The launch of Jack Daniel’s Tennessee Blackberry and higher net sales of Woodford Reserve were not enough to offset lower sales of Jack Daniel’s Tennessee Whiskey and Jack Daniel’s Tennessee Honey.
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