Brown-Forman warns growth goal delayed as Bourbon slump bites
Lawson Whiting, chief executive of Brown-Forman, has said his plan to double the size of the group will take “a couple of years longer” than expected. The slowdown comes amid weakening global demand for Bourbon, political headwinds and investor pressure.
His original target date for reaching the goal was 2032, but he has trimmed his expectations as the global spirits industry struggles.
This year has been an annus horribilis for the producer of the Jack Daniel’s and Woodford Reserve labels.
As demand for Bourbon slumped in the wake of the drift away from Bourbon as a category and consumer resistance to price rises, the company has seen the value of its shares nosedive by a third.
Political tensions weigh on exports
It remains the target of angry Canadian state governments and their consumers, who are boycotting drinks produced in America in retaliation against President Trump’s tariff policies and his belief that Canada would be better off as the 51st state. Its sales to Canada, its largest single export market, have fallen by more than 60% this year.
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Further, although the EU has come to a tariff pact with Trump, there remains the possibility that Brussels could target American alcohol in the ongoing uncertainties.
Revenue and income decline
Recently, Brown-Forman announced that in the first quarter of fiscal 2026, its revenues had dropped by a further 3% to US$924m. Worse, its operating income contracted by 7%.
Restructuring and recovery hopes
This year, Brown-Forman has fired 12% of its workforce, sold its cooperages and drastically reshaped its US distribution arrangements. That created some wrinkles in its sales, which will unravel over the next two quarters.
After the company’s stock slumped earlier in the year, Whiting warned of challenging times ahead. Most recently, the company reiterated its expectation of a low-single-digit sales decline for the current fiscal year.
However, it has shown confidence in a return to growth by beginning a US$400m share buyback programme to improve investor returns.
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