Brown-Forman (BF) shares edged higher Thursday after the spirits maker behind Jack Daniel's, Woodford Reserve, and Herradura reported fiscal fourth-quarter results that beat revenue expectations but missed on earnings.
The Louisville-based company posted net sales of $912 million for the quarter, up 2% from a year ago and ahead of the $883.8 million analysts were looking for. Organic net sales also rose 2%. But operating income took a 53% hit to $96 million, and adjusted earnings fell to 12 cents per share from 32 cents a year earlier, well below the 33-cent consensus.
For the full fiscal year 2026, net sales declined, largely due to the end of the Korbel Champagne Cellars relationship and the absence of transition services revenue from last year's Sonoma-Cutrer divestiture. Growth in emerging markets and travel retail helped offset weaker U.S. sales, while developed international markets were mostly flat. Gross margin expanded by 160 basis points, helped by acquisitions and divestitures. Cash flow from operations jumped $402 million to $1.0 billion, and free cash flow rose $462 million to $893 million. The company returned $827 million to shareholders through dividends and buybacks.
Breaking down the portfolio, the whiskey business—which includes Jack Daniel's and Woodford Reserve—saw reported net sales rise 3% and organic net sales inch up 1%. The launch of Jack Daniel's Tennessee BlackBerry was a big contributor, along with favorable currency trends and strong Woodford Reserve sales in the U.S. The tequila portfolio, however, slipped 4% in reported sales and 6% organically, with Herradura down 9% and el Jimador down 2% on weaker demand in the U.S. and Mexico. Ready-to-drink (RTD) sales jumped 11% overall, or 7% organically, powered by New Mix's 41% surge from market share gains in Mexico and U.S. expansion. The Jack Daniel's RTD portfolio declined 3% amid softer U.S. demand and the absence of American-made beverage alcohol products in most Canadian provinces. Sales from the rest of the portfolio fell 31% due to divestitures, and non-branded and bulk sales dropped 68% on lower used-barrel sales.
Jack Daniel's Tennessee BlackBerry has become one of Brown-Forman's biggest growth stories. Executives said it's the second-largest new spirits product by value in Nielsen-tracked markets, driving strong consumer engagement in the U.S. and exceeding expectations in early international markets.
Looking ahead, Brown-Forman warned that fiscal 2027 will remain challenging. Macroeconomic pressures and geopolitical uncertainty are expected to keep weighing on consumer spending and alcohol demand, especially in developed markets. The company forecasts organic net sales to be roughly flat and organic operating income to decline 3% to 5%. To navigate this, Brown-Forman is counting on previously announced restructuring, changes to its U.S. distribution model, and continued innovation—including expanding Jack Daniel's Tennessee BlackBerry.
Shares were up 1.41% at $25.11 at the time of publication Thursday.
