Brown-Forman A 2025 Q4 Earnings Misses Targets with Net Income Down 45%

Brown-Forman A (BF.A) reported its fiscal 2025 Q4 earnings on Jun 05th, 2025. The company fell short of analyst expectations, reporting earnings per share of $0.31 against the projected $0.34. Revenue also missed, coming in at $894 million compared to the forecasted $967.4 million. Brown-Forman anticipates continued challenges in fiscal 2026 due to macroeconomic and geopolitical uncertainties but remains optimistic about its ability to adapt and grow sustainably. The company expects low-single-digit declines in both organic net sales and operating income, with capital expenditures projected between $125 million and $135 million.

Revenue

Brown-Forman A saw a decline in total revenue by 7.3% to $894 million in 2025 Q4, compared to $964 million in 2024 Q4.

Earnings/Net Income

Brown-Forman A's EPS dropped 44.6% to $0.31 in 2025 Q4 from $0.56 in 2024 Q4, with net income decreasing 45.1% to $146 million. The substantial decline reflects challenging conditions.

Price Action

The stock price of Brown-Forman A has dropped 5.22% during the latest trading day, has plummeted 19.31% during the most recent full trading week, and has plummeted 20.02% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing BF.A stocks when revenue exceeded expectations and holding for 30 days proved ineffective, generating a return of -44.13%. The strategy's Sharpe ratio was -0.44, signifying considerable risk and negative returns. It faced a maximum drawdown of -57.05% with volatility at 25.20%. These figures highlight the strategy's inability to leverage positive revenue news, demonstrating its unsuitability for investors aiming for long-term growth or stability. Overall, the strategy did not meet risk and return benchmarks.

CEO Commentary

“Our ability to deliver organic growth on both the top and bottom line in a year of softening consumer demand is a testament to the strength and resilience of our team,” said Lawson Whiting, President and Chief Executive Officer of Brown-Forman. He acknowledged that while results fell short of long-term growth aspirations, the company made important progress amid a challenging macroeconomic environment. Whiting emphasized that strategic investments in agility, innovation, and execution will position the company to navigate uncertainty and seize new opportunities for sustainable long-term growth.

Guidance

Looking ahead to fiscal 2026, the company expects continued headwinds due to ongoing macroeconomic and geopolitical uncertainties that have negatively impacted consumer confidence and discretionary spending. Despite these challenges, Brown-Forman remains confident in its capacity to adapt and execute effectively, which it believes will unlock new opportunities for growth.

Additional News

Brown-Forman declared a regular quarterly cash dividend of $0.2265 per share on May 22, 2025, payable on July 1, 2025, showcasing its commitment to returning value to shareholders. The company also announced a workforce reduction of approximately 12% as part of a restructuring initiative aimed at achieving annualized savings of $70 to $80 million. Additionally, Brown-Forman completed the sale of its 21.4% ownership interest in The Duckhorn Portfolio Inc. for $350 million, recognizing a pretax gain of $78 million from the transaction. These strategic moves reflect Brown-Forman's focus on streamlining operations and enhancing shareholder value amidst a challenging economic landscape.