Brown-Forman B 2026 Q1 Earnings Misses Targets with 12.8% Net Income Drop

Brown-Forman B reported mixed first-quarter fiscal 2026 earnings, with revenue declining and guidance remaining unchanged. The company fell short of expectations with a 2.8% revenue drop and a 12.8% year-over-year net income decline. While the CEO expressed cautious optimism, citing growth in emerging markets, the company reaffirmed its full-year guidance without raising or lowering its projections.

[Revenue]
Brown-Forman B reported total revenue of $924 million in Q1 fiscal 2026, a 2.8% decline from $951 million in the same period last year. The Spirits segment accounted for the lion’s share, generating $787 million, driven by the Whiskey category, which contributed $659 million. The Ready-to-Drink segment added $128 million, while Tequila revenue totaled $62 million. Non-branded and bulk sales brought in $14 million, and the rest of the portfolio generated $61 million in revenue, reflecting a diversified but slightly underperforming portfolio.

[Earnings/Net Income]
Net income fell 12.8% to $170 million in fiscal 2026 Q1, compared to $195 million in the prior-year period. Earnings per share declined 12.2% to $0.36, underscoring a challenging quarter for profitability. These results indicate a weak performance in earnings metrics, despite the company’s long-standing operational resilience and consistent quarterly profitability over two decades.

[Price Action]
The stock price of Brown-Forman B experienced a sharp downturn, falling 8.09% in a single trading day, 4.89% for the week, and 4.52% month-to-date. The negative momentum reflects investor concerns over the earnings report and broader market sentiment.

[Post-Earnings Price Action Review]
A strategy of buying BF.B following a revenue miss and holding for 30 days produced a -58.75% return, far below the benchmark's 79.85%. The resulting -138.60% excess return and -16.56% CAGR highlighted the inefficacy of this approach. Despite a Sharpe ratio of -0.63 and a maximum drawdown of 0.00%, the strategy failed to mitigate risk, further illustrating its poor performance.

[CEO Commentary]
Lawson E. Whiting attributed the 3% reported net sales decline to challenges in developed international markets and a 2% U.S. dip. However, he highlighted growth in emerging markets such as Mexico and Brazil, where Jack Daniel’s and RTD innovations drove momentum. The CEO emphasized innovation, brand extensions, and premiumization as key priorities for attracting new consumers and retaining core ones.

[Guidance]
Brown-Forman B maintained its full-year fiscal 2026 guidance, projecting a low single-digit organic net sales decline and gross margin expansion. Leanne D. Cunningham, CFO, reiterated a diluted EPS estimate of $0.36 for Q1, a 13% drop year-over-year, with capital expenditures expected between $125–135 million. The company also anticipates lower used barrel sales and ongoing inventory normalization, despite headwinds in Canada and the U.S. beverage alcohol trade.

[Additional News]
No major earnings-related news was reported within the three weeks preceding the earnings release. On August 21, 2025, an attempt to access the latest stock news for Brown-Forman Corporation (BF.B) was denied. No recent mergers, acquisitions, C-level changes, or dividend/buyback announcements were available for inclusion.