Brown-Forman B 2026 Q2 Earnings EPS Drops 14.5% Amid Revenue Decline

Brown-Forman B (BF.B) reported Q2 2026 earnings on December 4, 2025, with results largely in line with guidance but below analyst expectations. Revenue fell 5.4% to $1.04 billion, while diluted EPS declined 14.5% to $0.47, missing the $0.48 consensus estimate. The company reaffirmed full-year guidance despite ongoing challenges in developed markets and used barrel sales.

Revenue

Total revenue for Q2 2026 declined to $1.04 billion, a 5.4% drop from $1.09 billion in the prior-year period. Whiskey sales led the portfolio at $771 million, followed by Ready-to-Drink at $138 million and Tequila at $67 million. Emerging markets and the Travel Retail channel offset declines in the U.S. and developed international markets, with non-branded and bulk sales plunging 61% to $8 million.

Earnings/Net Income

Diluted EPS fell to $0.47, a 14.5% decline from $0.55 in 2025 Q2, while net income dropped 13.2% to $224 million. Despite the downturn, the company has maintained profitability for over 20 years, reflecting operational resilience amid macroeconomic headwinds.

Price Action

BF.B shares edged down 2.61% in the latest trading day but gained 7.88% month-to-date. The stock’s post-earnings performance, however, remains mixed, with a 3.70% weekly gain.

Post-Earnings Price Action Review

The strategy of buying BF.B when its earnings beat expectations and selling after 30 days resulted in a -25.11% return, significantly underperforming the benchmark return of 27.97%. The strategy’s Sharpe ratio of -1.60 indicates substantial risk aversion, while the maximum drawdown of 0% suggests it minimized losses during market downturns.

CEO Commentary

CEO Lawson Whiting emphasized resilience in emerging markets, particularly Mexico and Brazil, and highlighted the success of Jack Daniel’s Tennessee Blackberry. He noted challenges from Canadian market disruptions and used barrel sales declines but reaffirmed confidence in navigating headwinds through innovation and workforce restructuring.

Guidance

Brown-Forman reaffirmed full-year 2026 guidance: a low-single-digit organic net sales decline, reported gross margin expansion, and diluted EPS in the low-single-digit decline range. Capital expenditures were reduced to $110–$120 million, reflecting completed projects and inventory reductions.

Additional News

The company’s board authorized a $400 million share repurchase program and increased the quarterly dividend for the 42nd consecutive year, raising it 2% to $0.2310 per share. CFO succession plans are underway, with the recruitment process expected to extend into early 2026. Additionally, the board approved a 2% dividend increase, marking 42 consecutive years of dividend hikes.

The firm also announced a 2% dividend raise, payable January 2, 2026, and updated its capital expenditure outlook to $110–$120 million from $125–$135 million, citing completed projects and inventory normalization.