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

Brown-Forman B (BF.B) reported fiscal 2026 Q2 earnings on December 4, 2025, with results largely in line with expectations. The company reaffirmed its full-year guidance despite a 5.4% revenue decline to $1.04 billion and a 14.5% drop in EPS to $0.47. Analysts noted mixed performance, with emerging markets and Travel Retail offsetting weaker U.S. and developed international results.

Revenue

Brown-Forman B’s total revenue fell 5.4% to $1.04 billion in Q2 2026, driven by a 60% decline in used barrel sales and Canadian market challenges. Whiskey remained the largest contributor at $771 million, supported by U.S. distributor transitions and the Blackberry launch. Ready-to-Drink (RTD) revenue rose 5% to $138 million, led by Mexico’s New Mix growth, while Tequila sales dipped 3% to $67 million due to competitive pressures. Non-branded and bulk sales plummeted 61% to $8 million, and the rest of the portfolio added $52 million.

Earnings/Net Income

The company’s EPS declined 14.5% to $0.47, missing the Zacks Consensus Estimate of $0.48, while net income fell 13.2% to $224 million. Despite these declines, Brown-Forman has maintained profitability for over two decades, reflecting operational resilience. The EPS decline reflects ongoing operational challenges, though the company maintains long-term profitability resilience.

Price Action

BF.B shares edged down 2.61% in the latest trading day but gained 7.88% month-to-date.

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, underperforming the benchmark’s 27.97%. The strategy’s Sharpe ratio of -1.60 highlights significant risk aversion, while a 0% maximum drawdown suggests losses were minimized during market downturns.

CEO Commentary

CEO Lawson Whiting emphasized innovation, U.S. distributor transitions, and workforce restructuring as strategic priorities. He highlighted strong performance in Mexico and Brazil, despite macroeconomic pressures in developed markets.

Guidance

Brown-Forman reaffirmed its fiscal 2026 guidance: organic net sales decline in the low-single-digit range and gross margin expansion. Capital expenditures were revised down to $110–$120 million.

Additional News

The company announced a $400 million share repurchase program and a 2% dividend increase, marking 42 consecutive years of raises. CFO succession plans are underway, with no immediate changes expected. Meanwhile, the Blackberry launch exceeded expectations, driving U.S. and international growth.

The board also approved a 2% dividend hike, underscoring confidence in long-term stability. Analysts remain cautious about macroeconomic headwinds but acknowledge the company’s resilience in emerging markets.

Conclusion

Brown-Forman’s Q2 results reflect a challenging environment, with strategic initiatives and innovation offsetting key headwinds. While near-term challenges persist, the company’s long-term brand strength and disciplined execution provide a foundation for recovery.