Brown-Forman B 2026 Q2 Earnings Misses Estimates as Net Income Falls 13%

Brown-Forman B (BF.B) reported Q2 2026 earnings that missed expectations, with diluted EPS declining 14.5% to $0.47 and net income falling 13.2% to $224 million. The company reaffirmed full-year guidance despite the results, citing resilience in emerging markets and strategic initiatives to offset cyclical headwinds.

Revenue

Brown-Forman B’s total revenue declined 5.4% year-over-year to $1.04 billion, driven by weaker performance in developed markets and the U.S. Spirits revenue led the portfolio at $838 million, with Whiskey contributing $771 million. Ready-to-Drink (RTD) sales grew 5% to $138 million, while Tequila revenue fell 3% to $67 million. Non-branded and bulk sales plummeted 61% to $8 million due to soft used barrel demand. Emerging markets and Travel Retail offset declines, with Emerging markets growing 12% organically and Travel Retail rising 6% organically.

Earnings/Net Income

The company’s EPS dropped 14.5% to $0.47, missing the consensus estimate of $0.48, while net income fell 13.2% to $224 million. Despite the decline, Brown-Forman maintained profitability for over 20 consecutive years, reflecting operational resilience amid market challenges.

Price Action

BF.B’s stock price fell 2.61% in the latest trading day but gained 7.88% month-to-date.

Post-Earnings Price Action Review

A strategy of buying BF.B after earnings beats and selling after 30 days underperformed the benchmark, delivering a -25.11% return versus 27.97%. The Sharpe ratio of -1.60 highlighted significant risk aversion, though the maximum drawdown of 0% indicated minimal losses during downturns.

CEO Commentary

CEO Lawson Whiting emphasized resilience in emerging markets and innovation, citing the successful launch of Jack Daniel’s Tennessee Blackberry. Challenges included U.S.-Canada trade disputes and used barrel sales declines, but he expressed confidence in long-term growth through premiumization and operational efficiency.

Guidance

Brown-Forman reaffirmed full-year 2026 guidance: low-single-digit organic net sales decline, gross margin expansion, and diluted EPS of $0.47. CapEx was revised downward to $110–$120 million.

Additional News

The company’s Board approved a 2% dividend increase, marking 42 consecutive years of hikes, and authorized a $400 million share repurchase program. CFO Leanne Cunningham announced a succession process extending into early 2026. Meanwhile, U.S. distributor transitions and emerging market growth were highlighted as key drivers for future performance.