Brown-Forman A 2026 Q2 Earnings Net Income Falls 13.2% Despite Resilient Performance

Brown-Forman A (BF.A) reported fiscal 2026 Q2 earnings on Dec 4, 2025, with results reflecting a challenging operating environment. The company’s revenue fell short of expectations, while earnings declined year-over-year. Despite reaffirming fiscal 2026 guidance, the report highlighted ongoing headwinds from macroeconomic uncertainties and shifting consumer demand.

Revenue

The total revenue of Brown-Forman A decreased by 5.4% to $1.04 billion in 2026 Q2, down from $1.09 billion in 2025 Q2. Spirits led the portfolio with $838 million in revenue, while Whiskey contributed $771 million. Tequila and Ready-to-Drink segments added $67 million and $138 million, respectively, with Non-branded and bulk at $8 million and the rest of the portfolio at $52 million.

Earnings/Net Income

Brown-Forman A's EPS declined 14.5% to $0.47 in 2026 Q2 from $0.55 in 2025 Q2. Meanwhile, the company's net income declined to $224 million in 2026 Q2, down 13.2% from $258 million reported in 2025 Q2. The EPS decline indicates challenges in maintaining profitability amid external pressures.

Price Action

The stock price of Brown-Forman A has edged up 0.14% during the latest trading day, has climbed 4.38% during the most recent full trading week, and has jumped 8.60% month-to-date.

Post-Earnings Price Action Review

The strategy of buying BF.A when earnings beat expectations and holding for 30 days resulted in a -25.49% return, significantly underperforming the benchmark return of 27.97%. The strategy's Sharpe ratio was -1.63, indicating substantial risk aversion, while the maximum drawdown was 0%, suggesting the strategy minimized losses during market downturns.

CEO Commentary

Lawson Whiting, President and Chief Executive Officer, highlighted that Q2 results reflected sustained challenges in the operating environment, with first-half performance aligning with expectations. He emphasized the team’s resilience amid headwinds, including the end of the Korbel relationship and reduced volumes for Jack Daniel’s Tennessee Whiskey and Herradura. Strategic priorities included evolving U.S. distribution, restructuring initiatives, and product innovation. Whiting expressed cautious optimism, stating the company’s ability to execute plans and reaffirmed fiscal 2026 guidance despite macroeconomic uncertainties.

Guidance

Brown-Forman reaffirmed fiscal 2026 guidance, projecting organic net sales and operating income declines in the low-single-digit range, with an effective tax rate of 21-23%. Capital expenditures were revised to $110-120 million (from $125-135 million). The company anticipates continued challenges from consumer uncertainty, lower non-branded sales, and macroeconomic/geopolitical volatility but remains focused on long-term growth through distribution evolution, restructuring, and innovation.

Additional News

Brown-Forman’s CEO, Lawson Whiting, filed to sell 42,495 shares of restricted stock via a prearranged trading plan, signaling potential liquidity needs. The company also announced a $400 million share repurchase program, underscoring confidence in its long-term value. Meanwhile, the board increased the quarterly dividend for the 42nd consecutive year, highlighting its commitment to shareholder returns.