Brown-Forman A 2026 Q2 Earnings Revenue Falls 5.4%, Net Income Drops 13.2%

Brown-Forman A reported Q2 2026 earnings on Dec 4, 2025, with revenue declining 5.4% to $1.04 billion and net income falling 13.2% to $224 million. The company reaffirmed fiscal 2026 guidance despite macroeconomic headwinds and mixed market performance.

Revenue

Brown-Forman A’s Q2 2026 revenue totaled $1.04 billion, a 5.4% decline from $1.09 billion in the prior year. Whiskey remained the largest contributor at $771 million, while Ready-to-Drink and Tequila segments generated $138 million and $67 million, respectively. Non-branded and bulk sales contributed $8 million, and the rest of the portfolio added $52 million. The revenue decline reflected challenges in U.S. and developed international markets, partially offset by growth in emerging markets and Travel Retail.

Earnings/Net Income

The company’s EPS fell 14.5% to $0.47 in Q2 2026, below the Zacks Consensus Estimate of $0.48. Net income declined to $224 million, a 13.2% drop year-over-year. The earnings decline, driven by higher costs and weaker sales, underscores the impact of macroeconomic pressures on the spirits sector.

Post-Earnings Price Action Review

A 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 of -1.63 highlighted substantial risk aversion, while the maximum drawdown of 0% indicated minimal losses during market downturns.

CEO Commentary

CEO Lawson Whiting emphasized resilience amid a challenging operating environment, noting strong cash flow generation ($292 million in operating cash flow, $236 million in free cash flow) and strategic initiatives like a $400 million share repurchase program. He cited declines in U.S. and developed international markets due to the end of the Korbel relationship and reduced Canadian retail availability, while emerging markets and Travel Retail showed growth.

Guidance

Brown-Forman reaffirmed fiscal 2026 guidance: organic net sales decline in the low-single-digit range, organic operating income decline in the low-single-digit range, and an effective tax rate of 21%-23%. Capital expenditures were revised to $110-$120 million. The company remains focused on U.S. distribution evolution, restructuring, and product innovation to navigate macroeconomic volatility.

Additional News

1. C-Level Activity: CEO Lawson Whiting filed to sell 42,495 shares of BF.A via a prearranged trading plan, executed through Raymond James & Associates.

2. Buyback Program: The company announced a $400 million share repurchase program, reflecting confidence in long-term value.

3. Restructuring Efforts: Brown-Forman highlighted ongoing restructuring to reduce costs and streamline operations, aligning with its fiscal 2026 strategy.