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- **Emerging Market Growth**: 12% organic growth in Mexico, Brazil, and Travel Retail offset developed market declines.
- **Blackberry Success**: Jack Daniel's Tennessee Blackberry exceeded expectations, driving 18% RTD growth in Mexico and strong international launches.
- **Headwinds**: 61% used barrel sales decline and 60% Canada sales drop constrain top line.
- **Gross Margin Expansion**: 30bps expansion from A&D benefits, despite cost/mix headwinds.
- **Strategic Initiatives**: Distributor transitions, workforce restructuring, and innovation (Blackberry) positioning for long-term growth.

**【CEO Summary Section】**
- **Global Performance**: Organic net sales were flat in the first half, driven by 12% growth in emerging markets (Mexico, Brazil) and 6% growth in Travel Retail, offsetting a 6% decline in developed international markets and flat U.S. performance.
- **Strategic Innovations**: Jack Daniel's Tennessee Blackberry exceeded expectations, with shipments exceeding depletions and strong international launches in the U.K., Germany, and France. New Mix (tequila-based RTD) contributed 18% organic growth in Mexico.
- **Headwinds**: Used barrel sales declined 61%, and Canada's organic sales dropped 60% due to U.S. spirits being off-shelf in most provinces.
- **U.S. Distributor Changes**: Transition to new distributors in 13 markets (effective August 1) is complete, with improved focus and investment from partners. Organic net sales closed the gap to total distilled spirits (TDS) in the U.S., with depletion-based results +3% vs. TDS takeaway -3%.

**【CFO Financial Commentary】**
- **Gross Margin**: Reported gross margin expanded 30bps to 59.5%, driven by $190m A&D benefit (Korbel divestiture, Sonoma-Cutrer TSA end) offsetting $160m headwinds from lower production, inflation, and RTD mix.
- **Operating Expenses**: Organic A&P down 1% (aligned with depletion-based sales), organic SG&A down 4% due to workforce restructuring. Full-year outlook for organic operating income: low single-digit decline.
- **Cash Flow**: Free cash flow +179% to $236m, driven by lower CapEx ($110-120m vs. prior $125-135m) and working capital management. Dividend increased 2%, with $99m share buybacks under $400m authorization.
- **Full Year Guidance**: Reaffirmed low single-digit organic decline, with gross margin expansion from A&D benefits offsetting cost/mix headwinds.

**【Q&A Highlights】**
- **Holiday Season**: Distributors are focused on Jack Daniel's Blackberry and Tennessee Honey/Fire/Applie, with cautious consumer behavior in U.S. and Europe. Teams are prepared for seasonality post-transition.
- **Consumer Trends**: U.S. TDS takeaway down low single-digit, with trade-down to $10-30 price points. Global Travel Retail passenger traffic exceeds pre-pandemic levels.
- **Pricing Strategy**: U.S. pricing down 0.3%, with rational industry behavior. Focus on protecting margins while supporting innovation.
- **Blackberry Launch**: International launches in 8 markets (U.K., Germany, France, GTR) show strong trade/consumer feedback. U.S. shipments/depletions gap narrowing as launch matures.
- **Cost Savings**: SG&A savings moderating as 2025 workforce restructuring benefits lap. Continued focus on controlling controllable expenses.


Brown-Forman Corporation (BF.B) Q2 2026 Earnings Call Transcript

- **Emerging Market Growth**: 25% Travel Retail expansion and 30% Brazil growth highlight strategic success in Mexico and Brazil.
- **Challenges**: U.S. distributor transitions and Canada trade issues caused 60% sales decline, offset by 40bps gross margin expansion.
- **Innovation Momentum**: Jack Daniel's Blackberry launch exceeded expectations, with global expansion plans.
- **Financial Resilience**: Reaffirmed guidance with low single-digit sales decline and gross margin expansion despite industry headwinds.

**【CEO Summary Section】**
- **Organic Sales Growth**: 1% YoY, driven by emerging markets (25% in Travel Retail, 30% in Brazil) despite a 9% decline in developed international markets and a 2% drop in the U.S.
- **Emerging Markets Success**: Mexico (+22%) and Brazil (Jack Daniel's expansion) outperformed, while Europe faced economic challenges but saw premiumization gains.
- **Challenges**: U.S. distributor transitions and used barrel sales decline (-40%) impacted results. Canada sales (-60%) due to U.S.-Canada trade issues.
- **Strategic Innovations**: Launch of Jack Daniel's Tennessee Blackberry, gaining distributor support and consumer buzz. Global expansion plans for flavored whiskies.
- **Distributor Transitions**: U.S. distributor headcount increased 3x, with updated terms to improve focus and coverage.

**【CFO Financial Commentary】**
- **Gross Margin Expansion**: 40bps to 59.8%, driven by A&D benefits (+240bps) offsetting cost inflation and lower production volumes.
- **Operating Expenses**: Organic A&P down 3%, SG&A down 7% due to workforce restructuring. Full-year organic operating income expected to decline low single-digit.
- **Full Year Outlook**: Reaffirmed guidance with low single-digit organic sales decline, gross margin expansion, and EBIT margin contraction due to headwinds.
- **Cash Flow Focus**: Reducing finished goods inventory to improve cash generation.

**【Q&A Highlights】**
- **U.S. Market Trends**: Cyclical vs. structural decline debate; executives attribute 80% to consumer uncertainty, 20% to structural shifts. Blackberry launch expected to drive momentum post-Q1.
- **Competitive Environment**: Rational pricing in American whiskey, with premiumization trends offsetting volume declines.
- **Canada Impact**: Ongoing U.S. product bans expected to persist, impacting full-year results.
- **Gross Margin Drivers**: Input cost inflation and lower production volumes offset by A&D benefits and Blackberry growth.

Brown-Forman Corporation (BF.B) Q1 2026 Earnings Call Transcript

- **Organic Growth Resilience**: 1% organic net sales growth in FY25, driven by premium brands like Woodford Reserve (+8%) and New Mix's Mexico expansion.
- **Strategic Initiatives Paying Off**: $70-80M annual savings from workforce restructuring, offsetting macroeconomic headwinds.
- **FY26 Challenges**: Low single-digit sales decline expected, with used barrel sales dropping >50% and tariffs creating uncertainty.
- **Brand Innovation**: Jack Daniel's Tennessee Blackberry launch and New Mix U.S. expansion targeting Hispanic consumers.
- **Cyclical vs. Structural Debate**: CEO cites spirits' premiumization trend (+$40+ tier gaining share) as evidence of cyclical rather than structural decline.

**【CEO Summary Section】**
- **Organic Net Sales Growth**: Despite a 5% reported revenue decline, organic net sales rose 1% in FY25, driven by Woodford Reserve (+8%), New Mix (double-digit growth in Mexico), and Jack Daniel's Tennessee Whiskey (+1%).
- **Brand Highlights**: Woodford Reserve expanded internationally, Jack Daniel's launched Tennessee Blackberry, and New Mix introduced flavors in the U.S. for the Hispanic market.
- **Challenges**: Korbel and Tequila brands faced headwinds due to macroeconomic pressures, with El Jimador and Herradura declining double-digits in the U.S. and Mexico.
- **Strategic Initiatives**: Workforce reduction and cooperage closure to save $70-80M annually, with $63M in restructuring charges.

**【CFO Financial Commentary】**
- **Financial Performance**: GAAP net income of $420M, non-GAAP EPS of $1.84 (down 14% YoY). Organic operating income grew 3% despite macro challenges.
- **Geographic Growth**: Emerging markets (Turkey, Brazil) delivered 9% organic growth, while developed markets (Italy, U.K.) declined 3% due to macroeconomic uncertainty.
- **Used Barrel Sales**: Contributed significantly to FY25 growth but expected to drop >50% in FY26, creating a major headwind.
- **FY26 Outlook**: Low single-digit organic net sales decline, with operating income down low single-digits, driven by used barrel sales decline and macroeconomic headwinds.

**【Q&A Key Takeaways】**
- **Consumer Sentiment**: Cyclical rather than structural weakness, with spirits taking share from beer and wine. U.S. TDS down 3% but premium tiers (+$40+) gaining share.
- **Pricing Strategy**: Maintaining low single-digit price/mix growth, with rational pricing from major whiskey competitors.
- **International Risks**: Tariffs and geopolitical uncertainty in Europe, Canada (American spirits off-shelf), and Mexico's economic slowdown.
- **Brand Resilience**: Jack Daniel's brand health improving with new campaigns, despite macro challenges.

Brown-Forman Corporation (BF.B) Q4 2025 Earnings Call Transcript

Brown-Forman Corporation (BF.B) Q2 2025 Earnings Call Transcript

Brown-Forman Corporation (BF.B) Q1 2025 Earnings Call Transcript

Brown-Forman Corporation (BF.B) Q4 2024 Earnings Call Transcript

Brown-Forman Corporation (BF.B) Q3 2024 Earnings Call Transcript

- **Revenue Resilience**: 1% organic growth in H1 vs. 17% prior year, driven by premium innovations like Jack Daniel’s Apple (+50%) and Glenglassaugh cask sales.
- **Portfolio Expansion**: Diplomático and Gin Mare add 2% to sales; Sonoma-Cutrer divestiture enables wine category focus.
- **Gross Margin Recovery**: 280bps expansion from price/mix and cost normalization, offsetting input cost headwinds.
- **U.S. Market Caution**: TDS growth slows to low single digits; Jack Daniel’s Tennessee Whiskey lapping 18% prior-year growth.
- **Tariff Stability**: EU whiskey tariffs suspended; no incremental risk to shipments.
- **2024 Outlook**: 3-5% organic growth, 4-6% operating income expansion, supported by pricing and acquisitions.


**【CEO Summary Section】**
- **Revenue Growth**: Organic net sales grew 1% in the first half, despite a 17% year-over-year increase in the prior period. Key drivers included Jack Daniel’s Tennessee Apple (+50%), New Mix (+22%), and Glenglassaugh, which contributed 3% of organic growth through rare cask sales.
- **Portfolio Strategy**: Acquisitions of Diplomático and Gin Mare added 2 percentage points to reported net sales. Divestiture of Sonoma-Cutrer aligns with long-term value creation, with equity stake in Duckhorn Portfolio for wine category growth.
- **Gross Margin Expansion**: 280 basis points of gross margin improvement driven by favorable price/mix, absence of supply chain costs, and tariff removal, offsetting higher input costs.
- **Operating Expenses**: Organic advertising up 12% in H1, moderating in Q2. SG&A growth due to compensation and distribution transitions.
- **Tariff Update**: EU whiskey tariffs remain suspended; ongoing negotiations with U.S. to avoid reinstatement.

**【CFO Financial Commentary】**
- **Financial Highlights**: Reported net sales +2%, operating income +1%. Diluted EPS $0.98 (-1% YoY) due to higher interest expenses.
- **Market Performance**: Emerging markets (double-digit growth) outperformed developed markets (-2%). U.S. down 5% due to distributor inventory normalization.
- **Outlook**: Fiscal 2024 organic net sales growth 3-5%, driven by pricing strategy, new acquisitions, and gross margin recovery. Operating income growth 4-6%.
- **Share Repurchase**: $400M program completed over half; 6% dividend increase maintained.

**【Q&A Key Themes】**
- **U.S. Market Concerns**: TDS growth slowed to low single digits, impacting consumer confidence. Jack Daniel’s Tennessee Whiskey lapping high prior-year volumes.
- **Tariff Risks**: No incremental shipments to Europe; tariffs expected to remain suspended.
- **Latin America**: Brazil growth (+high single-digit) driven by Jack Daniel’s Apple; Mexico cautious due to tequila/whiskey category slowdown.
- **Divestiture Impact**: Finlandia sale accretive by $0.12 EPS, excluding organic guidance.
- **Tariffs & Input Costs**: Agave prices declining but lagging in COGS; supply chain costs normalized.


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