Brown-Forman projects 3% to 5% decline in organic operating income
Brown-Forman, the maker of Jack Daniel’s, reported quarterly earnings of 38 cents a share, exceeding the 37-cent estimate compiled by FactSet.
Net sales fell 1% in the most recent quarter. The company identified the end of its Korbel California Champagne relationship, lower tequila sales and declines in used barrel sales as the drivers of the decrease.
The company’s tequila products, including Herradura and el Jimador, recorded a 12% decline in net sales. Brown-Forman attributed the category’s decline to lower sales in the U.S. and lower pricing.
Brown-Forman’s shares gained 1.4% in premarket trading.
The company continued to project little change in organic net sales for its 2027 fiscal year. That outlook also included a projected 3% to 5% decline in organic operating income.
The results came as The Wall Street Journal described the U.S. alcohol industry as struggling through a yearslong slump. The report said consumers’ budgets were tighter and many were forgoing beer, wine and spirits for health reasons or choosing cannabis.
The latest report combined a per-share earnings beat with weaker net sales, a 12% drop in tequila net sales and a 2027 outlook that left organic net sales projected to remain little changed while organic operating income was expected to decline.