Brown-Forman reports 3% Q1 sales decline amid U.S. weakness, transition agreement absence
The spirits giant saw growth in emerging markets offset by U.S. and developed market declines during the first quarter of fiscal 2026.
USA – Jack Daniel’s maker Brown-Forman has reported a 3% decline in net sales to US$924 million for the first quarter of fiscal 2026, ended July 31, 2025.
The decline was largely attributed to the absence of the prior-year transition services agreement (TSA) related to Sonoma-Cutrer.
Operating income for the quarter dropped 7% to US$260 million, while diluted earnings per share fell 13% to US$0.36.
“Our solid first-quarter performance reflects the decisive actions we’ve taken to strengthen our business in a challenging environment,” said Lawson Whiting, President and Chief Executive Officer of Brown-Forman.
“Superior innovation and bold route-to-consumer strategies, in particular, have positioned us to deliver resilient results in the face of persistent headwinds. We are pleased to reaffirm our full-year outlook and remain confident in our ability to create long-term value for shareholders.”
From a regional perspective, growth in emerging markets and the Travel Retail channel was more than offset by declines in the United States and Developed International markets.
In the United States, net sales decreased 8% due to the absence of the Sonoma-Cutrer TSA, lower volumes of Jack Daniel’s Tennessee Whiskey and Herradura, and the end of the Korbel Champagne Cellars relationship.
These declines were partially offset by strong initial shipments of Jack Daniel’s Tennessee Blackberry ahead of its launch and in preparation for the August 1, 2025 distributor transitions.
In Developed International markets, net sales declined 8% as soft consumer demand was affected by macroeconomic and geopolitical uncertainty.
Conversely, emerging markets posted a 20% increase in net sales, driven by higher volumes across the Jack Daniel’s family of brands, particularly in Brazil and Türkiye, along with higher distributor inventories.
By category, whiskey sales were flat as gains from Jack Daniel’s Tennessee Blackberry and Jack Daniel’s Tennessee Apple in Brazil balanced other declines. The tequila portfolio saw a 1% dip in sales, while the Ready-to-Drink (RTD) portfolio grew 6%. The
Rest of Portfolio’s net sales decreased 27% (+17% organic) due to the absence of prior-year TSAs for Sonoma-Cutrer and Finlandia, as well as the conclusion of the Korbel relationship.
Following the earnings results, Brown-Forman’s Board of Directors declared a regular quarterly cash dividend of US$0.2265 per share on both its Class A and Class B common stock.
Looking ahead, the company expects fiscal 2026 to remain challenging amid consumer uncertainty, potential tariffs, and lower non-branded barrel sales.
Brown-Forman said it will continue pursuing long-term growth through U.S. distribution changes, restructuring initiatives, and new product innovation.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
