Key Takeaways Brown-Forman posted lower EPS and sales, with revenues beating estimates year over year.BF.B saw mixed market performance, with U.S. and Developed International declines.Brown-Forman raised its dividend and reaffirmed guidance amid a tough backdrop.Brown-Forman Corporation (BF.B) has reported mixed second-quarter fiscal 2026 results, wherein the top line beat the Zacks Consensus Estimate, while the bottom line missed the same. Both sales and earnings declined year over year. The fiscal second- ...

Core Insights - Brown-Forman Corporation (BF.B) reported mixed first-quarter fiscal 2026 results, with net sales exceeding estimates but earnings per share (EPS) falling short [1][3][6] - The company has taken decisive actions to strengthen its business amid challenging conditions, focusing on innovation and consumer strategies to maintain growth [1][2][19] Financial Performance - EPS for the fiscal first quarter was 36 cents, down 13% year over year, missing the Zacks Consensus Estimate of 37 cents [3][6] - Net sales reached $924 million, a 3% decline year over year, but surpassed the Zacks Consensus Estimate of $911 million; on an organic basis, net sales increased by 1% [3][6] - Gross profit was $552 million, a 2% decline year over year, while gross margin improved by 40 basis points to 59.8% due to acquisitions and divestitures [4][6] - Operating income decreased by 7% year over year to $260 million, with an operating margin of 28.2%, down 140 basis points from the previous year [8] Market Performance - In the U.S., net sales fell 8% year over year, impacted by the absence of the prior-year Sonoma-Cutrer TSA and lower volumes of key brands [9] - Developed international markets saw an 8% decline in net sales, primarily due to reduced demand and geopolitical pressures [10] - Emerging markets experienced a 20% increase in net sales, driven by strong growth in the Jack Daniel's brand, particularly in Brazil and Türkiye [11] - The Travel Retail channel reported an 8% increase in net sales, supported by higher volumes of Jack Daniel's Tennessee Whiskey [12] Brand Performance - Whiskey product sales remained flat year over year, with strong initial shipments of Jack Daniel's Tennessee Blackberry offset by declines in other key products [13] - Tequila portfolio sales fell 1% year over year, with Herradura brand sales dropping significantly, while el Jimador saw a 14% increase [14] - The Ready-to-Drink (RTD) category grew by 6% year over year, with New Mix experiencing a notable 26% increase [15] - The rest of the portfolio saw a significant decline of 27% year over year, largely due to the absence of Sonoma-Cutrer and Finlandia TSAs [16] Financial Health - As of the end of the first quarter, the company had cash and cash equivalents of $471 million and long-term debt of $2.1 billion, with total shareholders' equity at $3.99 billion [17] Outlook - For fiscal 2026, the company anticipates continued challenges due to macroeconomic and geopolitical volatility, projecting a low-single digit decline in organic net sales and operating income [18][20]