Brown‑Forman Corporation (NYSE: BFA, BFB) reported financial results for its fourth quarter and fiscal year ended April 30, 2026. Fourth quarter reported net sales increased 2%1 to $912 million (+2% on an organic basis2) compared to the same prior-year period. In the quarter, reported operating income decreased 53% to $96 million (flat on an organic basis) and diluted earnings per share decreased 62% to $0.12.
For the full year, the company’s reported net sales decreased 1% to $3.9 billion (flat on an organic basis) compared to the same prior-year period. Reported operating income decreased 10% to $1.0 billion (-2% on an organic basis) and diluted earnings per share decreased 17% to $1.53.
“We finished the fiscal year ahead of our expectations, driven by strong execution in our innovation portfolio, the early benefits of our U.S. route-to-market transformation, and strategic cost-restructuring initiatives,” President and Chief Executive Officer Lawson Whiting said in a news release. “Our ability to grow cash flows from operations and free cash flow by more than $400 million in a declining market speaks to the strength of our business and our commitment to a robust capital allocation strategy. While we expect continued market volatility and a challenging cost cycle in the year ahead, our performance this year proves we have the right people, brands, and strategy to navigate these challenges effectively.”
Fiscal 2026 Highlights
The net sales decline was led by the end of the Korbel Champagne Cellars relationship (Korbel relationship) and the absence of the Sonoma‑Cutrer prior-year transition services agreement (TSA), partially offset by the launch of Jack Daniel’s Tennessee Blackberry.
From a geographic perspective, net sales growth in Emerging markets and the Travel Retail channel was partially offset by a decline in the United States, and Developed International markets were flat.
Gross margin expanded 160 basis points driven by the positive effect of acquisitions and divestitures.
Cash flows from operations grew by $402 million to $1.0 billion and free cash flow increased by $462 million to $893 million.
The company returned $827 million to stockholders by distributing $427 million in regular quarterly dividends and $400 million through its share repurchase program.
Fiscal 2026 Brand Results
Net sales for Whiskeyproducts increased 3% (+1% organic) driven by the launch of Jack Daniel’s Tennessee Blackberry, the positive effect of foreign exchange, and the growth of Woodford Reserve in the United States, partially offset by declines of Jack Daniel’s Tennessee Whiskey.
Net sales for the Tequila portfolio decreased 4% (-6% organic). Herradura’s net sales declined 9% (-10% organic) led by lower volumes in the United States. el Jimador’s net sales decreased 2% (-2% organic) driven by declines in the United States and Mexico, partially offset by higher volumes in Colombia.
Net sales for the Ready-to-Drink (RTD) portfolio increased 11% (+7% organic). Net sales of New Mix increased 41% (+33% organic) fueled by market share gains in Mexico within an accelerating category and the product’s launch in the United States. Jack Daniel’s RTD/RTP portfolio decreased 3% (-5% organic) driven by declines in the United States and the absence of American-made beverage alcohol from retail shelves across most provinces in Canada.
Rest of Portfolio’s net sales declined 31% (+18% organic) driven by the unfavorable impact of acquisitions and divestitures, partially offset by the distribution of new agency brands in Japan and Mexico, as well as strong double-digit growth of Gin Mare and Diplomático.
Net sales for non-branded and bulk decreased 68% (-68% organic) driven by lower used barrel sales.
Fiscal 2026 Market Results
Net sales in the United States declined 7% (flat organic) driven by the end of the Korbel relationship and the absence of the Sonoma‑Cutrer prior-year TSA, as well as lower volumes of Jack Daniel’s Tennessee Whiskey and unfavorable portfolio mix, partially offset by innovation, led by Jack Daniel’s Tennessee Blackberry and growth of Woodford Reserve. Higher net pricing across the portfolio as a result of changes to our distributor relationship terms and favorable timing of distributor ordering patterns positively impacted net sales.
In a challenging economic environment, net sales in the Developed International markets were flat (-3% organic). The positive effect of foreign exchange and the benefit from the transition to owned distribution in Italy was offset by the absence of American-made beverage alcohol from retail shelves in most of the Canadian provinces and declines in Germany and the United Kingdom.
Net sales in Emergingmarkets increased 14% (+12% organic) driven by growth across the Jack Daniel’s family of brands led by Türkiye, the United Arab Emirates, and Brazil, strong double-digit growth of New Mix in Mexico, an estimated net increase in distributor inventories, and the positive effect of foreign exchange.
The Travel Retail channel’s net sales increased 6% (+5% organic) largely due to increased passenger traffic leading to higher volumes of Jack Daniel’s Tennessee Whiskey as well as the positive effect of foreign exchange.
Fiscal 2026 Other P&L Items
Gross profit increased 2% (flat organic). Gross margin expanded 160 basis points to 60.5% driven by the positive effect of acquisitions and divestitures, the positive effect of foreign exchange, and lower costs influenced by the timing of cost fluctuations.
Advertising expense decreased 4% (-5% organic) driven by lower spend across the Jack Daniel’s family of brands, led by super-premium Jack Daniel’s expressions, and the end of the Korbel relationship, partially offset by the negative effect of foreign exchange.
Selling, general, and administrative (SG&A) expenses increased 9% (+7% organic) driven by costs associated with the contemplated business transaction discussions, higher compensation-and-benefit-related expenses, and the negative effect of foreign exchange.
The company incurred $19 million in charges related to the strategic restructuring initiative announced in January 2025.
Operating income decreased 10% (-2% organic) resulting in an operating margin decrease of 240 basis points to 25.5%. The operating margin decrease was driven by higher non-cash impairment charges and higher SG&A expenses, partially offset by lower restructuring initiative costs compared to the same prior-year period.
Diluted earnings per share decreased $0.31 driven by lower operating income and the absence of the prior-year gain on sale of our investment in The Duckhorn Portfolio, Inc.
Fiscal 2026 Financial Stewardship
During fiscal 2026, the company paid $427 million to stockholders through its regular quarterly dividend and returned $400 million to stockholders through its share repurchase program, which was completed in December 2025. Brown‑Forman, a member of the S&P 500 Dividend Aristocrats Index, has paid regular quarterly cash dividends for 82 consecutive years and has increased the regular dividend for 42 consecutive years.
In addition, cash flows from operations grew $402 million to $1.0 billion, primarily reflecting disciplined working capital management, and free cash flow increased $462 million to $893 million, driven by strong operating cash flow generation and lower capital expenditure needs.
Fiscal 2027 Outlook
“We anticipate the operating environment for fiscal 2027 to remain challenging, as macroeconomic pressures and geopolitical instability continue to negatively impact consumer behavior and beverage alcohol consumption, particularly within developed markets,” the company said in a statement.” We remain committed to building our business for the long term while focusing intensely on the variables within our control. We believe we will benefit in fiscal 2027 from our previously announced restructuring initiative and U.S. distributor changes, and continued new product innovation, such as the expansion of Jack Daniel’s Tennessee Blackberry.”
Considering these factors, Brown-Forman expects the following in fiscal 2027:
Organic net sales to be approximately flat.
Organic operating income decline in the 3% to 5% range.
Our effective tax rate to be in the range of approximately 20% to 22%.
Capital expenditures planned to be in the range of $60 to $70 million.
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