Brown‑Forman Corporation (NYSE: BFA, BFB) reported financial results for its first quarter of fiscal 2027, ended July 31, 2026, with reported net sales decreasing 1% to $911 million (-1% on an organic basis) compared to the same prior-year period. Reported operating income decreased 3% to $252 million (+4% on an organic basis) and diluted earnings per share increased 6% to $0.38.

“Our first quarter results were largely in line with our expectations and reinforce our confidence in the year ahead,” Lawson Whiting, President and Chief Executive Officer, said in a news release. “Innovation remains an important growth driver. Momentum from New Mix, our Ready-to-Drink portfolio, and Jack Daniel’s Tennessee Blackberry helped offset pressures elsewhere in the business and demonstrates our ability to create new opportunities for growth even in a challenging operating environment.”

First Quarter of Fiscal 2027 Highlights

Net sales declines were driven by the end of the Korbel relationship, as well as declines in used barrel sales and our tequila portfolio, partially offset by the growth of the Ready-to-Drink portfolio, led by New Mix.

From a geographic perspective, net sales declines in Developed International markets and the United States were partially offset by growth in Emerging markets.

Gross margin expanded 40 basis points driven by lower costs, partially offset by the negative effect of foreign exchange.

Cash flows from operations grew by $13 million to $173 million and free cash flow increased by $32 million to $161 million.

 First Quarter of Fiscal 2027 Brand Results

Net sales for Whiskey products were flat (flat organic) as the continued international launch of Jack Daniel’s Tennessee Blackberry was offset by declines of Jack Daniel’s Tennessee Honey and Gentleman Jack, while Jack Daniel’s Tennessee Whiskey was flat.

Net sales for the Ready-to-Drink portfolio increased 20% (+11% organic) driven by New Mix, which increased 48% (+36% organic) fueled by strong consumer demand in Mexico, the positive effect of foreign exchange, and the product’s launch in the United States.

Net sales for the Tequila portfolio decreased 12% (-13% organic). Herradura’s net sales declined 17% (-18% organic) driven by lower volumes in the United States and lower net pricing in Mexico. el Jimador’s net sales declined 10% (-11% organic) driven by lower net pricing in the United States.

Rest of Portfolio’s net sales declined 35% (-12% organic) driven by the end of the Korbel relationship.

Net sales for non-branded and bulk decreased 61% (-61% organic) driven by lower used barrel sales.

First Quarter of Fiscal 2027 Market Results                                                                                                                                                                                             

Net sales in the United States declined 3% (flat organic) driven by the end of the Korbel relationship, an estimated net decrease in distributor inventories reflecting prior-year distributor transitions, and lower volumes of Jack Daniel’s Tennessee Blackberry. These decreases were partially offset by higher volumes of Jack Daniel’s Tennessee Whiskey and the impact of the JDCC transition.

Net sales in Developed International markets declined 6% (-8% organic) driven by lower volumes of Jack Daniel’s Tennessee Whiskey in Germany, France, and Spain.

Net sales in Emergingmarkets increased 11% (+9% organic) driven by Mexico, fueled by the double-digit growth of New Mix.

The Travel Retail’s net sales declined 1% (-1% organic), as the channel was impacted by the Middle East geopolitical headwinds. The decline was primarily driven by lower volumes of Gin Mare, partially offset by the launch of Jack Daniel’s Tennessee Blackberry.

First Quarter of Fiscal 2027 Other P&L Items

Gross profit decreased 1% (+1% organic). Gross margin expanded 40 basis points to 60.2% driven by lower costs and the end of the Korbel relationship, partially offset by the negative effect of foreign exchange and unfavorable price/mix.

Advertising expense decreased 5% (-4% organic) driven by the timing of spend across the Jack Daniel’s family of brands, as declines in spending for Jack Daniel’s Tennessee Whiskey more than offset the increased investment for the continued international launch of Jack Daniel’s Tennessee Blackberry.

Selling, general, and administrative (SG&A) expenses increased 4% (+5% organic) driven by the timing of costs related to targeted organizational realignments.

Operating income decreased 3% (+4% organic) resulting in an operating margin decrease of 50 basis points to 27.7%. The operating margin decrease was primarily due to higher operating expenses, partially offset by gross margin expansion.

Diluted earnings per share increased $0.02 driven by the lower non-operating postretirement expense and the accretive impact from share repurchases executed in the prior year, partially offset by the decrease in operating income.

First Quarter of Fiscal 2027 Financial Stewardship

On July 23, 2026, the Brown‑Forman Board of Directors declared a regular quarterly cash dividend of $0.2310 per share on its Class A and Class B common stock. The dividend is payable on October 1, 2026, to stockholders of record on September 3, 2026. 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 $13 million to $173 million, primarily reflecting an increase in net income as well as disciplined working capital management, and free cash flow increased $32 million to $161 million, driven by strong operating cash flow generation and lower capital expenditure needs.

The company maintained a strong financial position with the repayment of the $343 million (€300 million) principal amount of its 1.20% senior notes on the July 7, 2026 maturity date.

Fiscal 2027 Outlook

Brown-Forman anticipates 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. It remains committed to building our business for the long term while focusing intensely on the variables within our control. It said it believes the company will benefit in fiscal 2027 from 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, we expect the following in fiscal 2027.

Organic net sales to be approximately flat. Organic operating income to 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.

“Against a backdrop of weak alcohol demand due to shifting mores, inflation, trade wars, and other concerns, Brown-Forman delivered solid results, showing the overall business appears to be stable even as the stock has gotten crushed in recent years,: Jeremy Bowman, contributing stock analyst at The Motley Fool, an investment research company, said. 

“Within the business, there’s a clear mix of strength and weakness. The company is shining in emerging markets where organic revenue was up 9%, driven by success in Mexico, and its ready-to-drink segment is taking off as well, showing the company’s ability to innovate. Organic revenue in RTD, which includes canned cocktails like Jack Daniel’s & Coca-Cola, was up 11%. New Mix, its branded El Jimador tequila cocktails, has been particularly strong with organic sales up 36%, benefiting from the product’s launch in the U.S. and strong demand in Mexico. Elsewhere, the international expansion of Jack Daniel’s Blackberry has driven growth.”

Bowman noted that Whiting’s coming retirement poses a challenge for Brown-Forman, but said, “The CEO change adds another potential plot twist for Brown-Forman, but at this point, it looks like the worst is behind the company, at least from an investor perspective. The stock is now priced for little to no growth, and it still has strong profit margins. It’s also a reliable dividend payer, offering a 3.5% dividend yield, with a long track record of dividend increases. Investors should keep their eye on consumer trends and the macro environment, including trade policy, as well as the CEO search, but the strength of the RTD business offers some promise that the company can get back to reasonable growth. Relative to expectations, this was a good-enough quarter for the whiskey and spirits company.

​Click here for the full financial results.

Read more: Brown-Forman Announces Strategic Distribution Realignment

About Brown-Forman

Brown-Forman Corporation has been building spirits brands for more than 150 years, with a team of approximately 5,400 employees worldwide. The company distributes beverages in more than 170 countries. Learn more at brown-forman.com.