Brown‑Forman Corporation reported its second‑quarter and first‑half fiscal 2026 results, showing a 5% drop in net sales to $1.0 billion and a 10% decline in operating income to $305 million. Diluted earnings per share fell 14% to $0.47, compared with $0.53 in Q2 2025. The first‑half period also saw a 4% decline in net sales to $2.0 billion and a 9% drop in operating income to $565 million, versus $2.07 billion and $590 million in the first half of FY2025.
The sales decline was driven primarily by lower depletions in the United States and developed international markets, including a 61% organic drop in Canadian sales after the U.S. spirits were removed from Canadian retail shelves. In contrast, emerging‑market sales grew, and the ready‑to‑drink (RTD) portfolio rose 5% while the New Mix category surged 28%. Jack Daniel’s RTD portfolio slipped 4%, and el Jimador’s net sales edged up 1%, illustrating a mixed picture across brands.
Gross margin expanded by 20 basis points to 59.3% in Q2, up from 59.1% in the prior year. The improvement was largely attributable to acquisitions and divestitures that shifted the mix toward higher‑margin brands, offset by higher commodity costs and unfavorable price/mix in some segments. The first‑half margin also grew 30 basis points to 59.5%, reflecting similar dynamics.
The company maintained its shareholder‑return policy, raising the quarterly cash dividend by 2% to $0.2310 per share, payable January 2, 2026, and authorizing a $400 million share‑repurchase program that began on October 1, 2025 and will run through October 1, 2026.
CEO Lawson Whiting said the company remains resilient amid a challenging environment, noting that “our second‑quarter results reflect a continuation of the themes we saw in the first quarter, and the first half unfolded largely as we expected.” He added that the company is confident in its long‑term strategy and reaffirmed its full‑year 2026 outlook, signaling management’s belief that the business can navigate current headwinds.
Market reaction was positive, with the stock rising roughly 5% in early trading. Investors were encouraged by the fact that net sales beat analyst estimates ($1.0 billion versus $1.027 billion expected) and that the company reaffirmed its guidance, suggesting confidence in its strategic initiatives such as the U.S. distribution overhaul and portfolio pruning.
Looking ahead, Brown‑Forman reaffirmed its fiscal‑year guidance, projecting a low‑single‑digit decline in organic net sales and operating income. The company’s focus on emerging‑market growth, product innovation, and cost discipline is expected to support profitability as it continues to execute its strategic plan.
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