Brown‑Forman Corporation reported its second‑quarter 2025 results on December 4, 2025, with total revenue of $1.04 billion, a $10 million beat over the $1.03 billion consensus estimate. Net income fell 14% to $224 million, and diluted earnings per share were $0.47, missing the $0.48 consensus by $0.01. Operating income declined 10% to $305 million, and net sales were down 5% to $1.00 billion, a 2% organic decline. Over the six‑month period ending October 31, 2025, sales were $1.96 billion versus $2.046 billion a year earlier, and net income was $394 million versus $453 million a year earlier.
The revenue beat was driven by steady growth in the travel‑retail channel and strong performance in emerging markets such as Brazil and Turkey, which offset weakness in the U.S. and other developed markets. In contrast, demand for Jack Daniel’s Tennessee Whiskey in Germany and the U.K. fell, contributing to a 4% decline in developed‑international sales. The mix shift toward higher‑margin travel‑retail and emerging‑market volumes helped cushion the overall revenue decline, but the company still faced a 5% YoY drop in net sales.
Margin pressure weighed on profitability. Operating income fell 10% as input costs rose and the company incurred restructuring charges from a workforce reduction program launched in January 2025. Gross margin contracted from 10.2% to 9.9% YoY, reflecting higher raw‑material costs and a less favorable product mix. The EPS miss, despite the revenue beat, was largely due to the combined effect of higher operating expenses and the one‑time restructuring charge, which reduced earnings per share below analyst expectations.
Management reaffirmed its fiscal‑2026 guidance, projecting a low‑single‑digit decline in organic net sales and operating income. President and CEO Lawson Whiting said the operating environment remains challenging but the team remains resilient and focused on executing plans. The guidance reflects confidence that the company can navigate macro‑economic headwinds while maintaining profitability through cost discipline and strategic investments.
Headwinds include a higher cost of living, macro‑economic uncertainty in the U.S., and a boycott of American‑made goods in Canada, all of which dampened discretionary spending. Tailwinds are steady growth in travel‑retail and emerging markets, which provide a diversified revenue base. The company’s ability to sustain guidance amid these conditions signals management’s belief in its premium portfolio and long‑term strategy.
Additional context: Brown‑Forman increased its quarterly cash dividend by 2% to $0.2310 per share, payable January 2, 2026, and approved a $400 million share‑repurchase authorization. The company also completed divestitures of Finlandia and Sonoma‑Cutrer brands, which impacted reported sales figures, and continues to pursue operational efficiencies through its restructuring program.
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