BROWN FORMAN CORP
For the period ended Jul 31, 2025. Filed Aug 28, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2025 · Filed Aug 28, 2025
BF-A$31.47-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-01-31; filed 2025-03-05.
0000014693-25-000018
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-07-31; filed 2025-08-28.
0000014693-25-000096
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 181 previous paragraphs and 175 current paragraphs.
84 unchanged; 47 reworded; 41 added; 49 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (41)
Current report
During the first quarter of fiscal 2026, we ended our sales, marketing, and distribution relationship with Korbel Champagne Cellars (Korbel relationship), effective June 30, 2025. This adjustment removes the transaction costs related to ending the relationship and the operating activity for the non-comparable period, which is the month of July of fiscal 2025 and 2026.
Current report
Cooperage facility and related assets. This adjustment removes the restructuring initiative impact from our operating expenses and operating income for the first quarter of fiscal 2026. See Note 6 to the Condensed Consolidated Financial Statements for more information.
Current report
“Substitution drawback claims.”During the first quarter of fiscal 2026, we recognized a net benefit of $18 million related to the collection of substitution drawback claims filed with the U.S. Government between fiscal 2016 and 2019. As of the first quarter of fiscal 2026, all claims have been collected. This adjustment removes the benefit from our other expense (income), net and operating income.
Current report
1 Ended the Korbel relationship effective June 30, 2025.
Current report
During the first quarter of fiscal 2026, we concluded the Korbel relationship, effective June 30, 2025. This had an immaterial impact on our net sales and operating income for the three months ended July 31, 2025, though we expect it to negatively impact our net sales and operating income for the remainder of fiscal 2026.
Current report
Restructuring Initiative
Current report
United States Distributor Evolution
Current report
During the first quarter of fiscal 2026, we transitioned our portfolio distribution in the state of California, effective May 1, 2025, and we announced the upcoming transition in 13 additional markets across the United States, effective August 1, 2025. Net sales for the three months ended July 31, 2025 were positively impacted due to a net increase in distributor inventories related to the transition, which we expect to normalize in the remainder of fiscal 2026.
Current report
During the three months ended July 31, 2025, the operating environment remained challenging due to ongoing macroeconomic and geopolitical uncertainties, which we believe negatively impacted consumer confidence and reduced discretionary spending in many of our top markets.
Current report
◦From a brand perspective, net sales declines were led by the Sonoma-Cutrer divestiture, JDTW, and used barrel sales, partially offset by the distributor inventory build in preparation for the launch of JDTB in the United States.
Current report
◦From a geographic perspective, the declines in net sales in the United States and developed international markets were partially offset by growth in emerging markets and Travel Retail.
Current report
•We delivered gross profit of $552 million for the three months ended July 31, 2025, a decrease of 2%. Gross margin increased 0.4 percentage points to 59.8% from 59.4% in the same period last year. The increase in gross margin was driven by the positive effect of acquisitions and divestitures, partially offset by higher costs, unfavorable price/mix, and the negative effect of foreign exchange.
Current report
•We delivered operating income of $260 million for the three months ended July 31, 2025, a decrease of 7%, driven by (a) the negative effect of foreign exchange, (b) the absence of the prior-year franchise tax refund, (c) the impact of the restructuring initiative, (d) the decline in gross profit, and (e) the negative effect of acquisitions and divestitures. These declines were partially offset by the benefit of the substitution drawback claims and lower SG&A and advertising expenses.
Current report
The United States’ net sales declined 8% driven by the absence of the Sonoma-Cutrer prior-year TSA, lower volumes of JDTW and Herradura, and the end of the Korbel relationship. These declines were partially offset by the distributor inventory build in preparation for both the launch of JDTB and the distributor transitions to occur in the second quarter of fiscal 2026.
Current report
•In a challenging economic environment, Germany’s net sales decreased 10% driven by JDTW declines, partially offset by the positive effect of foreign exchange.
Current report
•Australia’s net sales declined 4% driven by the negative effect of foreign exchange.
Current report
•The United Kingdom’s net sales declined 16% driven by lower volumes of JDTW. The decline reflects soft consumer demand for the whiskey category impacted by macroeconomic and geopolitical uncertainty.
Current report
•France’s net sales declined 5% driven by lower JDTW volumes, partially offset by the positive effect of foreign exchange.
Current report
•Canada’s net sales decreased 62% driven by volumetric declines of our American whiskey portfolio and JD RTDs due to the removal of American-made alcohol from retail shelves in most of its provinces.
Current report
•Net sales in the Rest of Developed International increased 1% led by the distribution of new agency brands in Japan, the improved net pricing due to the transition to owned distribution in Italy, and the positive effect of foreign exchange. The increases were partially offset by lower volumes of JDTW in Japan, South Korea, and Belgium, as well as an estimated net decrease in distributor inventories related to the transition to owned distribution in Italy.
Current report
•Brazil’s net sales increased 31% driven by the growth of JDTW and JDTA, reflecting continued distribution expansion and an estimated net increase in distributor inventories.
Current report
•Türkiye’s net sales increased 11%, driven by higher prices across our portfolio, led by JDTW, in response to high inflation, partially offset by the negative effect of foreign exchange.
Current report
•Net sales in the Rest of Emerging increased 27%, driven by higher volumes across the rest of Latin America, led by el Jimador; higher volumes of Jack Daniel’s family of brands, led by the United Arab Emirates due to an estimated net increase in distributor inventories; and the positive effect of foreign exchange.
Current report
Travel Retail’snet sales increased 8% due to higher volumes of JDTW and Gin Mare, partially timing related, as well as the positive effect of foreign exchange.
Current report
Non-branded and bulk’snet sales decreased 44% driven by the decline of used barrel sales as demand and pricing adjusted to levels that reflect the current challenging and uncertain operating environment for our industry.
Current report
•Net sales for JDTA increased 18% driven by broad-based growth in emerging markets, led by Brazil, which was partially due to an estimated net increase in distributor inventories, and the positive effect of foreign exchange. These increases were partially offset by declines in South Korea.
Current report
•Net sales for JDTF declined 4% driven by lower volumes in the United States.
Current report
•Woodford Reserve’snet sales declined 2% driven by lower volumes in the United States, partially due to the distributor transitions, and the removal of American-made alcohol from retail shelves in most Canadian provinces. These declines were partially offset by favorable mix in the United States.
Current report
•Net sales for Rest of Whiskey increased 33% driven by the distributor inventory build in preparation for the launch of JDTB, partially offset by lower volumes of other super-premium Jack Daniel’s expressions.
Current report
•el Jimador’snet sales increased 14% driven by higher volumes in the United States due to the roll-out of the new bottle design, inventory build ahead of the distributor transitions in 13 states, and the new innovation launch of the Cristalino expression.
Current report
•Herradura’s net sales declined 16% driven by lower volumes in the United States.
Current report
Net sales for Rest of Portfolio declined 27% driven by the absence of Sonoma-Cutrer and Finlandia prior-year TSAs and the net decrease in distributor inventories due to the end of the Korbel relationship. These declines were partially offset by the distribution of new agency brands in Japan and Mexico, along with growth of Gin Mare in Italy partially due to the transition to owned distribution.
Current report
Non-branded and bulk’snet sales decreased 44% driven by the decline of used barrel sales as demand and pricing adjusted to levels that reflect the current challenging and uncertain operating environment for our industry.
Current report
For the three months ended July 31, 2025, net sales were $924 million, a decrease of $27 million, or 3%, as unfavorable price/mix was partially offset by higher volumes. Volume increased 3% driven by higher volumes of New Mix as well as the United States distributor inventory build in preparation for both the launch of JDTB and the distributor transitions to occur in the second quarter of fiscal 2026, partially offset by the divestiture of Sonoma-Cutrer and lower volumes of JDTW. Price/mix declined 6% driven by unfavorable portfolio mix from New Mix and lower sales of used barrels, partially offset by the positive portfolio mix impact from JDTB. See “Results of Operations - Fiscal 2026 Year-to-Date Highlights” above for further details on net sales for the three months ended July 31, 2025.
Current report
•Advertising expense decreased 4% for the three months ended July 31, 2025 led by lower JDTW spend and lower spend resulting from the end of the Korbel relationship, partially offset by the negative effect of foreign exchange.
Current report
For the three months ended July 31, 2025, operating income totaled $260 million, a decrease of $21 million, or 7%. Operating margin decreased 1.4 percentage points to 28.2% from 29.6% in the same period last year driven by (a) the negative effect of foreign exchange, (b) the absence of the prior-year franchise tax refund, (c) the impact of the restructuring initiative, (d) the decline in gross profit, and (e) the negative effect of acquisitions and divestitures. These declines were partially offset by the benefit of the substitution drawback claims and lower SG&A and advertising expenses.
Current report
Diluted earnings per shareof $0.36 for the three months ended July 31, 2025, decreased 13% from the $0.41 reported for the same period last year driven by the decrease in operating income and an increase in non-operating postretirement expense.
Current report
We continue to anticipate the operating environment for fiscal 2026 to be challenging, with low visibility due to macroeconomic and geopolitical volatility as we face headwinds from consumer uncertainty, the potential impact from currently unknown tariffs, and lower non-branded sales of used barrels. We remain focused on building our business for the long term and navigating the current environment at pace with strategic initiatives in fiscal 2026 that we believe will unlock future growth led by the significant evolution of our U.S. distribution, the restructuring initiative, and meaningful new product innovation. Accordingly, we reiterate the following expectation for fiscal 2026:
Current report
•Organic net sales decline in the low-single digit range.
Current report
•Organic operating income decline in the low-single digit range.
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Removed paragraphs (49)
Previous report
During fiscal 2024, we sold the Sonoma-Cutrer wine business in exchange for an ownership percentage of 21.4% in The Duckhorn Portfolio Inc. (Duckhorn) along with $50 million cash and entered into a related TSA for this business. This transaction resulted in a pre-tax gain of $175 million. This adjustment removes the (a) transaction costs related to the divestiture, (b) operating activity for the non-comparable period, which is activity in the first, second, and third quarters of fiscal 2024, and (c) net sales, cost of sales, and operating expenses recognized pursuant to the TSA related to distribution services in certain markets.
Previous report
We believe that these adjustments allow for us to better understand our organic results on a comparable basis.
Previous report
“Jack Daniel’s Country Cocktails business model change (JDCC).”In fiscal 2021, we entered into a partnership with the Pabst Brewing Company for the supply, sales, and distribution of Jack Daniel's Country Cocktails in the United States while Brown-Forman continued to produce certain products. During fiscal 2024, this production fully transitioned to Pabst Brewing Company for the Jack Daniel’s Country Cocktails products. This adjustment removes
Previous report
the non-comparable operating activity related to the sales of Brown-Forman-produced Jack Daniel’s Country Cocktails products for the first, second, and third quarters of fiscal 2024 and fiscal 2025.
Previous report
Beginning in fiscal 2025, we aggregated the “Wine” and “Vodka” product categories with “Rest of Portfolio,” due to the divestitures of Sonoma-Cutrer and Finlandia. Please refer to the new definition of "Rest of Portfolio” for more information. The fiscal 2024 "Rest of Portfolio" amounts have been adjusted accordingly for comparison purposes.
Previous report
During the fourth quarter of fiscal 2024, we sold the Sonoma-Cutrer wine business in exchange for an ownership percentage of 21.4% in Duckhorn along with $50 million cash and entered into a TSA for this business. The absence of the brand negatively impacted our net sales and operating income for the three months and nine months ended January 31, 2025. Gross margin was positively impacted for the three months ended January 31, 2025 and negatively impacted for the nine months ended January 31, 2025. On December 24, 2024, Duckhorn was acquired by Butterfly Equity and we recognized a $78 million gain on the sale of our investment in Duckhorn during the three months ended January 31, 2025. See Note 5 to the Condensed Consolidated Financial Statements for more information.
Previous report
Restructuring and other charges
Previous report
◦From a brand perspective, net sales declines were led by the Finlandia and Sonoma-Cutrer divestitures, our Tequila portfolio, and the impact of JDCC, partially offset by growth of Woodford Reserve and the non-branded and bulk business (primarily used barrel sales).
Previous report
◦From a geographic perspective, net sales declined across geographic aggregations.
Previous report
•We delivered gross profit of $1.8 billion for the nine months ended January 31, 2025, a decrease of 6%. Gross margin decreased 1.5 percentage points to 59.4% from 60.9% in the same period last year. The decrease in gross margin was largely driven by the higher costs and the negative effect of foreign exchange, partially offset by favorable price/mix, the impact of JDCC, and the positive effect of acquisitions and divestitures.
Previous report
•We delivered operating income of $902 million for the nine months ended January 31, 2025, a decrease of 13%, largely driven by (a) higher costs, (b) the absence of the gain on sale of the Finlandia vodka business; (c) the negative effect of foreign exchange; and (d) restructuring and other costs. The decrease was partially offset by (a) lower SG&A and advertising expenses; (b) favorable price/mix; (c) the franchise tax refund; and (d) the gain on sale of the Alabama cooperage.
Previous report
2“JDCC” is included in “other items”. See “Non-GAAP Financial Measures” above for additional details.
Previous report
The United States’ net sales declined 5% driven by (a) the divestiture of Sonoma-Cutrer; (b) lower volumes of Korbel California Champagnes, JDTW, and el Jimador; and (c) the impact of JDCC. The decline was partially offset by higher volumes and favorable price/mix of Woodford Reserve. An estimated net increase in distributor inventories positively impacted net sales.
Previous report
•Germany’s net sales declined 6% driven by lower volumes of JDTW and JD RTDs, as well as the negative effect of foreign exchange. The decline was partially offset by positive contribution from Diplomático.
Previous report
•Australia’s net sales declined 1% driven by the negative effect of foreign exchange and declines of agency brands, partially offset by growth of JD RTDs and JDTW.
Previous report
•The United Kingdom’s net sales declined 5% led by lower volumes of the American whiskey portfolio.
Previous report
•France’s net sales decreased 3% led by declines across the Jack Daniel’s family of brands and the negative effect of foreign exchange, partially offset by positive contribution from Diplomático.
Previous report
•Canada’s net sales declined 6% driven by the divestitures of Finlandia and Sonoma-Cutrer, as well as the negative effect of foreign exchange. The decline was partially offset by growth of JD RTDs.
Previous report
•Spain’snet sales declined 9% driven by lower volumes of JDTW, partially offset by positive contributions from Diplomático and Gin Mare.
Previous report
•Net sales in the Rest of Developed International declined 6% driven by (a) the divestiture of Finlandia; (b) declines of the Jack Daniel’s family of brands in South Korea; (c) the absence of Glenglassaugh high-value cask sales as compared to the same prior-year period; and (d) lower volumes of The Glendronach in Taiwan. The decline was partially offset by higher volumes across our portfolio in Japan, led by JDTW, primarily due to changes in distributor ordering patterns as compared to the same prior-year period (transitioned to owned distribution in Japan on April 1, 2024).
Previous report
•Brazil’s net sales increased 6% led by higher volumes of JDTW and JDTA, partially offset by the negative effect of foreign exchange.
Previous report
•Net sales in the Rest of Emerging were flat as higher prices of JDTW in Türkiye and volumetric growth of JDTW in the United Arab Emirates and Sub-Saharan Africa were offset by (a) the divestiture of Finlandia; (b) the negative effect of foreign exchange (reflecting the strengthening of the dollar primarily against the Turkish lira); and (c) and lower volumes across the Jack Daniel’s family of brands in Chile. An estimated net increase in distributor inventories positively impacted net sales.
Previous report
Travel Retail’snet sales declined 5% driven by lower volumes of the other super-premium Jack Daniel’s expressions, the divestiture of Finlandia, and the negative effect of foreign exchange. The decline was partially offset by growth of Diplomático.
Previous report
Non-branded and bulk’snet sales increased 38% driven by higher prices for used barrels.
Previous report
2“JDCC” is included in “other items”. See “Non-GAAP Financial Measures” above for additional details.
Previous report
•Net sales for JDTA decreased 4% driven by South Korea and the negative effect of foreign exchange, partially offset by higher volumes in Brazil and higher prices in Türkiye.
Previous report
•Woodford Reserve’snet sales increased 10% driven by higher volumes, partially reflecting an estimated net increase in distributor inventories, and favorable price/mix in the United States.
Previous report
•Net sales for Rest of Whiskey decreased 21% driven by the other super-premium Jack Daniel's expressions and The Glendronach, as well as the absence of Glenglassaugh high-value cask sales as compared to the same prior-year period.
Previous report
•el Jimador’snet sales declined 13% driven by lower volumes in the United States and Mexico, partially offset by higher prices in the United States.
Previous report
•Herradura’s net sales declined 13% led by lower volumes in Mexico.
Previous report
Net sales for Rest of Portfolio declined 31% driven by the divestitures of Finlandia and Sonoma-Cutrer. Positive contributions from Diplomático and Gin Mare were offset by lower volumes of Korbel California Champagnes in the United States. An estimated net increase in distributor inventories positively impacted net sales.
Previous report
Non-branded and bulk’snet sales increased 38% driven by higher prices for used barrels.
Previous report
For the three months ended January 31, 2025, net sales were $1.0 billion, a decrease of $33 million, or 3%, driven by (a) the negative effect of acquisitions and divestitures; (b) the negative effect of foreign exchange; (c) unfavorable price/mix; and (d) the impact of JDCC, partially offset by higher volumes. Higher volumes were led by New Mix, JDTW, and JD RTDs. Price/mix primarily reflects a portfolio mix shift to our lower priced brands.
Previous report
For the nine months ended January 31, 2025, net sales were $3.1 billion, a decrease of $133 million, or 4%, driven by (a) the negative effect of acquisitions and divestitures; (b) the negative effect of foreign exchange; and (c) the impact of JDCC, partially offset by higher volumes. Higher volumes were primarily led by New Mix and JDTW. Price/mix reflects an unfavorable portfolio mix shift offset by growth of the non-branded and bulk business (primarily used barrel sales). See “Results of Operations - Fiscal 2025 Year-to-Date Highlights” above for further details on net sales for the nine months ended January 31, 2025.
Previous report
For the nine months ended January 31, 2025, cost of sales were $1.3 billion, a decrease of $6 million, as the positive effect of acquisitions and divestitures and the impact of JDCC were offset by higher input costs, unfavorable fixed cost absorption related to decreased production levels of our full-strength portfolio, and higher volumes of New Mix and JDTW.
Previous report
For the nine months ended January 31, 2025, gross profit of $1.8 billion decreased $127 million, or 6%, compared to the same period last year. Gross margin decreased to 59.4% from 60.9% as compared to the same period last year. The decrease in gross margin was largely driven by higher costs and the negative effect of foreign exchange, partially offset by favorable price/mix, the impact of JDCC, and the positive effect of acquisitions and divestitures.
Previous report
2 Total operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.
Previous report
For the three months ended January 31, 2025, operating expenses totaled $339 million, a decrease of $13 million, or 4%, compared to the same period last year. The decrease in operating expenses was primarily driven by the decrease in SG&A and advertising expenses, the impact of of our recently divested brands, and the positive effect of foreign exchange, partially offset by restructuring and other charges.
Previous report
•Advertising expense decreased 13% for the three months ended January 31, 2025 driven by timing of lower JDTW and JDTA spend, as well as the positive effect of foreign exchange and the impact of our recently divested brands.
Previous report
•SG&A expense decreased 13% for the three months ended January 31, 2025 reflecting (a) lower compensation-and-benefit-related expenses; (b) the absence of transaction-related expenses for the recent divestitures; (c) the positive effect of foreign exchange; and (d) lower discretionary spend.
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Reworded paragraphs (47)
Previous wording
You should read the following discussion and analysis in conjunction with both our unaudited Condensed Consolidated Financial Statements and related notes included in Part I, Item 1 of this Quarterly Report and our Annual Report on Form 10-K for the fiscal year ended April 30, 2024 (2024 Form 10-K). Note that the results of operations for the nine months ended January 31, 2025, are not necessarily indicative of future or annual results. In this Item, “we,” “us,” “our,” “Brown-Forman,” and the “Company” refer to Brown-Forman Corporation and its consolidated subsidiaries, collectively.
Current wording
You should read the following discussion and analysis in conjunction with both our unaudited Condensed Consolidated Financial Statements and related notes included in Part I, Item 1 of this Quarterly Report and our Annual Report on Form 10-K for the fiscal year ended April 30, 2025 (2025 Form 10-K). Note that the results of operations for the three months ended July 31, 2025, are not necessarily indicative of future or annual results. In this Item, “we,” “us,” “our,” “Brown-Forman,” and the “Company” refer to Brown-Forman Corporation and its consolidated subsidiaries, collectively.
Previous wording
•“Acquisitions and divestitures.” This adjustment removes (a) the gain or loss recognized on sale of divested brands and certain assets, (b) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction, transition, and integration costs), (c) the effects of operating activity related to acquired and divested brands for periods not comparable year over year (non-comparable periods), and (d) fair value changes to contingent consideration liabilities. Excluding non-comparable periods allows us to include the effects of acquired and divested brands only to the extent that results are comparable year over year.
Current wording
•“Acquisitions and divestitures.” This adjustment removes (a) the gain or loss recognized on sale of divested brands and certain assets, (b) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction, transition, and integration costs), (c) the effects of operating activity related to acquired and divested brands, including certain divested agency brands, for periods not comparable year over year (non-comparable periods), and (d) fair value changes to contingent consideration liabilities. Excluding non-comparable periods allows us to include the effects of acquired and divested brands only to the extent that results are comparable year over year. For the first quarter of fiscal 2026, we had the following acquisitions and divestitures adjustments:
Previous wording
During fiscal 2023, we acquired Gin Mare Brand, S.L.U. and Mareliquid Vantguard, S.L.U., which owned the Gin Mare brand (Gin Mare). This adjustment removes the fair value adjustments to Gin Mare’s earn-out contingent consideration liability that is payable in cash no earlier than July 2024 and no later than July 2027.
Current wording
During fiscal 2023, we acquired Gin Mare Brand, S.L.U. and Mareliquid Vantguard, S.L.U., which owned the Gin Mare brand (Gin Mare). This adjustment removes the fair value adjustments to Gin Mare’s contingent consideration liability that is payable in cash no later than July 2027.
Previous wording
During fiscal 2024, we sold our Finlandia vodka business, which resulted in a pre-tax gain of $92 million, and entered into a related transition services agreement (TSA) for this business. This adjustment removes the (a) transaction costs related to the divestiture, (b) the gain on sale of the Finlandia vodka business, (c) operating activity for the non-comparable period, which is activity in the first and second quarters of fiscal 2024, and (d) net sales, cost of sales, and operating expenses recognized pursuant to the TSA related to distribution services in certain markets.
Current wording
During fiscal 2024, we sold our Finlandia vodka and Sonoma-Cutrer wine businesses and entered into related transition services agreements (TSAs) for these businesses. This adjustment removes the net sales, cost of sales, and operating expenses recognized pursuant to the TSAs related to distribution services in certain markets for the non-comparable period, which is activity from the first quarter of fiscal 2025.
Previous wording
During the second quarter of fiscal 2024, we recognized a gain of $7 million on the sale of certain fixed assets. During the first quarter of fiscal 2025, we recognized a gain of $12 million on the sale of the Alabama cooperage. This adjustment removes the gains from our other expense (income), net and operating income.
Current wording
During the first quarter of fiscal 2025, we recognized a gain of $12 million on the sale of the Alabama cooperage. This adjustment removes the gain from our other expense (income), net and operating income.
Previous wording
“Restructuring and other charges.”During the third quarter of fiscal 2025, our Board of Directors approved a plan to reduce our structural cost base and realign resources toward future sources of growth. This included reducing our workforce by approximately 12% and closing the Louisville-based Brown-Forman Cooperage. We also offered a special, one-time early retirement benefit to qualifying U.S. employees. Collectively, this adjustment removes the $33 million impact from our operating expenses and operating income.
Current wording
“Restructuring initiative.”During the third quarter of fiscal 2025, our Board of Directors approved a plan to reduce our structural cost base and realign resources toward future sources of growth. This included reducing our workforce by approximately 12% and closing the Louisville-based Brown-Forman Cooperage. We also offered a special, one-time early retirement benefit to qualifying U.S. employees. During the first quarter of fiscal 2026, we incurred $12 million in restructuring and other charges associated with this initiative and completed the sale of the Brown-Forman
Previous wording
•“Developed International”markets are “advanced economies” as defined by the IMF, excluding the United States. Our top developed international markets were Germany, Australia, the United Kingdom, France, Canada, and Spain. This aggregation represents our net sales of branded products to these markets.
Current wording
•“Developed International”markets are “advanced economies” as defined by the IMF, excluding the United States. Our top developed international markets were Germany, Australia, the United Kingdom, France, and Canada. This aggregation represents our net sales of branded products to these markets.
Previous wording
•“Emerging”markets are “emerging and developing economies” as defined by the IMF. Our top emerging markets were Mexico, Poland, and Brazil. This aggregation represents our net sales of branded products to these markets.
Current wording
•“Emerging”markets are “emerging and developing economies” as defined by the IMF. Our top emerging markets were Mexico, Poland, Brazil, and Türkiye. This aggregation represents our net sales of branded products to these markets.
Previous wording
•“Brazil”includes Brazil, Uruguay, Paraguay, and certain other surrounding territories.
Current wording
•“Brazil”includes Brazil, Paraguay, Uruguay, and certain other surrounding territories.
Previous wording
•“Whiskey” includes all whiskey spirits and whiskey-based flavored liqueurs. The brands included in this category are the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below), the Woodford Reserve family of brands (Woodford Reserve), the Old Forester family of brands (Old Forester), The Glendronach, Glenglassaugh, Benriach, Slane Irish Whiskey, and Coopers’ Craft.
Current wording
•“Whiskey” includes all whiskey spirits and whiskey-based flavored liqueurs. The brands included in this category are the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below), the Woodford Reserve family of brands (Woodford Reserve), the Old Forester family of brands (Old Forester), The Glendronach, Benriach, Glenglassaugh, and Slane Irish Whiskey.
Previous wording
•“American whiskey” includes the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below), Woodford Reserve, Old Forester, and Coopers’ Craft.
Current wording
•“American whiskey” includes the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below), Woodford Reserve, and Old Forester.
Previous wording
•“Jack Daniel’s RTD/RTP” products include all RTD line extensions of Jack Daniel’s, such as Jack Daniel’s & Cola, Jack Daniel’s & Coca-Cola RTD, Jack Daniel’s Country Cocktails, Jack Daniel’s Double Jack, and other malt- and spirit-based Jack Daniel’s RTDs, along with Jack Daniel’s Winter Jack RTP.
Current wording
•“Jack Daniel’s RTD/RTP” products include all RTD line extensions of Jack Daniel’s, such as Jack Daniel’s & Coca-Cola RTD, Jack Daniel’s & Cola, Jack Daniel’s Double Jack, Jack Daniel’s Country Cocktails, and other malt- and spirit-based Jack Daniel’s RTDs, along with Jack Daniel’s Winter Jack RTP.
Previous wording
•“Rest of Portfolio” includes Sonoma-Cutrer (which was divested on April 30, 2024), Korbel California Champagnes, Diplomático, Gin Mare, Chambord, Finlandia Vodka (which was divested on November 1, 2023), Fords Gin, Korbel Brandy, and other agency brands (brands we do not own, but sell in certain markets).
Current wording
•“Rest of Portfolio” includes Korbel California Champagnes 1, Diplomático, Chambord, Gin Mare, Sonoma-Cutrer (which was divested on April 30, 2024), Finlandia Vodka (which was divested on November 1, 2023), Korbel Brandy 1, Fords Gin, and other agency brands (brands we do not own, but sell in certain markets).
Previous wording
•“Non-branded and bulk” includes net sales of used barrels, contract bottling services, and non-branded bulk whiskey and wine.
Current wording
•“Non-branded and bulk” includes net sales of used barrels, contract bottling services, and non-branded bulk whiskey.
Previous wording
•“Jack Daniel’s family of brands” includes Jack Daniel’s Tennessee Whiskey (JDTW), JD RTD/RTP, Jack Daniel’s Tennessee Honey (JDTH), Gentleman Jack, Jack Daniel’s Tennessee Apple (JDTA), Jack Daniel’s Tennessee Fire (JDTF), Jack Daniel’s Single Barrel Collection (JDSB), Jack Daniel’s Bonded Tennessee Whiskey, Jack Daniel’s Sinatra Select, Jack Daniel’s Tennessee Rye Whiskey (JDTR), Jack Daniel’s Triple Mash Blended Straight Whiskey, Jack Daniel’s Bottled-in-Bond, Jack Daniel’s American Single Malt, Jack Daniel’s 12 Year Old, Jack Daniel’s 10 Year Old, and other Jack Daniel’s expressions.
Current wording
•“Jack Daniel’s family of brands” includes Jack Daniel’s Tennessee Whiskey (JDTW), JD RTD/RTP, Jack Daniel’s Tennessee Honey (JDTH), Gentleman Jack, Jack Daniel’s Tennessee Apple (JDTA), Jack Daniel’s Tennessee Fire (JDTF), Jack Daniel’s Tennessee Blackberry (JDTB), Jack Daniel’s Single Barrel Collection (JDSB), Jack Daniel’s Sinatra Select, Jack Daniel’s Bonded Tennessee Whiskey, Jack Daniel’s Bonded Rye Tennessee Whiskey, Jack Daniel’s Triple Mash Blended Straight Whiskey, Jack Daniel’s American Single Malt, Jack Daniel’s 12 Year Old, Jack Daniel’s 14 Year Old, Jack Daniel’s 10 Year Old, and other Jack Daniel’s expressions.
Previous wording
•“Estimated net change in distributor inventories.” We generally recognize revenue when our products are shipped or delivered to customers. In the United States and certain other markets, our customers are distributors that sell downstream to retailers and consumers. We believe that our distributors’ downstream sales more closely reflect actual consumer demand than do our shipments to distributors. Our shipments increase distributors’ inventories, while distributors’ depletions (as described above) reduce their inventories. Therefore, it is possible that our shipments do not coincide with distributors’ downstream depletions and merely reflect changes in distributors’ inventories. Because changes in distributors’ inventories could affect our trends, we believe it is useful for investors to understand those changes in the context of our operating results.
Current wording
•“Estimated net change in distributor inventories.” We generally recognize revenue when our products are shipped or delivered to customers. In the United States and certain other markets, our customers are distributors that sell downstream to retailers and consumers. We believe that our distributors’ downstream sales more closely reflect actual consumer demand than do our shipments to distributors. Our shipments increase distributors’ inventories, while distributors’ depletions (as described above) reduce their inventories. Therefore, it is possible that our shipments do not coincide with distributors’ downstream depletions and merely reflect changes in distributors’ inventories. Because changes in
Previous wording
•Risks from changes to the trade policies, tariff and import and export regulations by the U.S. or foreign governments and the effectiveness of our actions to mitigate the negative impact on our margins, sales, and/or distributors
Current wording
•Risks from changes to the trade policies, tariffs and import and export regulations of the U.S. or foreign governments and the effectiveness of our actions to mitigate the negative impact on our margins, sales, and/or distributors
Previous wording
For further information on these and other risks, please see the risks and uncertainties described in Part I, Item 1A. Risk Factors of our 2024 Form 10-K, and those described from time to time in our reports on Form 10-Q filed with the Securities and Exchange Commission (SEC).
Current wording
For further information on these and other risks, please see the risks and uncertainties described in Part I, Item 1A. Risk Factors of our 2025 Form 10-K, and those described from time to time in our reports on Form 10-Q filed with the SEC.
Previous wording
Unless otherwise indicated, all related commentary is on a reported basis and is for the nine months ended January 31, 2025 compared to the same period last year.
Current wording
Unless otherwise indicated, all related commentary is on a reported basis and is for the three months ended July 31, 2025 compared to the same period last year.
Previous wording
During the third quarter of fiscal 2024, we sold the Finlandia vodka business for $196 million cash and entered into a TSA for this business. The absence of the brand negatively impacted our net sales and operating income for the three months and nine months ended January 31, 2025. Gross margin was positively impacted for the three months and nine months ended January 31, 2025.
Current wording
During the fourth quarter of fiscal 2024, we sold the Sonoma-Cutrer wine business and entered into a TSA, which ended in August 2024. The absence of the brand negatively impacted our net sales and operating income, though positively impacted our gross margin for the three months ended July 31, 2025.
Previous wording
During the third quarter of fiscal 2025, our Board of Directors approved a plan to reduce our structural cost base and realign resources toward future sources of growth. This included reducing the company’s workforce by approximately 12% and closing the Louisville-based Brown-Forman Cooperage. We also offered a special, one-time early retirement benefit to qualifying U.S. employees. Collectively, these actions negatively impacted our operating expenses and operating income for the three months and nine months ended January 31, 2025. See Note 6 to the Condensed Consolidated Financial Statements for more information.
Current wording
During the third quarter of fiscal 2025, our Board of Directors approved a plan to reduce our structural cost base and realign resources toward future sources of growth. This included reducing our workforce by approximately 12% and closing the Louisville-based Brown-Forman Cooperage. We also offered a special, one-time early retirement benefit to qualifying U.S. employees. During the first quarter of fiscal 2026, we incurred additional restructuring charges associated with this initiative and completed the sale of the Brown-Forman Cooperage facility and related assets. Collectively, these actions negatively impacted our operating expenses and operating income for the three months ended July 31, 2025. See Note 6 to the Condensed Consolidated Financial Statements for more information.
Previous wording
•We delivered net sales of $3.1 billion for the nine months ended January 31, 2025, a decrease of 4%. The decrease was driven by (a) the negative effect of acquisitions and divestitures; (b) the negative effect of foreign exchange; and (c) the impact of JDCC. The decrease was partially offset by higher volumes.
Current wording
•We delivered net sales of $924 million for the three months ended July 31, 2025, a decrease of 3%. The decrease was driven by the negative effect of acquisitions and divestitures and the negative effect of foreign exchange, partially offset by higher volumes.
Previous wording
•We delivered diluted earnings per share of $1.53 for the nine months ended January 31, 2025, a decrease of 4% from the $1.58 reported for the same period last year, driven primarily by the decrease in operating income, partially offset by the gain on sale of our investment in Duckhorn and the benefit of the lower effective tax rate.
Current wording
•We delivered diluted earnings per share of $0.36 for the three months ended July 31, 2025, a decrease of 13% from the $0.41 reported for the same period last year, driven by the decrease in operating income and an increase in non-operating postretirement expense.
Previous wording
The following table provides supplemental information for our largest markets. We discuss results of the markets most affecting our performance below the table. Unless otherwise indicated, all related commentary is on a reported basis and is for the nine months ended January 31, 2025 compared to the same period last year.
Current wording
The following table provides supplemental information for our largest markets. We discuss results of the markets most affecting our performance below the table. Unless otherwise indicated, all related commentary is on a reported basis and is for the three months ended July 31, 2025 compared to the same period last year.
Previous wording
3 See “Non-GAAP Financial Measures” above for details on our use of “organic change” in net sales, including how we calculate this measure and why we believe this information is useful to readers.
Current wording
2 See “Non-GAAP Financial Measures” above for details on our use of “organic change” in net sales, including how we calculate this measure and why we believe this information is useful to readers.
Previous wording
•Mexico’s net sales declined 9% driven by lower volumes of the Tequila portfolio and the negative effect of foreign exchange. The decline was partially offset by growth of New Mix, the distribution of new agency brands, and higher volumes of JD RTDs.
Current wording
•Mexico’s net sales increased 14% driven by growth of New Mix and the distribution of new agency brands. This growth was partially offset by the negative effect of foreign exchange along with lower volumes of our tequilas as consumer preferences shifted to lower-priced products.
Previous wording
•Poland’s net sales declined 13% driven by the divestiture of Finlandia, partially offset by growth of JDTW and the positive effect of foreign exchange.
Current wording
•Poland’s net sales increased 10% driven by the positive effect of foreign exchange and growth of JDTW due to increased consumer-led demand, partially offset by the divestiture of Finlandia.
Previous wording
The following table provides supplemental information for our largest brands. We discuss results of the brands most affecting our performance below the table. Unless otherwise indicated, all related commentary is on a reported basis and is for the nine months ended January 31, 2025 compared to the same period last year.
Current wording
The following table provides supplemental information for our largest brands. We discuss results of the brands most affecting our performance below the table. Unless otherwise indicated, all related commentary is on a reported basis and is for the three months ended July 31, 2025 compared to the same period last year.
Previous wording
3 See “Non-GAAP Financial Measures” above for details on our use of “organic change” in net sales, including how we calculate this measure and why we believe this information is useful to readers.
Current wording
2 See “Non-GAAP Financial Measures” above for details on our use of “organic change” in net sales, including how we calculate this measure and why we believe this information is useful to readers.
Previous wording
•Net sales for JDTW increased 1% driven by higher volumes in Japan following the transition to owned-distribution and higher prices in Türkiye in response to high inflation and currency devaluation. The growth was partially offset by lower volumes in the United States. An estimated net increase in distributor inventories positively impacted net sales.
Current wording
•Net sales for JDTW declined 4% led by lower volumes in the United States, Germany, and the United Kingdom, partially offset by volumetric growth in Brazil along with higher prices in Türkiye in response to high inflation. An estimated net increase in distributor inventories in our emerging markets, led by the United Arab Emirates, positively impacted net sales.
Previous wording
•Net sales for JDTH declined 1% driven by the negative effect of foreign exchange and lower volumes in developed international markets, partially offset by growth in emerging international markets. An estimated net increase in distributor inventories positively impacted net sales.
Current wording
•Net sales for JDTH declined 3% driven by lower volumes in developed international markets and the United States, partially offset by higher volumes in emerging markets, led by Chile, and the positive effect of foreign exchange.
Previous wording
•Net sales for Gentleman Jack increased 2% led by higher prices in Türkiye, partially offset by the negative effect of foreign exchange. An estimated net increase in distributor inventories positively impacted net sales.
Current wording
•Net sales for Gentleman Jack increased 8% led by higher prices and volumes in Türkiye and volumetric growth in Germany, partially offset by the negative effect of foreign exchange.
Previous wording
•Old Forester’s net sales increased 12% driven by favorable product mix in the United States.
Current wording
•Old Forester’s net sales increased 8% driven by favorable product mix and higher volumes in the United States, reflecting the distributor inventory build in preparation for the the distributor transitions to occur in the second quarter of fiscal 2026.
Previous wording
•Net sales for the JD RTD/RTPbrands declined 7% driven by the impact of JDCC, the negative effect of foreign exchange, and lower volumes in Germany. The decline was partially offset by growth of Jack Daniel’s bulk whiskey shipments for the production of Jack Daniel’s & Coca-Cola RTD products along with higher volumes in the United States reflecting an estimated net increase in distributor inventories.
Current wording
•Net sales for the JD RTD/RTPbrands declined 2% driven by lower volumes in Canada due to the removal of American-made alcohol from retail shelves in most of its provinces. These declines were partially offset by higher volumes in the United States, along with growth of Jack Daniel’s bulk whiskey shipments for the production of Jack Daniel’s & Coca-Cola RTD products.
Previous wording
•New Mixnet sales increased 2% driven by higher volumes, partially offset by the negative effect of foreign exchange.
Current wording
•New Mixnet sales increased 26% driven by strong growth in Mexico with market share gains in a growing category, partially offset by the negative effect of foreign exchange.
Previous wording
For the three months ended January 31, 2025, cost of sales were $416 million, a decrease of $17 million, or 4%, driven by (a) the positive effect of the acquisitions and divestitures; (b) the impact of JDCC; (c) a shift in portfolio mix toward our lower-cost brands; and (d) the positive effect of foreign exchange. The declines were partially offset by higher input costs, unfavorable fixed cost absorption related to decreased production levels of our full-strength portfolio, and higher volumes of New Mix and JDTW.
Current wording
For the three months ended July 31, 2025, cost of sales were $372 million, a decrease of $14 million, or 4%, as favorable cost/mix was partially offset by higher volumes. Volume increased 3% driven by higher volumes of New Mix as well as the United States distributor inventory build in preparation for both the launch of JDTB and the distributor transitions to occur in the second quarter of fiscal 2026, partially offset by the divestiture of Sonoma-Cutrer and lower volumes of JDTW. Cost/mix declined 7% driven by the divestiture of Sonoma-Cutrer and the favorable portfolio mix from New Mix, partially offset by the negative effect of foreign exchange, higher input costs, and unfavorable fixed cost absorption related to decreased production of our full-strength portfolio.
Previous wording
For the three months ended January 31, 2025, gross profit of $619 million decreased $16 million, or 3%, compared to the same period last year. Gross margin increased to 59.8% from 59.4% as compared to the same period last year. The increase in gross margin was largely driven by the positive effect of acquisitions and divestitures, favorable price/mix, and the impact of JDCC, partially offset by higher costs and the negative effect of foreign exchange.
Current wording
For the three months ended July 31, 2025, gross profit totaled $552 million, a decrease of $12 million, or 2%. Gross margin increased 0.4 percentage points to 59.8% from 59.4% in the same period last year. The increase in gross margin was driven by the positive effect of acquisitions and divestitures, partially offset by higher costs, unfavorable price/mix, and the negative effect of foreign exchange.
Previous wording
1“Other items” includes “restructuring and other charges” and “franchise tax refund”. See “Non-GAAP Financial Measures” above for additional details.
Current wording
1“Other items” includes “substitution drawback claims,” “franchise tax refund,” and “restructuring initiative.” See “Non-GAAP Financial Measures” above for additional details.
Previous wording
For the nine months ended January 31, 2025, operating expenses totaled $928 million, a decrease of $80 million, or 8%, compared to the same period last year. The decrease in operating expenses was primarily driven by (a) the decrease in SG&A and advertising expenses; (b) the impact of our recently divested brands; (c) the positive effect of foreign exchange; (d) the franchise tax refund; and (e) the gain on sale of the Alabama cooperage, partially offset by restructuring and other charges.
Current wording
For the three months ended July 31, 2025, operating expenses totaled $292 million, an increase of $8 million, or 3%. The increase in operating expenses was primarily driven by (a) the absence of the prior-year franchise tax refund, (b) the absence of the prior-year gain on sale of the Alabama cooperage, (c) the impact of the restructuring initiative, and (d) the negative effect of foreign exchange, partially offset by the benefit of the substitution drawback claims and lower SG&A and advertising expenses.
Previous wording
•SG&A expense decreased 7% for the nine months ended January 31, 2025 driven by (a) lower compensation-and-benefit-related expenses; (b) the absence of transaction-related expenses for the recent divestitures; (c) the positive effect of foreign exchange; and (d) lower discretionary spend.
Current wording
•SG&A expense decreased 6% for the three months ended July 31, 2025 driven by lower compensation-and-benefit-related expenses, partially offset by the negative effect of foreign exchange and legal fees related to the substitution drawback claims.
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Current report — wording carried from elsewhere
distributors’ inventories could affect our trends, we believe it is useful for investors to understand those changes in the context of our operating results.
Current report — wording carried from elsewhere
Unless otherwise indicated, all related commentary is on a reported basis and is for the three months ended July 31, 2025 compared to the same period last year.
Current report — wording carried from elsewhere
2 Operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
•“Spain”includes Spain and certain other surrounding territories.