BROWN FORMAN CORP
For the period ended Oct 31, 2025. Filed Dec 4, 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.
Oct 31, 2025 · Filed Dec 4, 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 2025-07-31; filed 2025-08-28.
0000014693-25-000096
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-10-31; filed 2025-12-04.
0000014693-25-000112
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 175 previous paragraphs and 185 current paragraphs.
104 unchanged; 55 reworded; 22 added; 13 removed; 3 previous and 4 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 (22)
Current report
◦From a brand perspective, net sales declines were drivenby the end of the Korbel relationship and the absence of the Sonoma-Cutrer prior-year TSA, as well as lower sales of JDTW and used barrels, partially offset by the launch of JDTB and higher volumes of New Mix.
Current report
•We delivered operating income of $565 million for the six months ended October 31, 2025, a decrease of 9%. Operating margin decreased 1.5 percentage points to 28.9% from 30.4% in the same period last year. The decrease was driven by (a) the decline in gross profit, (b) the impact of the restructuring initiative, (c) the absence of the prior-year franchise tax refund, and (d) the negative effect of foreign exchange. These declines were partially offset by the benefit of the substitution drawback claims, lower SG&A and advertising expenses, as well as the positive effect of acquisitions and divestitures.
Current report
•France’s net sales increased 2% driven by the positive effect of foreign exchange and higher volumes of Gin Mare, partially offset by JDTW declines impacted by soft consumer demand for the whiskey category.
Current report
•Poland’s net sales increased 4% driven by the positive effect of foreign exchange, partially offset by the absence of the Finlandia prior-year TSA.
Current report
•Net sales for JDTW declined 6% driven by lower volumes in the United States, Germany, and the United Kingdom. The declines were partially offset by volumetric growth in Brazil. An estimated net decrease in distributor inventories negatively impacted net sales, led by the United States, as we returned to more normal levels of inventory following the distributor transitions that were completed as of the second quarter of fiscal 2026.
Current report
•Net sales for Gentleman Jack declined 1% driven by the negative effect of foreign exchange. In addition, lower volumes in the United States were partially offset by higher volumes in Australia and Türkiye.
Current report
•Net sales for JDTA increased 16% driven by growth in Brazil, partially due to favorable timing of retailer ordering patterns as well as the continued distribution expansion.
Current report
•Old Forester’s net sales increased 2% driven by the United States, which benefited from higher net pricing related to the distributor transitions and an estimated net increase in distributor inventories.
Current report
•el Jimador’snet sales increased 1% led by higher volumes in the rest of Latin America, partially offset by declines in Mexico as consumer preferences shifted to lower-priced products. An estimated net increase in distributor inventories, primarily attributed to distributor transitions and buying patterns in the United States, positively impacted net sales.
Current report
•Herradura’s net sales declined 11% driven by lower volumes in the United States and unfavorable price/mix in Mexico.
Current report
For the three months ended October 31, 2025, net sales were $1.0 billion, a decrease of $59 million, or 5%, driven by unfavorable price/mix and lower volumes. Volume declined 2% driven by the end of the Korbel relationship and lower volumes of JDTW and JD RTDs, partially offset by higher volumes of New Mix and the launch of JDTB, due in part to a net increase in distributor inventories in the United States. Price/mix declined 4% driven by unfavorable portfolio mix from New Mix and lower sales of used barrels, partially offset by the positive portfolio mix from JDTB and higher net pricing across the portfolio in the United States as a result of the changes to our distributor relationship terms.
Current report
For the six months ended October 31, 2025, cost of sales were $793 million, a decrease of $42 million, or 5%, driven by favorable cost/mix, while volume was flat. Volume was flat as the end of the Korbel relationship and the Sonoma-Cutrer prior-year TSA, as well as lower volumes of JDTW, were offset by higher volumes of New Mix and the launch of JDTB, due in part to a net increase in distributor inventories in the United States. Cost/mix declined 5% driven by the end of the Korbel relationship, the absence of the Sonoma-Cutrer prior-year TSA, and favorable portfolio mix from New Mix. The decline was partially offset by unfavorable fixed cost absorption related to decreased production of our full-strength portfolio, inflation on our input costs, and timing of cost fluctuations.
Current report
For the six months ended October 31, 2025, gross profit totaled $1.2 billion, a decrease of $45 million, or 4%. Gross margin increased to 59.5% from 59.2% 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 and unfavorable price/mix.
Current report
2 Total operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.
Current report
•Advertising expense was flat for the three months ended October 31, 2025, as the increased investment for the new “That’s What Makes Jack, JACK” global campaign, the launch of JDTB, and the negative effect of foreign exchange were offset by lower spend across the rest of our portfolio and the end of the Korbel relationship.
Current report
•SG&A expense was flat for the three months ended October 31, 2025, as lower compensation-and-benefit-related expenses following our restructuring initiative were offset by the negative effect of foreign exchange.
Current report
•Advertising expense decreased 2% for the six months ended October 31, 2025, as the increased investment for the new “That’s What Makes Jack, JACK” global campaign, the launch of JDTB, and the negative effect of foreign exchange were more than offset by lower spend across the rest of our portfolio and the end of the Korbel relationship.
Current report
For the three months ended October 31, 2025, operating income totaled $305 million, a decrease of $36 million, or 10%, compared to the same period last year. Operating margin decreased 1.7 percentage points to 29.4% from 31.1% in the same period last year driven by the decline in gross profit, partially offset by the positive effect of acquisitions and divestitures and the positive effect of foreign exchange.
Current report
For the six months ended October 31, 2025, operating income totaled $565 million, a decrease of $57 million, or 9%. Operating margin decreased 1.5 percentage points to 28.9% from 30.4% in the same period last year driven by (a) the decline in gross profit, (b) the impact of the restructuring initiative, (c) the absence of the prior-year franchise tax refund, and (d) the negative effect of foreign exchange. These declines were partially offset by the benefit of the substitution drawback claims, lower SG&A and advertising expenses, as well as the positive effect of acquisitions and divestitures.
Current report
The estimated capital expenditures range has been updated to $110 to $120 million from $125 to $135 million.
Current report
Share repurchases. On October 1, 2025, the Board of Directors authorized the repurchase of up to $400 million (excluding brokerage fees and excise taxes) of outstanding shares of Class A and Class B common stock from October 1, 2025, through October 1, 2026 (the Repurchase Program), subject to market and other conditions. Under the Repurchase Program, we can repurchase shares of Class A and Class B common stock for cash in open market purchases, block transactions, purchases made in accordance with Rule 10b5-1 under the Exchange Act, and privately negotiated transactions, in accordance with applicable laws and regulations. The Repurchase Program does not obligate us to repurchase a minimum number of shares of common stock, and the Repurchase Program may be modified, suspended, or terminated by us at any time without prior notice.
Current report
Under the Repurchase Program, in October 2025, we repurchased 226,600 Class A shares at an average price of $27.86 per share and 3,292,906 Class B shares at an average price of $28.08 per share, for a total cost of $99 million. Subsequent to the end of the quarter through November 30, 2025, we repurchased 302,431 Class A shares at an average price of $27.50 per share, and 5,721,293 Class B shares at an average price of $27.74 per share, for a total cost of $167 million. As of November 30, 2025, approximately $134 million remained available under the program.
Removed paragraphs (13)
Previous 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.
Previous 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.
Previous 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.
Previous report
•France’s net sales declined 5% driven by lower JDTW volumes, partially offset by the positive effect of foreign exchange.
Previous report
•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 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.
Previous report
•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 report
•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 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.
Previous report
•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 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.
Previous 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.
Previous report
•Capital expenditures planned to be in the range of $125 to $135 million.
Reworded paragraphs (55)
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, 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.
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 six months ended October 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, 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:
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 and second quarters 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 contingent consideration liability that is payable in cash 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 from our other expense (income), net and operating income.
Previous 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.
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, operating expenses, and operating income recognized pursuant to the TSAs related to distribution services in certain markets for the non-comparable period, which is activity from the first and second quarters of fiscal 2025.
Previous wording
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 wording
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 net sales, cost of sales, operating expenses, and operating income for the non-comparable period, which is July through October of fiscal 2025 and 2026.
Previous 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
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 and second quarters of fiscal 2026, we incurred $16 million in restructuring and other charges associated with this initiative and completed the sale of the
Previous wording
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 wording
Brown-Forman Cooperage facility and related assets. Comparatively, we incurred $2 million in related restructuring and other charges in the second quarter of fiscal 2025, prior to the restructuring initiative’s announcement. This adjustment removes the restructuring initiative impact from our operating expenses and operating income for the second quarter of fiscal 2025 and the first half of fiscal 2026. See Note 6 to the Condensed Consolidated Financial Statements for more information.
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 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.
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 Blackberry (JDTB), Jack Daniel’s Tennessee Fire (JDTF), 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
Current wording
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.
Previous wording
•Changes in consumer preferences, consumption, or purchase patterns – particularly away from larger producers in favor of small distilleries or local producers, or away from brown spirits, our premium products, or spirits generally, and our ability to anticipate or react to them; further legalization of marijuana; bar, restaurant, travel, or other on-premise declines; shifts in demographic or health and wellness trends; or unfavorable consumer reaction to new products, line extensions, package changes, product reformulations, or other product innovation
Current wording
•Changes in consumer preferences, consumption, or purchase patterns – particularly away from larger producers in favor of small distilleries or local producers, or away from brown spirits, our premium products, or spirits generally, and our ability to anticipate or react to them; further legalization of cannabis, hemp-derived products or other similar products; bar, restaurant, travel, or other on-premise declines; shifts in demographic or health and wellness trends; or unfavorable consumer reaction to new products, line extensions, package changes, product reformulations, or other product innovation
Previous 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.
Current wording
Unless otherwise indicated, all related commentary is on a reported basis and is for the six months ended October 31, 2025 compared to the same period last year.
Previous 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.
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 this brand negatively impacted our net sales and operating income, though positively impacted our gross margin for the three months and six months ended October 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 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.
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 half 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 and six months ended October 31, 2025. See Note 6 to the Condensed Consolidated Financial Statements for more information.
Previous wording
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 wording
During the first half of fiscal 2026, we transitioned our portfolio distribution in the state of California, effective May 1, 2025, and in 13 additional markets across the United States, effective August 1, 2025. Our net sales in the first quarter of fiscal 2026 were positively impacted by the distributor inventory build in preparation for the transition, which largely subsided in the second quarter of fiscal 2026 as the new distributors became integrated in the markets. Our net sales for the three months and six months ended October 31, 2025, benefited from higher net pricing across the portfolio as a result of changes to our distributor relationship terms.
Previous wording
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 wording
During the six months ended October 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.
Previous 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.
Current wording
•We delivered net sales of $2.0 billion for the six months ended October 31, 2025, a decrease of 4%. The decrease was driven by the negative effect of acquisitions and divestitures and unfavorable portfolio mix, partially offset by higher volumes.
Previous wording
•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 wording
•We delivered gross profit of $1.2 billion for the six months ended October 31, 2025, a decrease of 4%. Gross margin increased 0.3 percentage points to 59.5% from 59.2% 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 and unfavorable price/mix.
Previous 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.
Current wording
•We delivered diluted earnings per share of $0.83 for the six months ended October 31, 2025, a decrease of 13% from the $0.96 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 three months ended July 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 six months ended October 31, 2025 compared to the same period last year.
Previous wording
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 wording
The United States’ net sales declined 9% driven by the end of the Korbel relationship and the absence of the Sonoma-Cutrer prior-year TSA, as well as lower volumes of JDTW, Herradura, and JDTH. These declines were partially offset by the launch of JDTB, higher volumes of Woodford Reserve due in part to an estimated net increase in distributor inventories, and higher net pricing across the portfolio as a result of changes to our distributor relationship terms.
Previous wording
•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 wording
•In a challenging economic environment, Germany’s net sales declined 5% driven by lower volumes of JDTW and JDTA, lower net pricing of JD RTD/RTP products, and unfavorable timing of retailer ordering patterns. These declines were partially offset by the positive effect of foreign exchange, higher volumes of Diplomático, and the launch of JDTB.
Previous wording
•Australia’s net sales declined 4% driven by the negative effect of foreign exchange.
Current wording
•Australia’s net sales declined 2% driven by the negative effect of foreign exchange, partially offset by favorable timing of retailer ordering patterns.
Previous wording
•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 wording
•The United Kingdom’s net sales decreased 13% led by JDTW and JDTH declines reflecting soft consumer demand for the whiskey category impacted by macroeconomic and geopolitical uncertainty, as well as the absence of wholesaler and retailer purchases from the prior-year period. These declines were partially offset by the launch of JDTB.
Previous wording
•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 wording
•Canada’s net sales declined 62% driven by volumetric declines of our American whiskey portfolio and JD RTDs due to the continued absence of American-made beverage alcohol from retail shelves in most of its provinces.
Previous wording
•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 wording
•Net sales in the Rest of Developed International increased 5% led by the distribution of new agency brands in Japan, growth in Italy due to the transition to owned distribution, and the positive effect of foreign exchange. These increases were partially offset by lower volumes of JDTW, led by Belgium and South Korea, as well as changes in prior-year distributor ordering patterns in Italy ahead of the transition to owned distribution.
Previous 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.
Current wording
•Mexico’s net sales increased 17% driven by higher volumes and prices of New Mix and the distribution of new agency brands. This growth was partially offset by declines of our tequilas as consumer preferences shifted to lower-priced products.
Previous wording
•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 wording
•Brazil’s net sales increased 22% driven by higher volumes of JDTA and JDTW, reflecting continued distribution expansion and favorable timing of retailer ordering patterns.
Previous wording
•Herradura’s net sales declined 16% driven by lower volumes in the United States.
Current wording
•Türkiye’s net sales declined 16% driven by the negative effect of foreign exchange and the discontinuation of an agency brand. These declines were partially offset by JDTW increases due to higher prices in response to inflation and volumetric gains.
Previous wording
•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 wording
•Net sales in the Rest of Emerging increased 10%, primarily due to higher volumes of the Jack Daniel’s family of brands and el Jimador across the rest of Latin America, as well as an estimated net increase in distributor inventories, led by the United Arab Emirates.
Previous wording
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 wording
Travel Retail’snet sales increased 7% due to higher volumes of JDTW, the favorable timing of ordering patterns, and the positive effect of foreign exchange.
Previous wording
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 wording
Non-branded and bulk’snet sales decreased 61% 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.
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 three months ended July 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 six months ended October 31, 2025 compared to the same period last year.
Previous 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.
Current wording
•Net sales for JDTH declined 6% driven by lower volumes in the United States.
Previous wording
•Net sales for JDTF declined 4% driven by lower volumes in the United States.
Current wording
•Net sales for JDTF declined 7% driven by lower volumes in the United States.
Previous wording
•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 wording
•Woodford Reserve’snet sales increased 6% driven by the United States, which benefited from higher net pricing related to the distributor transitions and an estimated net increase in distributor inventories, partially offset by the continued absence of American-made beverage alcohol from retail shelves in most Canadian provinces.
Previous wording
•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 wording
•Net sales for Rest of Whiskey increased 54% driven by the launch of JDTB and the growth of The GlenDronach, both of which benefited from an estimated net increase in distributor inventories in the United States. This growth was partially offset by lower volumes of other super-premium Jack Daniel’s expressions and Glenglassaugh.
Previous 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.
Current wording
•Net sales for the JD RTD/RTPbrands declined 4% driven by lower volumes in Canada, due to the continued absence of American-made beverage alcohol from retail shelves in most of its provinces, and declines in the United States.
Previous 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.
Current wording
•New Mixnet sales increased 28% driven by strong growth in Mexico with market share gains in a growing category.
Previous wording
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 wording
Net sales for Rest of Portfolio declined 35% driven by the end of the Korbel relationship and the absence of Sonoma-Cutrer and Finlandia prior-year TSAs. These declines were partially offset by the distribution of new agency brands in Japan and Mexico, along with broad-based growth of Gin Mare, led by Italy due in part to the transition to owned distribution.
Previous wording
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 wording
Non-branded and bulk’snet sales decreased 61% 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.
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Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
•“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
Current report — wording carried from elsewhere
During the first quarter of fiscal 2026, we ended the Korbel relationship, effective June 30, 2025. The absence of this brand negatively impacted our net sales and operating income, though positively impacted our gross margin for the three months and six months ended October 31, 2025.
Current report — wording carried from elsewhere
Theeffective tax rate for the three months ended October 31, 2025 was 20.2% compared to 17.6% for the same period last year. The increase in our effective tax rate was driven primarily by the unfavorable year-over-year impact of prior fiscal year true-ups, which was partially offset by lower state taxes.
Current report — wording carried from elsewhere
Accordingly, we reiterate the following expectation for fiscal 2026:
Rearranged previous paragraphs (3)
Previous report — wording carried 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.
Previous report — wording carried 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.
Previous report — wording carried elsewhere
2 Operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.