BROWN FORMAN CORP
For the period ended Apr 30, 2026. Filed Jun 12, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Jun 12, 2026
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-K
Period ended 2025-04-30; filed 2025-06-13.
0000014693-25-000062
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-04-30; filed 2026-06-12.
0000014693-26-000024
Item 7. 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 199 previous paragraphs and 196 current paragraphs.
88 unchanged; 61 reworded; 46 added; 48 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 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 (46)
Current report
1 Operating expenses include advertising expenses, SG&A expenses, restructuring and other charges, other intangible assets impairment, and other expense (income), net.
Current report
See Notes 5, 14, and 16 to the Consolidated Financial Statements for more information.
Current report
“Substitution drawback claims.”During 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 fiscal 2019. As of the first quarter of fiscal 2026, all claims had been collected. Comparatively, we recognized an immaterial net benefit in fiscal 2025 related to the collection of substitution drawback claims. This adjustment removes the benefit from our other expense (income), net and operating income for the periods presented.
Current report
1 As announced on March 2, 2026, we agreed to conclude our relationship with Pabst Brewing Company for flavored malt beverages within the United States. We will assume management of the supply, sales, marketing, and distribution of JDCC, effective July 7, 2026.
Current report
1 The Korbel relationship ended effective June 30, 2025.
Current report
Brand Name Impairments and Earn-out Valuation
Current report
United States Distributor Evolution
Current report
During 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. We further advanced this strategic realignment by transitioning our distribution in 11 U.S. control states, effective June 1, 2026. In fiscal 2026, our net sales benefited from higher net pricing across the portfolio as a result of changes to our distributor relationship terms.
Current report
•In fiscal 2026, we launched New Mix in the United States.
Current report
◦From a brand perspective, net sales declines were driven by the end of the Korbel relationship, the decline of used barrel sales, and lower volumes of JDTW, partially offset by the launch of JDTB and the growth of New Mix.
Current report
•We delivered operating income of $1.0 billion, a decrease of 10% compared to fiscal 2025. The decrease was primarily due to higher non-cash impairment charges, higher SG&A expenses, and the unfavorable year-over-year Gin Mare earn-out valuation adjustments. These decreases were partially offset by lower restructuring initiative costs compared to the prior year.
Current report
2 Operating expenses include advertising expenses, SG&A expenses, restructuring and other charges, other intangible assets impairment, and other expense (income), net.
Current report
The United States’ net sales declined 7%, driven by (a) the end of the Korbel relationship; (b) the absence of the Sonoma-Cutrer prior-year TSA; (c) lower volumes of JDTW, our tequilas, and JDTH; and (d) unfavorable portfolio mix. These declines were partially offset by (a) new product launches, including JDTB, Jack Daniel’s Single Barrel Heritage Barrel, and New Mix; (b) higher volumes of Woodford Reserve; (c) higher net pricing across the portfolio as a result of changes to our distributor relationship terms; and (d) favorable timing of distributor ordering patterns.
Current report
•In a challenging economic environment, Germany’s net sales declined 2%, led by lower volumes of JDTW and unfavorable timing of retailer ordering patterns. These declines were partially offset by the positive effect of foreign exchange and the launch of JDTB.
Current report
•Australia’s net sales increased 1%, driven by the el Jimador RTD launch, partially offset by lower volumes of el Jimador.
Current report
•The United Kingdom’s net sales decreased 6%, driven 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 positive effect of foreign exchange and the launch of JDTB.
Current report
•France’s net sales declined 2%, driven by lower volumes of JDTW and Diplomático, partially offset by the positive effect of foreign exchange and the launch of JDTB.
Current report
•Net sales in the Rest of Developed International increased 7%, driven by growth in Italy benefiting from the transition to owned distribution on May 1, 2025, the positive effect of foreign exchange, and the distribution of new agency brands in Japan. These increases were partially offset by volumetric declines of our American whiskey portfolio and JD RTD/RTP products in Canada due to the continued absence of American-made beverage alcohol from retail shelves in most of its provinces.
Current report
•Mexico’s net sales increased 20%, driven by higher volumes and prices of New Mix, the positive effect of foreign exchange, and the distribution of new agency brands. These increases were partially offset by declines of Herradura and el Jimador.
Current report
•Poland’s net sales increased 7%, led by the positive effect of foreign exchange, higher volumes of JDTW, and the launch of JDTB. These increases were partially offset by the absence of the Finlandia prior-year TSA.
Current report
•Brazil’s net sales increased 13%, driven by higher volumes of JDTA and JDTW, reflecting continued distribution expansion and favorable timing of retailer ordering patterns.
Current report
•Türkiye’s net sales declined 4%, driven by the negative effect of foreign exchange, partially offset by higher prices in response to inflation and volumetric gains of JDTW.
Current report
Travel Retail’s net sales grew 6%, largely due to increased passenger traffic leading to higher volumes of JDTW, as well as the positive effect of foreign exchange.
Current report
Non-branded and bulk’snet sales decreased 68%, 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 JDTW declined 2%, driven by lower volumes in the United States and our developed international markets, led by Germany, the United Kingdom, and Canada. These declines were partially offset by broad-based volumetric growth across our emerging markets, led by the United Arab Emirates and Türkiye, as well as the positive effect of foreign exchange.
Current report
•Net sales for JDTH declined 3%, driven by lower volumes in the United States, partially offset by the positive effect of foreign exchange.
Current report
•Net sales for JDTA increased 12%, driven by growth in Brazil benefiting from continued distribution expansion and the positive effect of foreign exchange.
Current report
•Net sales for JDTF declined 7%, driven by lower volumes in the United States, partially offset by the positive effect of foreign exchange.
Current report
•Woodford Reserve’snet sales increased 4%, 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
•Old Forester’s net sales increased 5%, driven by the United States due to timing of the distributor ordering patterns in our transition markets and favorable mix resulting from a shift to higher-priced brands within the family.
Current report
•Net sales for Rest of Whiskey increased 61%, driven by the launches of JDTB and Jack Daniel’s Single Barrel Heritage Barrel in the United States, which benefited from an estimated net increase in distributor inventories. These increases were partially offset by lower volumes of the rest of our other super-premium Jack Daniel’s expressions.
Current report
•Net sales for New Mix increased 41%, driven by strong growth in Mexico with market share gains in a growing category, the launch in the United States, and the positive effect of foreign exchange.
Current report
•el Jimador’snet sales decreased 2%, driven by declines in the United States and Mexico, partially offset by higher volumes in the rest of Latin America and the positive effect of foreign exchange. An estimated net increase in distributor inventories, led by the United States, positively impacted net sales.
Current report
•Herradura’s net sales declined 9%, driven by lower volumes in the United States and Mexico, partially offset by higher net pricing in the United States and the positive effect of foreign exchange.
Current report
Net sales for Rest of Portfolio declined 31%, 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 growth of Gin Mare and Diplomático, led by Italy, which benefited from the transition to owned distribution on May 1, 2025; the distribution of new agency brands in Japan and Mexico; and the positive effect of foreign exchange.
Current report
Non-branded and bulk’snet sales decreased 68%, 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
1“Other items” includes “restructuring initiative.” See “Non-GAAP Financial Measures” above for additional details.
Current report
Operating expenses totaled $1.4 billion, an increase of $143 million, or 12%, in fiscal 2026 compared to fiscal 2025. The increase in operating expenses was driven by (a) non-cash impairment charges, (b) higher SG&A expenses, (c) the negative effect of foreign exchange, and (d) the unfavorable year-over-year Gin Mare earn-out valuation adjustments. These increases were partially offset by lower restructuring initiative costs as compared to the same prior-year period, lower advertising expenses, and the benefit of the substitution drawback claims.
Current report
•Advertising expenses decreased 4% in fiscal 2026, driven by lower spend for the Jack Daniel’s family of brands, as declines for super-premium Jack Daniel’s expressions and JDTW more than offset the increased investment for the launch of JDTB. The decreases were also driven by the end of the Korbel relationship, partially offset by the negative effect of foreign exchange.
Current report
•SG&A expenses increased 9% in fiscal 2026, driven by costs associated with the contemplated business transaction discussions, higher compensation-and-benefit-related expenses, and the negative effect of foreign exchange.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Removed paragraphs (48)
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) the gain on sale of the Sonoma-Cutrer wine business; (c) operating activity for the non-comparable period,
Previous report
1 Operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.
Previous report
which is all activity in fiscal 2024; and (d) net sales, cost of sales, and operating expenses recognized pursuant to the TSA related to distribution services in certain markets.
Previous report
See Notes 5, 15, and 17 to the Consolidated Financial Statements for more information.
Previous report
“Foundation.” During fiscal 2024, we committed $23 million to the Brown-Forman Foundation and Dendrifund (the Foundation and Dendrifund) to support the communities where our employees live and work. This adjustment removes the expenses related to charitable contributions to the Foundation and Dendrifund from our organic SG&A expenses and organic operating income to present 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 the non-comparable operating activity related to the sales of Brown-Forman-produced Jack Daniel’s Country Cocktails products for fiscal 2024 and 2025.
Previous report
During 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 related TSA for this business. This transaction resulted in a pre-tax gain of $175 million. The absence of the brand negatively impacted net sales, operating income, and gross margin for fiscal 2025. On December 24, 2024, Duckhorn was acquired by Butterfly Equity. We received $350 million in cash in exchange for our 21.4% ownership interest and recognized a $78 million gain on the sale of our investment in Duckhorn. See Note 5 to the Consolidated Financial Statements for more information.
Previous report
Gin Mare Impairment and Earn-out Valuation
Previous report
•In fiscal 2024, we introduced the Glenglassaugh old and rare cask program.
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
•We delivered operating income of $1.1 billion, a decrease of 22% compared to fiscal 2024. The decrease was primarily due to the absence of the gains on sale of the Sonoma-Cutrer wine and Finlandia vodka businesses, the decline in gross profit, and the Gin Mare brand name impairment, partially offset by lower operating expenses, including the favorable fair value adjustment to Gin Mare’s contingent consideration liability.
Previous report
2 Operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.
Previous report
2“Other items” includes “JDCC.” See “Non-GAAP Financial Measures” above for additional details.
Previous report
The United States’ net sales declined 7%, driven by (a) the divestiture of Sonoma-Cutrer; (b) broad-based volume declines in a challenging consumer environment, led by JDTW and Korbel California Champagnes; and (c) the impact of the JDCC business model change. These declines were partially offset by an estimated net increase in distributor inventories across our portfolio and higher consumer-led volumes of Woodford Reserve.
Previous report
•In a challenging economic environment, Germany’s net sales decreased 4%, driven by declines in JDTW and JD RTDs, partially offset by the positive contribution from Diplomático and higher volumes of Gentleman Jack.
Previous report
•Australia’s net sales decreased 2%, driven by the negative effect of foreign exchange, the loss of an agency brand, and the divestiture of Finlandia, partially offset by growth of JD RTDs reflecting higher prices.
Previous report
•The United Kingdom’s net sales declined 6%, driven by lower volumes of the American whiskey portfolio as consumer confidence was negatively impacted by macroeconomic and geopolitical uncertainty.
Previous report
•Canada’s net sales declined 14% primarily due to volumetric declines of our American whiskey portfolio. This decline was driven by the removal of American whiskey from retail shelves across the country, which contributed to an estimated net decrease in distributor inventories. The divestitures of Finlandia and Sonoma-Cutrer and the negative effect of foreign exchange also contributed to the decline.
Previous report
•Net sales in the Rest of Developed International declined 9%, primarily driven by the divestiture of Finlandia; lower volumes in Italy, due to an estimated net decrease in distributor inventories as we transitioned to owned distribution effective May 1, 2025; and Jack Daniel’s family of brands declines in South Korea. The decrease also reflects the absence of Glenglassaugh high-value cask sales compared to the prior-year period and the negative effect of foreign exchange. These declines were partially offset by higher JDTW volumes in Japan reflecting the transition to owned distribution on April 1, 2024.
Previous report
•Mexico’s net sales declined 8%, in a challenging macroeconomic environment, driven by the negative effect of foreign exchange coupled with volumetric declines and lower net pricing for our tequilas. These declines were partially offset by the growth of New Mix, the distribution of new agency brands, and higher volumes across the Jack Daniel’s family of brands.
Previous report
•Poland’s net sales declined 11%, driven by the divestiture of Finlandia, partially offset by the positive effect of foreign exchange and the growth of JDTW.
Previous report
•Brazil’s net sales increased 12%, driven by the volumetric growth of the Jack Daniel’s family of brands, reflecting expanded distribution, increased consumer-led demand, and an estimated net increase in distributor inventories. This growth was partially offset by the negative effect of foreign exchange.
Previous report
•Türkiye’s net sales increased 30%, 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
Travel Retail’s net sales decreased 7%, led by declines of other super-premium Jack Daniel’s expressions and The Glendronach, as well as the divestiture of Finlandia. The decline was partially offset by higher volumes of Diplomático.
Previous report
Non-branded and bulk’snet sales increased 18%, driven by higher prices for used barrels.
Previous report
2“Other items” includes “JDCC.” See “Non-GAAP Financial Measures” above for additional details.
Previous report
Our top brands, excluding el Jimador and New Mix, benefited from an estimated net increase in distributor inventories, driven by the United States as well as Japan’s transition to owned distribution. See “Results of Operations - Fiscal 2025 Market Highlights” for additional details.
Previous report
•Net sales for JDTW were flat in fiscal 2025. Volumetric growth in Japan, reflecting the transition to owned distribution, and higher prices in Türkiye were offset by volumetric declines in the United States and the negative effect of foreign exchange.
Previous report
•Net sales for JDTH were flat in fiscal 2025. Broad-based growth in emerging markets, coupled with higher volumes in the United States were offset by the negative effect of foreign exchange and lower volumes in developed international markets, led by South Korea.
Previous report
•Net sales for JDTA were flat in fiscal 2025. Broad-based growth in emerging markets, led by Brazil, was offset by the negative effect of foreign exchange and lower volumes in developed international markets, primarily in South Korea where we are comparing to the launch in the prior-year period.
Previous report
•Net sales for JDTF decreased 3%, driven by broad-based volume declines in developed international markets and the negative effect of foreign exchange, partially offset by volume growth in emerging markets, led by Brazil.
Previous report
•Woodford Reserve’snet sales increased 8%, driven by higher consumer-led volumes in the United States.
Previous report
•Old Forester’s net sales increased 8%, driven by a favorable product mix shift to our higher-priced expressions in the United States.
Previous report
•Net sales for Rest of Whiskey declined 23%, driven by lower volumes of our other super-premium Jack Daniel’s expressions, which declined following prior-year product launches, volumetric declines of The Glendronach, as well as the absence of Glenglassaugh high-value cask sales as compared to the same prior-year period.
Previous report
•Net sales for New Mix declined 1% driven by the negative effect of foreign exchange, which more than offset strong volume growth amid Mexico’s challenging macroeconomic environment.
Previous report
•el Jimador’snet sales declined 13%, driven by lower volumes in the United States and Mexico.
Previous report
•Herradura’s net sales decreased 13%, primarily due to lower volumes and lower net pricing in Mexico and the United States.
Previous report
Net sales for Rest of Portfolio declined 33%, driven by the divestitures of Finlandia and Sonoma-Cutrer along with lower volumes of Korbel California Champagnes in the United States. The decline was partially offset by the positive contribution from Diplomático.
Previous report
Non-branded and bulk’snet sales increased 18%, driven by higher prices for used barrels.
Previous report
1“Other items” includes “JDCC.” See “Non-GAAP Financial Measures” above for additional details.
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Reworded paragraphs (61)
Previous wording
•“Acquisitions and divestitures.” This adjustment removes (a) the gain or loss recognized on the 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 the 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 periods presented, 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. We recognized $43 million in favorable fair value adjustments to Gin Mare’s contingent consideration liability during fiscal 2025.
Current wording
During fiscal 2023, we acquired the Gin Mare brand (Gin Mare). The purchase price consisted of cash paid at the acquisition date plus contingent consideration that is payable in cash upon exercise by the sellers no later than July 2027. We recognized $43 million and $15 million in favorable fair value adjustments to Gin Mare’s contingent consideration liability during fiscal 2025 and fiscal 2026, respectively. This adjustment removes the fair value impact from our other expense (income), net and operating income for the periods presented.
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 transition services agreements (TSAs) related to distribution services in certain markets for these businesses. This adjustment removes the net sales, cost of sales, operating expenses, and operating income recognized pursuant to the TSAs for the non-comparable period, which is activity from fiscal 2025.
Previous wording
During fiscal 2024, we recognized a gain of $7 million on the sale of certain fixed assets related to a divested mill. During 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 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
1 Announced the end of the sales, marketing, and distribution relationship with Korbel Champagne Cellars effective June 30, 2025.
Current wording
During 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 activity from July through April of fiscal 2025 and fiscal 2026.
Previous wording
During fiscal 2024, we recognized a non-cash impairment charge of $7 million for an immaterial discontinued brand name. During fiscal 2025, we recognized a non-cash impairment charge of $47 million for the Gin Mare brand name. See “Critical Accounting Policies and Estimates” below and Notes 4 and 17 to the Consolidated Financial Statements for more information.
Current wording
During fiscal 2025, we recognized a non-cash impairment charge of $47 million for the Gin Mare brand name. During fiscal 2026, we recognized non-cash impairment charges of $45 million and $87 million for the Gin Mare and Diplomático brand names, respectively. See “Critical Accounting Policies and Estimates” below and Notes 4 and 16 to the Consolidated Financial Statements for more information.
Previous wording
“Restructuring initiative.”During 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 $63 million 1 impact from our cost of sales, operating expenses, and operating income from the third and fourth quarters of fiscal 2025. See Notes 6 and 21 to the Consolidated Financial Statements for more information.
Current wording
“Restructuring initiative.”During 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. In fiscal 2025, we incurred $63 million 1 in charges related to the restructuring initiative. During fiscal 2026, we incurred $19 million in restructuring and other charges associated with this initiative and completed the sale of Brown-Forman Cooperage facility and related assets. This adjustment removes the restructuring initiative impact from our cost of sales, operating expenses and operating income for the periods presented. See Note 6 to the Consolidated Financial Statements for more information.
Previous wording
We use the non-GAAP measure “organic change,” along with other metrics, to: (a) understand our performance from period to period on a consistent basis; (b) compare our performance to that of our competitors; (c) calculate components of management incentive compensation; (d) plan and forecast; and (e) communicate our financial performance to the Board of Directors, stockholders, and the investment community. We provide reconciliations of the “organic change” in certain line items of the statements of operations to their nearest GAAP measures in the tables under “Results of Operations - Fiscal 2025 Brand Highlights,” “Results of Operations - Fiscal 2025 Market Highlights,” and “Results of Operations - Year-Over-Year Comparisons.” We have consistently applied the adjustments within our reconciliations in arriving at each non-GAAP measure. We believe these non-GAAP measures are useful to readers and investors because they enhance the understanding of our historical financial performance and comparability between periods. When we provide guidance for organic change in certain measures of the statements of operations, we do not provide guidance for the corresponding GAAP change, as the GAAP
Current wording
We use the non-GAAP measure “organic change,” along with other metrics, to: (a) understand our performance from period to period on a consistent basis; (b) compare our performance to that of our competitors; (c) calculate components of management incentive compensation; (d) plan and forecast; and (e) communicate our financial performance to the Board of Directors, stockholders, and the investment community. We provide reconciliations of the “organic change” in certain line items of the statements of operations to their nearest GAAP measures in the tables under “Results of Operations - Fiscal 2026 Brand Highlights,” “Results of Operations - Fiscal 2026 Market Highlights,” and “Results of Operations - Year-Over-Year Comparisons.” We have consistently applied the adjustments within our reconciliations in arriving at each non-GAAP measure. We believe these non-GAAP measures are useful to readers and investors because they enhance the understanding of our historical financial performance and comparability between periods. When we provide guidance for organic change in certain measures of the statements of operations, we do not provide guidance for the corresponding GAAP change, as the GAAP measure will include items that are difficult to quantify or predict with reasonable certainty, such as foreign exchange, which could have a significant impact to our GAAP income statement measures.
Previous wording
1 This adjustment comprises $60 million of costs included in restructuring and other charges and $3 million of restructuring-related inventory charges included in cost of sales.
Current wording
1 This amount comprises $60 million of costs included in restructuring and other charges and $3 million of restructuring-related inventory charges included in cost of sales.
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, and Canada. 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 Spain. This aggregation represents our net sales of branded products to these markets.
Previous wording
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.
Current wording
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.
Previous 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.
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 (JDCC)1, and other malt- and spirit-based Jack Daniel’s RTDs, along with Jack Daniel’s Winter Jack RTP.
Previous 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).
Current wording
•“Rest of Portfolio” includes Diplomático, Gin Mare, Chambord, other agency brands (brands we do not own, but sell in certain markets), Korbel California Champagnes and Korbel Brandy 1, Fords Gin, Finlandia Vodka (which was divested on November 1, 2023), and Sonoma-Cutrer (which was divested on April 30, 2024).
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 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 Bonded Series, Jack Daniel’s Sinatra Select, Jack Daniel’s 10-Year-Old Tennessee Whiskey, Jack Daniel’s American Single Malt, Jack Daniel’s 14-Year-Old Tennessee Whiskey, Jack Daniel’s 12-Year-Old Tennessee Whiskey, and other Jack Daniel’s expressions.
Previous wording
Below, we discuss the significant developments in our business during fiscal 2024 and fiscal 2025. These developments relate to divestitures, Gin Mare impairment and earn-out valuation, the restructuring initiative, innovation, and capital deployment.
Current wording
Below, we discuss the significant developments in our business during fiscal 2025 and fiscal 2026. These developments relate to divestitures, brand name impairments and earn-out valuation, the restructuring initiative, the United States distributor evolution, innovation, and capital deployment.
Previous wording
During fiscal 2024, we sold the Finlandia vodka business for $196 million cash and entered into a related TSA for this business. This transaction resulted in a pre-tax gain of $92 million. The absence of the brand negatively impacted our net sales and operating income, though positively impacted gross margin for fiscal 2025.
Current wording
During fiscal 2024, we sold the Sonoma-Cutrer wine business and entered into a TSA, which ended in August 2024. During fiscal 2026, we ended the Korbel relationship, effective June 30, 2025. The absence of these brands negatively impacted our net sales and operating income, but positively impacted our gross margin for fiscal 2026.
Previous wording
During fiscal 2025, we recognized a non-cash impairment charge of $47 million for the Gin Mare brand name, largely reflecting a decline in our financial forecast assumptions due to the more challenging macroeconomic environment in Europe. Given this, we also lowered the financial forecast assumptions used to estimate the fair value of Gin Mare’s contingent consideration liability, which is remeasured to fair value on a recurring basis. As a result, we recognized $43 million in favorable fair value adjustments to Gin Mare’s contingent consideration liability during fiscal 2025. The net impact of these non-cash fair value adjustments and impairment charges negatively impacted our operating expenses and operating income for fiscal 2025. See Notes 4 and 17 to the Consolidated Financial Statements for more information.
Current wording
During fiscal 2025, we recognized a non-cash impairment charge of $47 million for the Gin Mare brand name. During fiscal 2026, we recognized non-cash impairment charges of $45 million and $87 million for the Gin Mare and Diplomático brand names, respectively. These brand name impairments over the past two fiscal years largely reflect a decline in our forecast assumptions due to the softening category outlook and challenging macroeconomic environment in many of our top markets for these brands. Given this, during fiscal 2025 and fiscal 2026, we also lowered the financial forecast assumptions used to estimate the fair value of Gin Mare’s contingent consideration liability, which is remeasured to fair value on a recurring basis. As a result, we recognized $43 million and $15 million in favorable fair value adjustments to Gin Mare’s contingent consideration liability during fiscal 2025 and fiscal 2026, respectively. The net impact of these non-cash impairment charges and fair value adjustments negatively impacted our operating expenses and operating income for fiscal 2025 and 2026. See Notes 4 and 16 to the Consolidated Financial Statements for more information.
Previous wording
During 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. These initiatives resulted in charges of $63 million in fiscal 2025. This comprises $60 million of costs included in restructuring and other charges and $3 million of restructuring-related inventory charges included in cost of sales. See Note 6 to the Consolidated Financial Statements for more information.
Current wording
During 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 fiscal 2026, we incurred additional restructuring charges associated with this initiative and completed the sale of the Brown-Forman Cooperage facility and related assets. While these actions negatively impacted our operating expenses and operating income for fiscal 2026, we benefited from lower restructuring costs when compared to the same prior-year period. See Note 6 to the Consolidated Financial Statements for more information.
Previous wording
◦In fiscal 2025, we launched Jack Daniel’s 14 Year Old in the United States.
Current wording
◦In fiscal 2025, we launched Jack Daniel’s 14-Year-Old Tennessee Whiskey in the United States.
Previous wording
◦In fiscal 2024, we continued the international launch of Jack Daniel’s Tennessee Apple, expanding to certain developed international and emerging markets. Jack Daniel’s Bonded Rye - Tennessee Rye Whiskey and Jack Daniel’s Single Barrel - Barrel Proof Rye were launched in the United States and we launched Jack Daniel’s American Single Malt in Travel Retail.
Current wording
◦In fiscal 2026, we launched Jack Daniel’s Tennessee Blackberry in the United States and in certain developed international and emerging markets. We also launched Jack Daniel’s Single Barrel Heritage Barrel in the United States.
Previous wording
•In fiscal 2025, we launched Woodford Reserve Double Double Oaked across the United States.
Current wording
•In fiscal 2025, we launched Woodford Reserve Double Double Oaked in the United States.
Previous wording
We have focused our capital deployment initiatives on (a) investing fully in our existing business, (b) continuing our acquisitions and divestitures strategy, and (c) returning cash to our stockholders.
Current wording
We have focused our capital deployment initiatives on investing fully in our existing business and returning cash to our stockholders.
Previous wording
•Investments. During fiscal 2024 and fiscal 2025, our capital expenditures totaled $395 million and focused on enabling the growth of our whiskey, tequila, and rum brands. This included completing a $125 million expansion of our bourbon making capacity in Kentucky and constructing additional barrel warehouses for Jack Daniel’s, Woodford Reserve, Glenglassaugh, Diplomatico, and our tequilas.
Current wording
•Investments. During fiscal 2025 and fiscal 2026, our capital expenditures totaled $274 million and focused on enabling the growth of our whiskey and tequila brands. This included completing a $50 million expansion of our scotch-making capacity in Scotland. Additionally, we constructed additional barrel warehouses for Jack Daniel’s, Woodford Reserve, Glenglassaugh, Diplomatico, and our tequilas.
Previous wording
•Cash returned to stockholders. During fiscal 2024 and fiscal 2025, we returned a total of $1.2 billion to our stockholders through $824 million in regular dividends and $400 million in share repurchases.
Current wording
•Cash returned to stockholders. During fiscal 2025 and fiscal 2026, we returned a total of $1.2 billion to our stockholders through $847 million in regular dividends and $400 million in share repurchases.
Previous wording
During fiscal 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 fiscal 2026, the operating environment remained challenging due to ongoing macroeconomic pressures and geopolitical instability, which we believe negatively impacted consumer behavior and beverage alcohol consumption, particularly within developed markets.
Previous wording
•We delivered net sales of $4.0 billion, a decrease of 5% compared to fiscal 2024. 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, partially offset by higher volumes. Organic net sales increased 1% compared to fiscal 2024.
Current wording
•We delivered net sales of $3.9 billion, a decrease of 1% compared to fiscal 2025. The decrease was driven by the negative effect of acquisitions and divestitures, partially offset by the positive effect of foreign exchange and higher volumes.
Previous wording
◦From a geographic perspective, net sales declined across geographic aggregations.
Current wording
◦From a geographic perspective, net sales declines in the United States were more than offset by growth in Emerging markets and the Travel Retail channel, while Developed International markets were flat. In addition, our results were negatively impacted by declines in used barrel sales.
Previous wording
•We delivered gross profit of $2.3 billion, a decrease of 7% compared to fiscal 2024. Gross margin decreased to 58.9% in fiscal 2025, down 1.5 percentage points from 60.5% in fiscal 2024. The decrease in gross margin was driven by higher costs, the negative effect of foreign exchange, and the negative effect of the restructuring initiative, partially offset by favorable price/mix, the impact of JDCC, and the positive effect of acquisitions and divestitures.
Current wording
•We delivered gross profit of $2.4 billion, an increase of 2% compared to fiscal 2025. Gross margin increased to 60.5% in fiscal 2026, up 1.6 percentage points from 58.9% in fiscal 2025. The increase in gross margin was driven by the positive effect of acquisitions and divestitures, the positive effect of foreign exchange, and lower costs.
Previous wording
•We delivered diluted earnings per share of $1.84, a decrease of 14% compared to fiscal 2024, driven by the decrease in operating income, partially offset by the gain on sale of our investment in Duckhorn and a lower effective tax rate.
Current wording
•We delivered diluted earnings per share of $1.53, a decrease of 17% compared to fiscal 2025, driven by lower operating income and the absence of the gain on the sale of our investment in The Duckhorn Portfolio, Inc. (Duckhorn).
Previous wording
•Our return on average invested capital decreased to 14.4% in fiscal 2025, compared to 17.3% in fiscal 2024. This decrease was driven by lower operating income and higher invested capital, partially offset by the gain on sale of our investment in Duckhorn and a lower effective tax rate.
Current wording
•Our return on average invested capital decreased to 11.9% in fiscal 2026, compared to 14.4% in fiscal 2025. This decrease was driven by lower operating income and the absence of the gain on the sale of our investment in Duckhorn, partially offset by the benefit of a lower effective tax rate.
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
•France’s net sales were flat as the positive contribution from Diplomático was offset by lower volumes of JDTW and JDTH.
Current wording
•Spain’s net sales were flat as the positive effect of foreign exchange and higher volumes of JDTA offset JDTW declines.
Previous wording
•Net sales in the Rest of Emerging declined 2%, led by the divestiture of Finlandia and lower volumes of the Jack Daniel’s family of brands in Chile. The decline was partially offset by volume growth of JDTW due to an estimated net increase in distributor inventories in the United Arab Emirates and Sub-Saharan Africa.
Current wording
•Net sales in the Rest of Emerging increased 16% due to broad-based volume gains of the Jack Daniel’s family of brands, led by the United Arab Emirates and the rest of Latin America, in addition to an estimated net increase in distributor inventories and the positive effect of foreign exchange.
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 Gentleman Jack increased 4%, driven by higher prices and volumes in Türkiye and volumetric growth in Germany, partially offset by the negative effect of foreign exchange.
Current wording
•Net sales for Gentleman Jack declined 1%, driven by lower volumes in the United States, partially offset by higher volumes in Türkiye and the positive effect of foreign exchange.
Previous wording
•The JD RTD/RTPbrands net sales decreased 8%, driven by the impact of the JDCC business model change, the negative effect of foreign exchange, and declines in Germany. The decrease was 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
•The JD RTD/RTPbrands net sales decreased 3%, driven by declines in the United States and Canada. These declines were partially offset by the positive effect of foreign exchange.
Previous wording
Net sales of $4.0 billion decreased 5%, or $203 million, in fiscal 2025 compared to fiscal 2024, as unfavorable volume was partially offset by favorable price/mix. Volume declined 7% driven by the negative effect of acquisitions and divestitures and the JDCC business model change, partially offset by higher volumes of New Mix, JDTW, and Woodford Reserve. Price/mix increased 2% driven by JDCC, the positive effect of acquisitions and divestitures, and positive portfolio mix from Woodford Reserve, partially offset by the negative effect of foreign exchange and the unfavorable portfolio mix from New Mix. See “Results of Operations - Fiscal 2025 Market Highlights” and “Results of Operations - Fiscal 2025 Brand Highlights” above for details on the factors contributing to the change in reported net sales for fiscal 2025.
Current wording
Net sales of $3.9 billion decreased 1%, or $47 million, in fiscal 2026 compared to fiscal 2025, driven by unfavorable price/mix, partially offset by higher volumes. Volume increased 2% driven by New Mix and the launch of JDTB, due in part to a net increase in distributor inventories in the United States, partially offset by the end of the Korbel relationship and the Sonoma-Cutrer prior-year TSA, as well as lower volumes of JDTW and JD RTD/RTP. Price/mix declined 3% driven by unfavorable portfolio mix from New Mix and lower sales of used barrels and JDTW, partially offset by the positive effect of foreign exchange and the positive portfolio mix impact from JDTB, JD RTD/RTP, and Woodford Reserve. See “Results of Operations - Fiscal 2026 Market Highlights” and “Results of Operations - Fiscal 2026 Brand Highlights” above for details on the factors contributing to the change in reported net sales for fiscal 2026.
Previous wording
Cost of sales of $1.6 billion decreased $20 million, or 1%, in fiscal 2025 compared to fiscal 2024, as the favorable impact from volume was largely offset by unfavorable cost/mix. Volume declined 7% driven by the negative effect of acquisitions and divestitures and the JDCC business model change, partially offset by higher volumes of New Mix, JDTW, and Woodford Reserve. Cost/mix increased 6% driven by higher input costs, unfavorable fixed cost absorption related to decreased production levels of our full-strength portfolio, and JDCC.
Current wording
Cost of sales of $1.6 billion decreased $82 million, or 5%, in fiscal 2026 compared to fiscal 2025, driven by favorable cost/mix, partially offset by higher volumes. Volume increased 2% driven by New Mix and the launch of JDTB, partially offset by the end of the Korbel relationship and the Sonoma-Cutrer prior-year TSA, as well as lower volumes of JDTW and JD RTD/RTP. Cost/mix declined 7% driven by the end of the Korbel relationship, the absence of the Sonoma-Cutrer prior-year TSA, favorable portfolio mix from New Mix, the timing of cost fluctuations, and lower agave costs. These declines were partially offset by higher wood costs, the negative effect of foreign exchange, and unfavorable fixed cost absorption related to decreased production of our full-strength portfolio.
Previous wording
Gross profit of $2.3 billion decreased $183 million, or 7%, in fiscal 2025 compared to fiscal 2024. Gross margin decreased to 58.9% in fiscal 2025, down 1.5 percentage points from 60.5% in fiscal 2024. The decrease in gross margin was 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.
Current wording
Gross profit of $2.4 billion increased $35 million, or 2%, in fiscal 2026 compared to fiscal 2025. Gross margin increased to 60.5% in fiscal 2026, up 1.6 percentage points from 58.9% in fiscal 2025. The increase in gross margin was driven by the positive effect of acquisitions and divestitures, the positive effect of foreign exchange, and lower costs.
Previous wording
1“Other items” includes “restructuring initiative,” “foundation,” and “franchise tax refund.” See “Non-GAAP Financial Measures” above for additional details.
Current wording
1“Other items” includes “restructuring initiative,” “substitution drawback claims,” and “franchise tax refund.” See “Non-GAAP Financial Measures” above for additional details.
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Current report — wording carried from elsewhere
•“Spain”includes Spain and certain other surrounding territories.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
measure will include items that are difficult to quantify or predict with reasonable certainty, such as foreign exchange, which could have a significant impact to our GAAP income statement measures.
Previous report — wording carried elsewhere
On May 9, 2025, we announced the end of the sales, marketing, and distribution relationship with Korbel Champagne Cellars, effective June 30, 2025.