Brown Forman Predicts Revenue and Profit Decline
On Thursday, Brown Forman announced that it anticipates a decrease in both annual revenue and profits due to soft consumer spending and uncertainties related to tariffs. The company is adjusting and sending out approximately 18% of its stock.
Concerns about a recession and potential product price increases stemming from the international trade war have negatively impacted consumer sentiment in the U.S. As a result, many are cutting back on non-essential items, including premium alcohol.
“For fiscal year 2026, we foresee a challenging operating environment because of macroeconomic and geopolitical volatility,” the company stated. It seems like consumer uncertainty will pose significant challenges.
The U.S. increased tariffs on steel and aluminum imports by 50%, and this has raised concerns for manufacturers producing items like canned goods.
Back in March, the liquor manufacturer noted that a Canadian province removing American liquor from its shelves was even more damaging than tariffs. Still, the company believes it can handle this blow since Canada represents only about 1% of its overall sales.
Interestingly, Brown Forman has seen some benefit from planned retaliatory tariffs by the European Union on American whiskey.
For the upcoming fiscal year, the owners of brands like Old Forester and Woodford Reserve predict that both organic net sales and operating income will decline in the low single digits.
In fiscal 2025, the company reported a modest 1% growth in organic net sales and a 3% increase in organic operating profit.
According to Conor Latigan, a premium consumer analyst, Brown Forman’s results indicate that consumer pressure is affecting discretionary budgets more than a decrease in demand for American luxury spirits.
For the quarter ending April 30th, Brown Forman’s revenue dropped by 7% to $894 million, falling short of the analyst average estimate of $967.4 million. The earnings per share of 31 cents also missed the expected 34 cents.
