An American spirits maker whose portfolio is led by Jack Daniel's Tennessee Whiskey, the world's top-selling American whiskey, along with Woodford Reserve, Old Forester, Herradura, and el Jimador. Founded in 1870 in Louisville, Kentucky, by George Garvin Brown, who pioneered selling bourbon in sealed bottles, it later bought the Jack Daniel's distillery in 1956 and is still controlled by the Brown family. Its name came from George's 1890 partnership with his accountant and friend, George Forman.
Brown‑Forman’s FY2026 operating income fell 10% as $132M in brand impairments and a 9% rise in SG&A offset a gross margin recovery.
Brown‑Forman’s largest brand, Jack Daniel’s Tennessee Whiskey, lost ground again, and the company wrote down two acquisitions. slipped 1% to $3.9 billion, but rose 1.6 points to 60.5% as the company shed lower‑margin agency brands and input costs eased; even so, fell 10% to $1.0 billion after $132 million in non‑cash charges for Gin Mare and Diplomático. The company enters fiscal 2027 expecting organic sales to be flat and operating income to decline further.
Key takeaways
Jack Daniel’s Tennessee Whiskey volumes fell, driving a 1% decline in reported to $3.9 billion, as growth from New Mix and the launch of Jack Daniel’s Tennessee Blackberry could not fully offset the brand’s weakness and the end of the Korbel relationship.
expanded 1.6 percentage points to 60.5%, recovering from 58.9% in fiscal 2025, helped by the exit of lower‑margin agency brands, favorable foreign exchange, and lower input costs.
fell 10% to $1.0 billion, weighed down by $132 million in non‑cash charges for the Gin Mare and Diplomático brand names and a 9% increase in expenses.
Section summaries
Business
Brown-Forman is a leading American-owned premium-plus spirits company, anchored by Jack Daniel's, with a diverse portfolio sold in over 170 countries.
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The company's portfolio is led by the Jack Daniel's family of brands, the #1 selling American whiskey globally, and includes other key brands like Woodford Reserve, Old Forester, Herradura, and el Jimador.
The United States is its largest market at 42% of fiscal 2026 , with a significant multi-year transformation of its U.S. distribution network underway involving new distributors across 25 markets.
The U.S. business, 42% of , fell 8% through the first nine months, driven by the end of the Korbel relationship, the absence of Sonoma‑Cutrer, and lower volumes of Jack Daniel’s and Herradura, while emerging markets grew 16%, led by Mexico and Brazil.
rose 67% to $1.0 billion as requirements eased, and the company returned $827 million to shareholders through dividends and $400 million in share repurchases.
For fiscal 2027, management guided to be approximately flat and organic to decline 3% to 5%, citing a persistently challenging macroeconomic environment.
What changed
The U.S. distributor rebuild flagged in Q1 FY2026 did not signal a genuine demand recovery; U.S. fell 8% through nine months, and Jack Daniel’s Tennessee Whiskey volumes continued to decline.
, which had been under pressure from high‑cost and flagged as a key watch item, recovered to 60.5% for the full year, up from 58.9% in fiscal 2025, as the exit of lower‑margin agency brands and easing input costs provided relief.
The $47 million Gin Mare flagged in fiscal 2025 was not a one‑time event; the company recorded an additional $45 million impairment for Gin Mare and a new $87 million impairment for Diplomático in fiscal 2026, totaling $132 million in non‑cash charges.
The restructuring program launched in fiscal 2025 with a 12% workforce reduction and cooperage closure delivered lower charges in fiscal 2026 ($19 million in Q3 vs. $33 million a year ago), but the guided 3–5% decline in organic for fiscal 2027 suggests the savings have not yet offset broader headwinds.
The risk of new U.S. tariffs on Mexican and Canadian imports, disclosed in Q3 FY2025, materialized into a persistent ; the filing cites historically high U.S. tariff rates and retaliatory measures like the removal of American alcohol from Canadian shelves as material risks to costs and market access.
What to watch
Whether the guided 3–5% decline in organic for fiscal 2027 proves accurate, or whether the U.S. business deterioration and tariff costs drive a steeper drop.
Whether Jack Daniel’s Tennessee Whiskey volumes stabilize after another year of decline, or whether the brand’s weakness continues to offset growth in emerging markets and the premium bourbon portfolio.
Whether the $132 million in Gin Mare and Diplomático impairments are the final write‑downs, or whether further charges signal deeper integration challenges for the acquired brand portfolio.
Whether can hold at or above 60.5% in fiscal 2027 without the benefit of shedding lower‑margin agency brands, as tariffs on Mexican and Canadian imports raise input costs.
Outside the U.S., the company uses a mix of owned distribution in 17 countries and third-party partners, and recently launched its own distribution company in Italy.
Brown-Forman is a '' with the Brown family holding over 50% of voting stock, and it employs approximately 4,900 people globally.
The company emphasizes a long-term strategy focused on , product innovation, responsible marketing, and sustainability investments, including a new anaerobic digester at the Jack Daniel Distillery.
Jack Daniel's brand health, escalating tariffs, and distribution consolidation are the most material risks to revenue and margins.
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The business is heavily dependent on the Jack Daniel's family of brands, where any reputational damage or sustained sales decline would materially harm financial results.
New and retaliatory tariffs, including the removal of American alcohol from Canadian shelves in 2025 and historically high U.S. tariff rates, pose a significant risk to costs, margins, and market access.
Consolidation among distributors and retailers increases buying power, shelf-space competition, and margin pressure, while transitions to owned distribution create operational disruption risks.
Shifts in consumer preferences toward local distilleries, health trends like GLP-1 drugs, or away from premium spirits could reduce demand, compounded by intense competition from new entrants in ready-to-drink and cannabis markets.
Production is concentrated at single sites for key brands, and forecasting errors for long-aged whiskey and agave-dependent tequila could lead to supply shortages or write-downs.
The Brown family's control of a majority of voting stock through a dual-class share structure allows it to determine corporate outcomes, potentially misaligning with other investors' interests and deterring takeovers.
The company owns distilleries, bottling plants, and visitor centers globally, supplemented by leased offices and contract production in 11 countries.
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Company-owned production sites include distilleries, bottling plants, an RTD canning plant, warehousing, visitor centers, and retail shops.
Key U.S. properties are in Louisville (corporate offices, Old Forester distilling), Lynchburg (Jack Daniel’s), and Woodford County (Woodford Reserve).
International properties include facilities in France, Mexico (Herradura, el Jimador, RTD canning), Ireland (Slane), Scotland (The Glendronach, Benriach, Glenglassaugh), and Panama (Diplomático).
The company leases office space in the U.S. and over 50 other countries for sales, marketing, and administrative functions.
Contract production agreements are in place in Australia, Belgium, China, Ireland, Latvia, Mexico, the Netherlands, Spain, the UK, the US, and Venezuela.
Management believes all facilities are in good condition and adequate for the business.
We operate in a litigious environment and we are sued in the normal course of business. We do not anticipate that any pending suits will have, individually or in the aggregate, a material adverse effect on our financial position, results of operations, or liquidity.
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We operate in a litigious environment and we are sued in the normal course of business. We do not anticipate that any pending suits will have, individually or in the aggregate, a material adverse effect on our financial position, results of operations, or liquidity.
Net sales fell 1% to $3.9B; gross margin rose 1.6pp to 60.5%, but higher impairment charges and SG&A drove a 10% drop in operating income.
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Reported declined 1% to $3.9 billion, as the end of the Korbel relationship and lower JDTW volumes offset growth from New Mix and the launch of Jack Daniel's Tennessee Blackberry.
expanded 1.6 percentage points to 60.5%, benefiting from the exit of lower-margin agency brands, favorable foreign exchange, and lower costs.
fell 10% to $1.0 billion, primarily due to $132 million in non-cash charges for Gin Mare and Diplomático brand names and a 9% increase in SG&A expenses.
rose to $1.0 billion, driven by lower , while the company returned $827 million to shareholders via dividends and $400 million in share repurchases.
For fiscal 2027, the company expects organic to be approximately flat and organic to decline 3% to 5%, citing a persistently challenging macroeconomic environment.
Management and EY affirmed effective internal controls and fair financial statements, while FY2026 net income fell to $715M amid brand impairments.
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declined to $715M in FY2026 from $869M in FY2025, driven by a $132M of Gin Mare and Diplomático brand names and lower .
decreased 1% to $3,928M, with U.S. sales falling to $1,649M while Emerging markets grew to $974M.
The company recognized non-cash charges of $45M for Gin Mare and $87M for Diplomático due to softening category outlooks and challenging macroeconomic conditions.
Cash provided by operating activities rose to $1,000M, supported by a $67M change in other operating assets and liabilities and lower build.
Total increased slightly to $4,020M, as and currency translation gains offset $400M in treasury stock acquisitions and $427M in dividends.
Ernst & Young LLP issued unqualified opinions on both the consolidated financial statements and the effectiveness of internal control over financial reporting as of April 30, 2026.