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Brown-Forman Q1 Earnings: Will Brand Strength Outweigh Margin Woes?
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Key Takeaways
Brown-Forman projects Q1 revenues of $911M, suggesting 4.2% y/y growth, but earnings to fall 9.8%.
Premium brands, global reach and pricing strategy are expected to have supported the top-line performance.
Margins face pressure from weaker barrel sales, distributor shifts and lower-margin RTD offerings.
Brown-Forman Corporation (BF.B - Free Report) is slated to release first-quarter fiscal 2026 results on Aug. 28. The alcoholic beverage bigwig’s revenues and earnings per share are expected to decline year over year in the fiscal first quarter. The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $911 million, indicating a rise of 4.2% from the year-ago quarter’s actual.
The consensus mark for earnings is pegged at 37 cents per share, indicating a decrease of 9.8% from the year-ago period’s reported number. Earnings estimates for the fiscal first quarter have been unchanged in the past 30 days.
In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 13.9%. In the trailing four quarters, BF.B delivered an earnings surprise of 1.1%, on average.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Brown-Forman this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Brown-Forman has an Earnings ESP of -3.62% and a Zacks Rank of 4 (Sell).
Key Factors Likely to Affect BF.B’s Q1 Results
Brown-Forman has been benefiting from its premiumization strategy and strong brand investments. Its premium and super-premium brands have supported its performance for some time. BF.B is advancing its pricing strategy, global expansion and revenue-growth management initiatives. The company has been gaining traction from portfolio evolution, Jack Daniel's Country cocktail business model change and strong price mix.
BF.B has been taking actions to optimize its wood supply-chain strategy and improve operating costs. Gains in the international markets and the normalizing distributor inventory trends on a year-over-year basis will further aid. The impacts of such factors, coupled with gains across its premium and super-premium brands, diverse portfolio and extensive geographic reach, are likely to get reflected in the company’s top-line results in the fiscal first quarter.
Brown-Forman plans to leverage disciplined cost management throughout fiscal 2026, targeting lower operating expenses even as it continues to invest behind its brands. Management expects a modest reduction in SG&A, driven by strategic workforce initiatives implemented in fiscal 2025, actions that should yield annualized savings of roughly $70-$80 million, while supporting key marketing and innovation programs. Gains from the decline in operating expenses are expected to have benefited the margins and the bottom line in the to-be-reported quarter.
However, Brown-Forman anticipates a challenging operating environment throughout fiscal 2026, with limited visibility, driven by ongoing macroeconomic and geopolitical uncertainty. A tepid macroeconomic landscape, including softened consumer demand and dampened discretionary spending across key markets, has been weighing on Brown-Forman’s quarterly performance.
Additionally, Brown-Forman’s margin performance has deteriorated meaningfully, reflecting both cost pressures and evolving portfolio dynamics. Looking ahead, the company expects margin headwinds to persist due to the ramp-down of high-margin used barrel sales, the transition to new U.S. distributors and the growing mix of lower-margin RTD offerings — risks that can weigh on profitability even if top-line growth returns.
Brown-Forman is contending with consumer caution, the looming threat of new tariffs, and a downturn in non-branded used-barrel sales. The company expects consumer behavior and trade inventory levels to remain largely unchanged throughout fiscal 2026. The impacts of these trends are expected to be evident in the company’s margin and bottom-line results in the to-be-reported quarter.
BF.B’s Stock Performance & Valuation Picture
From a valuation perspective, Brown-Forman’s shares trade at a premium relative to the industry benchmarks. It has a forward 12-month price-to-earnings ratio of 18.61X, which is higher than the Beverages - Alcohol industry’s average of 15.24X.
Image Source: Zacks Investment Research
The recent market movements show that BF.B’s shares have lost 7.9% in the past three months compared with the industry's 5.5% decline.
Image Source: Zacks Investment Research
Stocks With the Favorable Combinations
Here are a few more companies, which, according to our model, have the right combination of elements to post an earnings beat:
The J. M. Smucker Co. (SJM - Free Report) currently has an Earnings ESP of +0.91% and a Zacks Rank of 3. The company is likely to register a decline in its bottom line when it reports first-quarter fiscal 2026 numbers. The Zacks Consensus Estimate for SJM’s quarterly revenues is pegged at $2.1 billion, which indicates a 0.02% rise from the prior-year quarter’s actual. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for J. M. Smucker’s quarterly earnings per share has moved up 2.1% in the past 30 days to $1.95, indicating a 20.1% decrease from the year-ago period’s reported figure. SJM has a trailing four-quarter earnings surprise of 8.7%, on average.
The Kroger Co. (KR - Free Report) currently has an Earnings ESP of +0.29% and a Zacks Rank of 3. The company is likely to register growth in its top and bottom lines when it reports second-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for Kroger’s quarterly revenues is pegged at $34.1 billion, which indicates an increase of 0.6% from the prior-year quarter’s actual.
The consensus estimate for Kroger’s quarterly earnings per share has moved up by a penny in the past seven days to $1.00, indicating 7.5% year-over-year growth. KR has a trailing four-quarter earnings surprise of 1.4%, on average.
The Coca-Cola Company (KO - Free Report) currently has an Earnings ESP of +0.03% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports third-quarter 2025 numbers. The consensus estimate for Coca-Cola’s quarterly revenues is pegged at $12.5 billion, which implies an increase of 5.6% from the prior-year quarter’s actual.
The Zacks Consensus Estimate for Coca-Cola’s quarterly earnings per share has been unchanged in the past 30 days at 78 cents, indicating a 2.6% increase from the year-ago period’s reported figure. KO has a trailing four-quarter earnings surprise of 4.9%, on average.
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Brown-Forman Q1 Earnings: Will Brand Strength Outweigh Margin Woes?
Key Takeaways
Brown-Forman Corporation (BF.B - Free Report) is slated to release first-quarter fiscal 2026 results on Aug. 28. The alcoholic beverage bigwig’s revenues and earnings per share are expected to decline year over year in the fiscal first quarter. The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $911 million, indicating a rise of 4.2% from the year-ago quarter’s actual.
The consensus mark for earnings is pegged at 37 cents per share, indicating a decrease of 9.8% from the year-ago period’s reported number. Earnings estimates for the fiscal first quarter have been unchanged in the past 30 days.
In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 13.9%. In the trailing four quarters, BF.B delivered an earnings surprise of 1.1%, on average.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Brown-Forman this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Brown-Forman has an Earnings ESP of -3.62% and a Zacks Rank of 4 (Sell).
Key Factors Likely to Affect BF.B’s Q1 Results
Brown-Forman has been benefiting from its premiumization strategy and strong brand investments. Its premium and super-premium brands have supported its performance for some time. BF.B is advancing its pricing strategy, global expansion and revenue-growth management initiatives. The company has been gaining traction from portfolio evolution, Jack Daniel's Country cocktail business model change and strong price mix.
BF.B has been taking actions to optimize its wood supply-chain strategy and improve operating costs. Gains in the international markets and the normalizing distributor inventory trends on a year-over-year basis will further aid. The impacts of such factors, coupled with gains across its premium and super-premium brands, diverse portfolio and extensive geographic reach, are likely to get reflected in the company’s top-line results in the fiscal first quarter.
Brown-Forman plans to leverage disciplined cost management throughout fiscal 2026, targeting lower operating expenses even as it continues to invest behind its brands. Management expects a modest reduction in SG&A, driven by strategic workforce initiatives implemented in fiscal 2025, actions that should yield annualized savings of roughly $70-$80 million, while supporting key marketing and innovation programs. Gains from the decline in operating expenses are expected to have benefited the margins and the bottom line in the to-be-reported quarter.
Brown-Forman Corporation Price and EPS Surprise
Brown-Forman Corporation price-eps-surprise | Brown-Forman Corporation Quote
However, Brown-Forman anticipates a challenging operating environment throughout fiscal 2026, with limited visibility, driven by ongoing macroeconomic and geopolitical uncertainty. A tepid macroeconomic landscape, including softened consumer demand and dampened discretionary spending across key markets, has been weighing on Brown-Forman’s quarterly performance.
Additionally, Brown-Forman’s margin performance has deteriorated meaningfully, reflecting both cost pressures and evolving portfolio dynamics. Looking ahead, the company expects margin headwinds to persist due to the ramp-down of high-margin used barrel sales, the transition to new U.S. distributors and the growing mix of lower-margin RTD offerings — risks that can weigh on profitability even if top-line growth returns.
Brown-Forman is contending with consumer caution, the looming threat of new tariffs, and a downturn in non-branded used-barrel sales. The company expects consumer behavior and trade inventory levels to remain largely unchanged throughout fiscal 2026. The impacts of these trends are expected to be evident in the company’s margin and bottom-line results in the to-be-reported quarter.
BF.B’s Stock Performance & Valuation Picture
From a valuation perspective, Brown-Forman’s shares trade at a premium relative to the industry benchmarks. It has a forward 12-month price-to-earnings ratio of 18.61X, which is higher than the Beverages - Alcohol industry’s average of 15.24X.
Image Source: Zacks Investment Research
The recent market movements show that BF.B’s shares have lost 7.9% in the past three months compared with the industry's 5.5% decline.
Image Source: Zacks Investment Research
Stocks With the Favorable Combinations
Here are a few more companies, which, according to our model, have the right combination of elements to post an earnings beat:
The J. M. Smucker Co. (SJM - Free Report) currently has an Earnings ESP of +0.91% and a Zacks Rank of 3. The company is likely to register a decline in its bottom line when it reports first-quarter fiscal 2026 numbers. The Zacks Consensus Estimate for SJM’s quarterly revenues is pegged at $2.1 billion, which indicates a 0.02% rise from the prior-year quarter’s actual. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for J. M. Smucker’s quarterly earnings per share has moved up 2.1% in the past 30 days to $1.95, indicating a 20.1% decrease from the year-ago period’s reported figure. SJM has a trailing four-quarter earnings surprise of 8.7%, on average.
The Kroger Co. (KR - Free Report) currently has an Earnings ESP of +0.29% and a Zacks Rank of 3. The company is likely to register growth in its top and bottom lines when it reports second-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for Kroger’s quarterly revenues is pegged at $34.1 billion, which indicates an increase of 0.6% from the prior-year quarter’s actual.
The consensus estimate for Kroger’s quarterly earnings per share has moved up by a penny in the past seven days to $1.00, indicating 7.5% year-over-year growth. KR has a trailing four-quarter earnings surprise of 1.4%, on average.
The Coca-Cola Company (KO - Free Report) currently has an Earnings ESP of +0.03% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports third-quarter 2025 numbers. The consensus estimate for Coca-Cola’s quarterly revenues is pegged at $12.5 billion, which implies an increase of 5.6% from the prior-year quarter’s actual.
The Zacks Consensus Estimate for Coca-Cola’s quarterly earnings per share has been unchanged in the past 30 days at 78 cents, indicating a 2.6% increase from the year-ago period’s reported figure. KO has a trailing four-quarter earnings surprise of 4.9%, on average.