Brown-Forman (BFB) Q1 2027 earnings summary

Executive summary

• Net sales declined 1% year-over-year to $911 million, mainly due to the end of the Korbel relationship and lower used barrel sales, partially offset by growth in Ready-to-Drink (RTD) products and Jack Daniel's Tennessee Blackberry.

• Operating income decreased 3% to $252 million, while diluted EPS increased 6% to $0.38, driven by improved operating performance, lower non-operating postretirement expense, and share repurchases.

• Gross margin expanded 40 basis points to 60.2%, primarily due to lower costs and favorable portfolio changes.

• Cash flow from operations increased $13 million to $173 million; free cash flow rose $32 million to $161 million.

• CEO Lawson Whiting announced his upcoming retirement, with a comprehensive search for his successor underway.

Financial highlights

• Net sales: $911 million, down 1% year-over-year.

• Gross profit: $549 million, down 1% year-over-year; gross margin: 60.2% (up 40 bps year-over-year).

• Operating income: $252 million, down 3% year-over-year; operating margin: 27.7% (down 50 bps year-over-year).

• Diluted EPS: $0.38, up 6% year-over-year.

• Free cash flow: $161 million, up from $129 million in the prior year.

Outlook and guidance

• Fiscal 2027 guidance reaffirmed: organic net sales expected to be approximately flat, with organic operating income projected to decline 3%–5%.

• Capital expenditures expected between $60 million and $70 million.

• Effective tax rate anticipated at 20%–22% for fiscal 2027.