Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

BF.B · Q4 2026 Earnings

Brown–Forman

Reported June 4, 2026

30-second summary

30-second take: Brown-Forman closed FY26 with Q4 reported net sales of $912M (+2% YoY, +2% organic), GAAP EPS of $0.12, and a Q4 operating margin of 10.5% — a sharp step-down driven principally by $132M of intangible impairment charges (Gin Mare $45M + Diplomático $87M). Full-year reported net sales of $3.93B fell 1% YoY but were flat on an organic basis, beating the "low-single-digit decline" FY26 organic guide, while FY26 organic operating income declined 2% — in-line with the low-single-digit decline guide. FY26 operating margin landed at 25.5%. The forward setup is harder than the FY26 landing: FY27 organic net sales are guided to approximately flat and FY27 organic operating income to decline 3% to 5% — a second consecutive year of organic OI contraction against flat sales, with FY27 CapEx guided to $60–70M versus FY26 actual of $107M (itself a beat vs. the $110–120M prior guide). Management is no longer trying to grow through this; they are sizing the business to a lower demand level.

Headline numbers

EPS

Q4 FY2026

$0.12

Revenue

Q4 FY2026

$0.91B

+2.0% YoY

Gross margin

Q4 FY2026

62.6%

Operating margin

Q4 FY2026

10.5%

Key financials

Q4 FY2026

Metric	Q4 FY2026	Q4 FY2025	YoY	Q3 FY2026	QoQ
Revenue	$0.91B	$0.89B	+2.0%	$1.06B	-13.6%
EPS	$0.12	$0.31	-61.3%	$0.58	-79.3%
Gross margin	62.6%	57.3%	+530bps	60.6%	+200bps
Operating margin	10.5%	22.9%	-1240bps	32.1%	-2160bps

Guidance

Company raised FY2026 sales and operating income guidance, but sharply cut capex; FY2027 guidance expects flattish organic sales and 3-5% operating income decline amid challenging macro environment.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Organic net sales growth	FY 2026	low-single digit decline	-1%	better than low-single digit decline (which typically implies -1% to -9%); actual -1% is at the upper end of guidance	Beat
Organic operating income decline	FY 2026	low-single digit decline	operating margin 25.5% FY2026 vs. prior pressure	Operating margin of 25.5% signals organic operating income substantially better than low-single digit decline guidance	Beat

New guidance

Metric	Period	Guide	YoY
Organic net sales growth	FY 2027	approximately flat	—
Organic operating income decline	FY 2027	3% to 5% range	—
Effective tax rate	FY 2027	approximately 20% to 22%	—
Capital expenditures	FY 2027	$60 to $70 million	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Capital expenditures	FY 2026	$110 to $120 million	$60 to $70 million	-$40 to -$50 million (42-45% reduction)	Lowered

Reaffirmed unchanged this quarter: Effective tax rate (approximately 20% to 22%)

Platform metrics

Q4 FY2026

Segment	Q4 FY2026	Q4 FY2025	YoY
Jack Daniel's Family depletions	28.3 million 9-liter cases	—	—
Total Portfolio shipments	47.8 million 9-liter cases	—	—
New Mix organic growth	33%	—	—

Profitability

Q4 FY2026

Segment	Q4 FY2026	Q4 FY2025	YoY
Operating cash flow	$1.0 billion	—	—
Free cash flow	$893 million	—	—

Other KPIs

Q4 FY2026

Segment	Q4 FY2026
Dividends returned to stockholders	$427 million
Share repurchases	$400 million
Consecutive years of dividend increases	42 years

Management tone

Press-release language frames FY27 as a year where "macroeconomic pressures and geopolitical instability continue to negatively impact consumer behavior and beverage alcohol consumption, particularly within developed markets." The release points to the previously announced restructuring initiative, U.S. distributor changes, and continued innovation (Jack Daniel's Tennessee Blackberry) as FY27 tailwinds — not a demand recovery. The implicit concession is that the next leg of value creation has to come from cost actions, route-to-consumer execution, and innovation, not category re-acceleration.

The forward narrative is about absorbing two more years of organic OI contraction while restructuring and the new U.S. distributor relationships work through. FY27 organic OI -3% to -5% on flat sales is the cleanest statement in the release that operating leverage is running in reverse, and the FY27 effective tax rate stepping to 20–22% from the FY26 actual of 19.3% removes a small non-operational tailwind going forward.

Recurring themes management leaned on this quarter:

Emerging markets resilience (Brazil +30%, Mexico +22%) offsetting developed market weaknessCyclical vs. structural debate on U.S. spirits decline—management maintains cyclical thesis despite market skepticismDistributor transition as unlock for U.S. growth through expanded dedication and coverageJack Daniels brand repositioning via new consumer communications and McLaren/music sponsorshipsPortfolio premiumization and super-premium line extensions as strategic prioritiesGeopolitical and tariff headwinds (Canada -60% due to U.S. tariffs, Germany/UK economic weakness)

Risks management surfaced:

Persistent U.S. market decline in low single digits with uncertain recovery timelineCanadian tariff impact expected to persist through fiscal 2026, offsetting non-U.S. brand growthUsed barrel sales returning to depressed levels—more than 50% decline vs. FY2025Inflation on input costs and lower production volumes offsetting price/mix gainsDistributor transition noise and phasing disruptions through first half of FY2026

Answers to last quarter's watch list

Q4 organic sales delta — Q4 reported net sales of $912M grew +2% YoY and +2% on an organic basis; FY26 reported was -1% (flat organic), beating the low-single-digit organic decline guide. The Q4 operating margin step-down (10.5% vs. FY26 25.5%) was driven principally by $132M of intangible impairment charges, not a sales-line miss.

Resolved positively

U.S. organic trajectory separation from reported — FY26 U.S. organic was flat (0%) vs. -7% reported, the cleanest illustration that underlying U.S. demand is stabilizing once the Korbel/Sonoma-Cutrer comparables clean up.

Resolved positively

Rest of Portfolio reported vs. organic gap — FY26 Rest of Portfolio organic +18% (vs. -31% reported) indicates agency-brand and Gin Mare/Diplomático momentum is intact; Gin Mare organic +30% and Diplomático organic +11% are the brand-level proof points.

Resolved positively

CFO succession — The press release did not name a successor or update the timeline.

Continue monitoring

Used-barrel disclosure — The press release notes non-branded and bulk net sales declined 68% (-68% organic) driven by lower used barrel sales, but did not provide a discrete dollar disclosure quantifying the FY26 drag or the FY27 baseline.

Continue monitoring

Tax rate as a recurring lever — FY26 effective tax rate came in at 19.3%, inside the most recent 19–21% guide. FY27 is guided 20–22%, a normalization upward of roughly 100bps at the midpoint — a modest forward headwind rather than a recurring tailwind. Status: Resolved (mildly negative going forward)

What to watch into next quarter

Q1 FY27 organic OI vs. flat sales: with FY27 guided to flat organic sales and -3% to -5% organic OI, the Q1 OI deleverage rate is the cleanest read on whether the FY27 guide is conservative or load-bearing.

Tequila trajectory through Q1 FY27: FY26 Tequila -6% organic with Herradura -10%; watch whether Q1 FY27 Tequila prints signal the Herradura pressure is widening rather than stabilizing.

U.S. organic — does flat hold?: FY26 U.S. organic at 0% is the basis for management's stabilization thesis. A return to negative organic in Q1 FY27 would reopen the cyclical-vs-structural debate.

CapEx execution: $60–70M FY27 CapEx is well below FY26 actual of $107M (itself a beat vs. the $110–120M prior guide). Watch the Q1 print for any commentary on deferred or canceled projects — the cleanest signal that the disinvestment is structural rather than tactical.

CFO succession: a Q1 FY27 announcement would remove overhang; further slippage would extend leadership uncertainty into the FY27 restructuring execution year.

Restructuring savings disclosure: management cited the "previously announced restructuring initiative and U.S. distributor changes" as FY27 tailwinds. Watch Q1 for a discrete dollar quantification of expected FY27 savings — without it, the -3% to -5% organic OI guide is harder to underwrite.

Sources

Brown-Forman FY26 Q4 press release: https://www.sec.gov/Archives/edgar/data/14693/000001469326000018/fy26_q4xerevergreen.htm
Tapebrief prior coverage: BF.B Q3 FY2026, Q2 FY2026, Q1 FY2026, Q4 FY2025 briefs

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