BF-B 8-K: Smart Summary

Brown-Forman Corporation (NYSE: BFA, BFB) reported fiscal year 2026 results for the twelve months ended April 30, 2026, with full-year reported net sales declining 1% to $3.9B and reported operating income declining 10% to $1B. For the fourth quarter, reported net sales increased 2% to $912M while reported operating income decreased 53% to $96M. The company also provided fiscal 2027 outlook and detailed brand and geographic performance.

• Full-year reported net sales decreased 1% to $3.9B (flat on an organic basis); Q4 reported net sales increased 2% to $912M (+2% organic)
• Full-year gross profit increased 2% to $2.4B; gross margin expanded 160 basis points to 60.5% vs. 58.9% prior year
• Full-year reported operating income decreased 10% to $1B (-2% organic); operating margin decreased 240 basis points to 25.5% vs. 27.9% prior year
• Full-year net income decreased 18% to $715M; Q4 net income decreased 63% to $54M
• Full-year diluted EPS decreased 17% to $1.53 vs. $1.84 prior year; Q4 diluted EPS decreased 62% to $0.12 vs. $0.31 prior year
• Full-year SG&A expenses increased 9% (+7% organic) to $807M; advertising expenses decreased 4% (-5% organic) to $462M
• Cash flows from operations grew $402M to $1B; free cash flow increased $462M to $893M
• Full-year effective tax rate was 19.3% vs. 19.6% prior year; Q4 effective tax rate was 25.1% vs. 20.2% prior year
• Company incurred $19M in charges related to the strategic restructuring initiative announced in January 2025

• Whiskey net sales increased 3% (+1% organic); Jack Daniel's Tennessee Whiskey (JDTW) declined 2% (-4% organic) with shipments of 13.3 million cases (-3%); Woodford Reserve net sales increased 4% (+4% organic) with shipments of 1.9 million cases (+1%)
• Ready-to-Drink (RTD) net sales increased 11% (+7% organic); New Mix net sales increased 41% (+33% organic) with shipments of 13.8 million cases (+22%); JD RTD/RTP net sales decreased 3% (-5% organic) with shipments of 9.9 million cases (-4%)
• Tequila net sales decreased 4% (-6% organic); Herradura net sales declined 9% (-10% organic) with shipments of 0.5 million cases (-11%); el Jimador net sales decreased 2% (-2% organic) with shipments of 1.3 million cases (-1%)
• Rest of Portfolio net sales declined 31% (+18% organic) driven by unfavorable impact of acquisitions and divestitures; Gin Mare net sales increased 36% (+30% organic); Diplomático net sales increased 17% (+11% organic)
• Non-branded and bulk net sales decreased 68% (-68% organic) driven by lower used barrel sales
• United States net sales declined 7% (flat organic); Developed International net sales were flat (-3% organic); Emerging markets net sales increased 14% (+12% organic); Travel Retail net sales increased 6% (+5% organic)

• Returned $827M to stockholders in fiscal 2026: $427M in regular quarterly dividends and $400M through share repurchase program (completed December 2025)
• Cash dividends paid per common share were $0.9150 in fiscal 2026 vs. $0.8886 in fiscal 2025
• Brown-Forman has paid regular quarterly cash dividends for 82 consecutive years and increased the regular dividend for 42 consecutive years; member of the S&P 500 Dividend Aristocrats Index
• Cash and cash equivalents at April 30, 2026 were $308M vs. $444M at April 30, 2025
• Long-term debt decreased to $2.1B at April 30, 2026 from $2.4B at April 30, 2025; short-term borrowings decreased to $68M from $312M
• Current portion of long-term debt was $351M at April 30, 2026 vs. $0 at April 30, 2025
• Capital expenditures were $107M in fiscal 2026 vs. $167M in fiscal 2025

• "We finished the fiscal year ahead of our expectations, driven by strong execution in our innovation portfolio, the early benefits of our U.S. route-to-market transformation, and strategic cost-restructuring initiatives," said President and Chief Executive Officer Lawson Whiting.
• "Our ability to grow cash flows from operations and free cash flow by more than $400M in a declining market speaks to the strength of our business and our commitment to a robust capital allocation strategy. While we expect continued market volatility and a challenging cost cycle in the year ahead, our performance this year proves we have the right people, brands, and strategy to navigate these challenges effectively," said President and Chief Executive Officer Lawson Whiting.

• Organic net sales expected to be approximately flat in fiscal 2027
• Organic operating income expected to decline in the 3% to 5% range in fiscal 2027
• Effective tax rate expected to be in the range of approximately 20% to 22% in fiscal 2027
• Capital expenditures planned to be in the range of $60 to $70M in fiscal 2027
• Company expects to benefit from previously announced restructuring initiative, U.S. distributor changes, and continued new product innovation including expansion of Jack Daniel's Tennessee Blackberry