Brown-Forman | 10-Q: FY2026 Q2 Revenue: USD 1.036 B

Revenue: As of FY2026 Q2, the actual value is USD 1.036 B.

EPS: As of FY2026 Q2, the actual value is USD 0.47.

EBIT: As of FY2026 Q2, the actual value is USD 328 M.

Segment Revenue

• United States: Net sales declined 9% due to the end of the Korbel relationship and lower volumes of Jack Daniel’s Tennessee Whiskey (JDTW), Herradura, and Jack Daniel’s Tennessee Honey (JDTH). These declines were partially offset by the launch of Jack Daniel’s Tennessee Apple (JDTA) and higher volumes of Woodford Reserve.
• Developed International: Net sales declined 4%, with Germany down 5%, Australia down 2%, the United Kingdom down 13%, France up 2%, and Canada down 62%.
• Emerging Markets: Net sales increased 10%, driven by Mexico (17%), Brazil (22%), and Poland (4%).
• Travel Retail: Net sales increased 7% due to higher volumes of JDTW and favorable timing of ordering patterns.
• Non-branded and Bulk: Net sales decreased 61% due to a decline in used barrel sales.

Operational Metrics

• Net Income: $394 million for the six months ended October 31, 2025, compared to $453 million for the same period in 2024.
• Gross Margin: Increased to 59.5% from 59.2% in the same period last year, driven by the positive effect of acquisitions and divestitures.
• Operating Income: $565 million for the six months ended October 31, 2025, a decrease of 9% from the previous year.
• Operating Margin: Decreased to 28.9% from 30.4% in the same period last year.

Cash Flow

• Cash Provided by Operating Activities: $292 million during the six months ended October 31, 2025, an increase of $163 million from the same period last year.
• Cash Used for Investing Activities: $23 million during the six months ended October 31, 2025.
• Cash Used for Financing Activities: $399 million during the six months ended October 31, 2025.

Unique Metrics

• Restructuring Initiative: Incurred $16 million in restructuring and other charges associated with the initiative during the first half of fiscal 2026.

Future Outlook and Strategy

• Core Business Focus: The company anticipates organic net sales and operating income to decline in the low-single digit range for fiscal 2026. The effective tax rate is expected to be in the range of approximately 21% to 23%.
• Non-Core Business: The estimated capital expenditures range has been updated to $110 to $120 million from $125 to $135 million.