LOUISVILLE, KY — Brown‑Forman Corporation (NYSE: BFA, BFB) reported financial results for its second quarter and first half of fiscal 2025, ended October 31, 2024. Second quarter reported net sales decreased 1%¹ to $1.1 billion (+3% on an organic basis² ) compared to the same prior-year period. In the quarter, reported operating income increased 1% to $341 million (+5% on an organic basis) and diluted earnings per share increased 9% to $0.55.

For the first six months of the fiscal year, the company’s reported net sales decreased 5% to $2.0 billion​ (flat on an organic basis) compared to the same prior-year period.​ First half reported operating income decreased 7% to $622 million (-3% on an organic basis) and diluted earnings per share decreased 3% to​ $0.96.

Lawson Whiting, Brown‑Forman’s President and Chief Executive Officer shared, “Despite challenging economic conditions, our results for the first half of the fiscal year were in line with our expectations, and we anticipate a return to growth in fiscal 2025. We continue to expect our performance to accelerate​ through the second half of the year, driven by the strength of our strategy, our portfolio, our geographic​ breadth, and, of course, our talented people.”

​​First Half of Fiscal 2025 Highlights

• Net sales declines were largely due to the Finlandia and Sonoma‑Cutrer divestitures.
• Net sales declined across all geographic aggregations, but improved sequentially in international markets and the Travel Retail³ channel.
• Gross profit declined 8% (-4% organic) primarily due to the Finlandia and Sonoma‑Cutrer ​divestitures. Gross margin contracted 240 basis points largely related to the timing of input cost fluctuations coupled with high inventory levels, partially offset by favorable price/mix.
• Operating expenses declined by 10% (-4% organic).
• The Brown‑Forman Board of Directors increased the quarterly cash dividend for the 41st consecutive year.

​​First Half of Fiscal 2025 Brand Results

• Net sales for Whiskey³ products declined 1% (flat organic). Growth from Woodford Reserve and Old​ Forester in the United States was more than offset by declines of the other super-premium Jack​ Daniel’s expressions, The Glendronach, and Glenglassaugh. Jack Daniel’s Tennessee Whiskey benefited from sequential improvement to a decline of 1% (flat organic). An estimated net increase in distributor inventories positively impacted net sales.
• Net sales for the Tequila³ portfolio declined 17% (-17% organic). el Jimador’s net sales declined 16%​ (-16% organic) led by lower volumes in the United States and Mexico. Herradura’s net sales decreased 14% (-13% organic) led by lower volumes in Mexico within a challenging economic environment.
• Net sales for the Ready-to-Drink³ (RTD) portfolio declined 6% (+2% organic). Jack Daniel’s​ RTD/RTP portfolio decreased 8% (+1% organic) led by the impact of the Jack Daniel’s Country​ Cocktails business model change (JDCC)² . Lapping a strong double-digit comparison, net sales of New Mix declined 1% (+5% organic) driven by the negative effect of foreign exchange that was partially offset by market share gains.
• Rest of Portfolio's³ net sales declined 26% (flat organic) driven by the Finlandia and Sonoma‑Cutrer divestitures along with lower volumes of Korbel California Champagnes in the United States. The decline was partially offset by the positive contribution from Diplomático. An estimated net increase in distributor inventories positively impacted net sales.

​​​First Half of Fiscal 2025 Market Results

• In a challenging economic environment, net sales in the United States declined 7% (-3% organic)​ driven by lower volumes, led by Jack Daniel’s Tennessee Whiskey and Korbel California​ Champagnes, coupled with the divestiture of Sonoma‑Cutrer and the impact of JDCC. The declines were partially offset by growth of Woodford Reserve and Old Forester as these brands continued to outperform the US Whiskey category. An estimated net increase in distributor inventories positively impacted net sales.
• Industry trends remained soft in the Developed International³ markets as net sales declined 5% (-3%​ organic), though improved sequentially. The decrease was driven by lower volumes from the Jack​ Daniel’s family of brands, the absence of the Finlandia brand, and declines of Glenglassaugh due to​ the absence of the high-value cask sales in the same prior-year period. The decline was partially offset by higher volumes of Jack Daniel’s Tennessee Whiskey in Japan due to changes in distributor ordering patterns in the same prior-year period in advance of the transition to owned distribution on​ April 1, 2024.
• Lapping solid double-digit growth in the prior-year period, net sales in Emerging³ markets declined​ 3% (+6% organic). The decrease was driven by the Finlandia divestiture, the negative effect of​ foreign exchange (primarily reflecting the strengthening of the dollar against the Turkish lira), and​ declines of our Tequila portfolio in Mexico. The decline was partially offset by growth of the Jack​ Daniel’s family of brands in Brazil and Türkiye.
• The Travel Retail channel’s net sales declined 5% (-3% organic) led by lower volumes of the other super-premium Jack Daniel’s expressions and Woodford Reserve, as well as the Finlandia divestiture.​ The declines were partially offset by growth of Jack Daniel’s Tennessee Whiskey and Diplomático.

​​First Half of Fiscal 2025 Other P&L Items

• Gross profit decreased 8% (-4% organic) largely due to the Finlandia and Sonoma‑Cutrer divestitures.​ Gross margin contracted 240 basis points to 59.2% largely driven by the timing of input cost fluctuations coupled with high inventory levels, the negative effect of foreign exchange, and the impact of the transition services agreements (TSAs) related to the divestitures of Finlandia and​ Sonoma‑Cutrer, partially offset by favorable price/mix and the impact of​JDCC.
• Advertising expense decreased 7% (-4% organic) related to the phasing of spend which was more heavily weighted in the prior year period for super-premium Jack Daniel’s expressions and to support the launch of the Jack Daniel’s &​ Coca-Cola RTD in the United States, along with the impact of​recently divested brands.
• Selling, general, and administrative (SG&A) expenses decreased 4% (-3% organic) driven by lower compensation and benefit related expenses, tightened control of discretionary spend, and the absence of transaction-related expenses for the divestiture of Finlandia.
• The company’s operating income decreased 7% (-3% organic) with an​operating margin decrease of​ 60 basis points to 30.4%. The decrease in operating margin was largely driven by the timing of input cost fluctuations coupled with high inventory levels, the impact of the TSAs for the divestitures of​ Finlandia and Sonoma‑Cutrer, and the negative effect of foreign exchange. The decrease was partially offset by favorable price/mix, advertising and SG&A expense leverage, the Franchise tax refund² , and the gain on sale of the Alabama cooperage² .
• Diluted earnings per share decreased $0.03 driven primarily by the decrease in operating income partially offset by a lower effective tax rate.

​First Half of Fiscal 2025 Financial Stewardship
On November 22, 2024, the Brown‑Forman Board of Directors approved a 4% increase in the quarterly cash dividend to $0.2265 per share on its Class A and Class B common stock. The dividend is payable on​ January 2, 2025, to stockholders of record on December 6, 2024. Brown‑Forman, a member of the prestigious S&P 500 Dividend Aristocrats Index, has paid regular quarterly cash dividends for 81​consecutive years and has increased the regular dividend for 41 consecutive years.

​Fiscal 2025 Outlook
We anticipate a return to growth for organic net sales and organic operating income in fiscal 2025 driven by gains in international markets and the benefit of normalizing inventory trends. This outlook is tempered by our belief that global macroeconomic and geopolitical uncertainties will continue to create a challenging operating environment. Accordingly, we reiterate the following expectations for fiscal 2025:

• Organic net sales growth in the 2% to 4% range.
• Organic operating income growth in the 2% to 4% range.
• An effective tax rate to be in the range of approximately 21% to 23%.

The estimated capital expenditure range has been updated to $180 to $190 million from $195 to $205​ million.

​Click here for the full financial results.

​Conference Call Details
Brown‑Forman will host a conference call to discuss these results at 10:00 a.m. (ET) today. A live audio​ broadcast of the conference call, and the accompanying presentation slides, will be available via​ Brown‑Forman’s website, brown-forman.com, through a link to “Investors/Events & Presentations.” A​ digital audio recording of the conference call and the presentation slides will also be posted on the website and will be available for at least 30 days following the conference call.

Brown‑Forman Corporation has been building exceptional spirits brands for more than 150 years,​ responsibly upholding our founding promise of “Nothing Better in the Market.” Our portfolio of premium​ brands includes the Jack Daniel’s Family of Brands, Woodford Reserve, Herradura, el Jimador, Korbel,​ New Mix, Old Forester, The​ Glendronach, Glenglassaugh, Benriach, Diplomático Rum, Chambord, Gin Mare, Fords Gin, Slane, and Coopers’ Craft. With a team of approximately 5,700 employees worldwide,​ we proudly share our passion for premium beverages in more than 170 countries. Discover more about us at brown-forman.com and stay connected through LinkedIn, Instagram, and X.

​​Important Information on Forward-Looking Statements:
This press release contains statements, estimates, and projections that are “forward-looking statements” as defined under U.S. federal securities laws. Words such as “aim,” “ambition,” “anticipate,” “aspire,” “believe,” “can,” “continue,” “could,” “envision,” “estimate,”​ “expect,” “expectation,” “intend,” “may,” “might,” “plan,” “potential,” “project,” “pursue,” “see,” “seek,” “should,” “will,” “would,” and similar words indicate forward-looking statements, which speak only as of the date we make them. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. These risks and uncertainties include, but are​ not limited to:

• Our substantial dependence upon the continued growth of the Jack Daniel's family of brands
• Substantial competition from new entrants, consolidations by competitors and retailers, and other competitive activities, such as pricing​ actions (including price reductions, promotions, discounting, couponing, or free goods), marketing, category expansion, product​ introductions, or entry or expansion in our geographic markets or distribution networks
• Route-to-consumer changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, or result in​ higher fixed costs
• Disruption of our distribution network or inventory fluctuations in our products by distributors, wholesalers, or retailers
• Changes in consumer preferences, consumption, or purchase patterns – particularly away from larger producers in favor of small​ distilleries or local producers, or away from brown spirits, our premium products, or spirits generally, and our ability to anticipate or​ react to them; further legalization of marijuana; bar, restaurant, travel, or other on-premise declines; shifts in demographic or health and​ wellness trends; or unfavorable consumer reaction to new products, line extensions, package changes, product reformulations, or other​ product innovation
• Production facility, aging warehouse, or supply chain disruption
• Imprecision in supply/demand forecasting
• Higher costs, lower quality, or unavailability of energy, water, raw materials, product ingredients, or labor
• Risks associated with acquisitions, dispositions, business partnerships, or investments – such as acquisition integration, termination​ difficulties or costs, or impairment in recorded value
• Impact of health epidemics and pandemics, and the risk of the resulting negative economic impacts and related governmental actions
• Unfavorable global or regional economic conditions and related economic slowdowns or recessions, low consumer confidence, high​ unemployment, weak credit or capital markets, budget deficits, burdensome government debt, austerity measures, higher interest rates,​ higher taxes, political instability, higher inflation, deflation, lower returns on pension assets, or lower discount rates for pension​ obligations
• Product recalls or other product liability claims, product tampering,​contamination, or quality issues
• Negative publicity related to our company, products, brands, marketing,​executive leadership, employees, Board of Directors, family​ stockholders, operations, business performance, or prospects
• ​Failure to attract or retain key executive or employee talent
• Risks associated with being a U.S.-based company with a global business, including commercial, political, and financial risks; local​ labor policies and conditions; protectionist trade policies, or economic or trade sanctions, including additional retaliatory tariffs on​ American whiskeys and the effectiveness of our actions to mitigate the negative impact on our margins, sales, and distributors;​compliance with local trade practices and other regulations; terrorism,​ kidnapping, extortion, or other types of violence; and health​ pandemics
• Failure to comply with anti-corruption laws, trade sanctions and restrictions, or similar laws or regulations
• Fluctuations in foreign currency exchange rates, particularly a stronger U.S. dollar
• Changes in laws, regulatory measures, or governmental policies, especially those affecting production, importation, marketing, labeling,​ pricing, distribution, sale, or consumption of our beverage alcohol products
• Tax rate changes (including excise, corporate, sales or value-added taxes, property taxes, payroll taxes, import and export duties, and​ tariffs) or changes in related reserves, changes in tax rules or accounting standards, and the unpredictability and suddenness with which​ they can occur
• Decline in the social acceptability of beverage alcohol in significant markets
• Significant additional labeling or warning requirements or limitations on availability of our beverage alcohol products
• Counterfeiting and inadequate protection of our intellectual property rights
• Significant legal disputes and proceedings, or government investigations
• Cyber breach or failure or corruption of our key information technology systems​or those of our suppliers, customers, or direct and​ indirect business partners, or failure to comply with personal data protection laws
• Our status as a family “controlled company” under New York Stock Exchange rules, and our dual-class share structure

For further information on these and other risks, please refer to our public filings,​including the “Risk Factors” section of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.