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Louisville, KY, December 8, 2020 – Brown-Forman Corporation (NYSE: BFA, BFB) announced financial results for its second quarter and first half of fiscal 2021. For the second quarter, the company’s reported net sales1 of $985 million were essentially flat (+4% on an underlying basis2) compared to the same prior-year period. In the quarter, reported operating income decreased 6% to $330 million (+6% on an underlying basis) and diluted earnings per share declined 15% to $0.50.

For the first six months of the fiscal year, the company’s reported net sales decreased 1% to $1,738 million (+4% on an underlying basis) compared to the same prior-year period. Year-to-date reported operating income increased 19% to $717 million (+11% on an underlying basis) and diluted earnings per share grew 20% to $1.17.

Brown-Forman’s President and Chief Executive Officer Lawson Whiting stated, “We continue to be pleased with our underlying top-line growth in the first half. Notably, our business accelerated in the second quarter amidst an unprecedented environment. These results are a testament to the resilience of our people, the strength of our brands, and the agility that so many before us today have demonstrated over the company’s last 150 years. As the pandemic continues, our focus remains on prioritizing the safety of our employees, meeting the needs of our consumers and business partners, and pursuing our long-term strategy.”

First Half of Fiscal 2021 Highlights
• Underlying net sales grew 4% (-1% reported)
◦ The United States grew underlying net sales 9% (+3% reported) while our developed international3 markets grew underlying net sales 10% (+10% reported). Underlying net sales in our emerging markets were flat (-13% reported).
◦ Jack Daniel’s family of brands underlying net sales grew 2% (-3% reported). Underlying net sales growth from Jack Daniel’s RTDs3, Jack Daniel’s Tennessee Apple, Jack Daniel’s Tennessee Honey, and Gentleman Jack was partially offset by an unfavorable channel mix shift in Jack Daniel’s Tennessee Whiskey.
◦ Premium bourbons grew underlying net sales 22% (+18% reported) driven by sustained double-digit growth across Woodford Reserve and Old Forester.
◦ The tequila portfolio grew underlying net sales 13% (+5% reported) led by strong volume-driven increases from New Mix in Mexico and el Jimador in the United States, which additionally benefited from higher prices. Herradura’s underlying net sales declined 2% (-4% reported) as lower volumes, primarily in Mexico, more than offset double-digit growth in the United States.
◦ Non-branded and bulk underlying net sales declined 33% (-34% reported) primarily reflecting lower demand and pricing for used barrels.
• Underlying operating income increased 11% (+19% reported) driven primarily by operating expense leverage.
First Half of Fiscal 2021 Brand Results

The Jack Daniel’s family of brands underlying net sales growth was driven by Jack Daniel’s RTDs, the ongoing launch of Jack Daniel’s Tennessee Apple, and broad-based volume growth from Jack Daniel’s Tennessee Honey and Gentleman Jack. Underlying net sales decline for Jack Daniel’s Tennessee Whiskey was driven by lower volumes in certain emerging markets and our Travel Retail channel reflecting travel bans and other restrictions related to COVID-19, along with unfavorable channel mix effect in the United States and developed international markets related to significant restrictions in the on-premise channel.

Brown-Forman’s portfolio of premium bourbon brands sustained their double-digit underlying net sales growth. Woodford Reserve’s gains were fueled by strong consumer takeaway trends in the United States, slightly offset by volume declines in Travel Retail. Old Forester’s robust double-digit underlying net sales growth was powered by ongoing volumetric gains and favorable mix from the brand’s high-end expressions.

The company’s tequila brands contributed to underlying net sales growth through the first half led by higher volumes of New Mix in Mexico. el Jimador’s underlying net sales growth was driven by volumetric growth and higher pricing in the United States, while Herradura’s underlying net sales declines reflected lower volumes, primarily in Mexico, more than offsetting higher volumes, prices, and favorable product mix in the United States.

First Half of Fiscal 2021 Market Results

From a geographic perspective, underlying net sales growth in the United States and developed international markets was partially offset by declines in Travel Retail and used barrels.

In the United States, strong underlying net sales growth was led primarily by volumetric gains for our premium bourbons, Woodford Reserve and Old Forester, Jack Daniel’s RTDs, Jack Daniel’s Tennessee Honey, Gentleman Jack, Herradura, and el Jimador. These gains were partially offset by declines in Jack Daniel’s Tennessee Whiskey reflecting an unfavorable channel mix effect resulting from COVID-19 restrictions in the on-premise channel.

Double-digit underlying net sales growth in developed international markets was fueled by Jack Daniel’s RTDs, the launch of Jack Daniel’s Tennessee Apple in a number of countries, Jack Daniel’s Tennessee Honey, and Gentleman Jack.

The company’s emerging markets registered sequential improvement in the second quarter resulting in flat underlying net sales growth (-13% reported) for the first half of fiscal 2021 led by Brazil, Mexico, and Poland but offset by broad-based declines in Southeast Asia, Russia, India, and several Latin American markets as COVID-19 adversely affected these markets.

Underlying net sales in Travel Retail continued to be significantly impacted by the continuation of travel bans and restrictions.

First Half of Fiscal 2021 Other P&L Items

Volumes grew 15% led primarily by Jack Daniel’s RTDs and New Mix. Company-wide price/mix decreased 12% reflecting the portfolio mix shift with growth from lower-priced brands (Jack Daniel’s RTDs and New Mix) and unfavorable channel mix effect resulting from the COVID-19 related restrictions in the on-premise channel.

Underlying gross profit declined 1% (-6% reported) and reported gross margin contracted 350 basis points to 60.2% driven by higher input costs, lower fixed cost absorption, and the negative effect of both the portfolio and channel mix shift discussed above.

The company’s investment in underlying advertising declined 23% (-23% reported) reflecting the phasing of spend, a reduction in on-premise activations, and the cancellation of consumer events and sponsorships given the current environment. The company anticipates advertising investments to accelerate significantly over the balance of the fiscal year. Underlying SG&A declined 6% (-6% reported) driven by the tight management of discretionary spend.

Underlying operating income increased 11% (+19% reported) driven primarily by operating expense leverage, which we expect will reverse in the second half of the fiscal year.

Diluted earnings per share increased 20% to $1.17 including an estimated $0.19 per share gain from the sale of the Canadian Mist, Early Times, and Collingwood brands.

Financial Stewardship – 37th Year of Consecutive Increase in Regular Dividend

On November 19, 2020, the Brown-Forman Board of Directors announced a 3% increase in the regular quarterly cash dividend to $0.1795 per share on the Class A and Class B common stock. This marks the company’s 76th consecutive year of paying a dividend and 37th year of uninterrupted increases in their regular quarterly cash dividend. The quarterly cash dividend is payable on January 4, 2021, to stockholders of record on December 4, 2020.

Fiscal Year 2021 Outlook

The company continues to face substantial uncertainty in the rapidly evolving environment due to COVID-19 and its effect on the global economy. As a result of this ongoing uncertainty and expected volatility, the company is not providing quantitative guidance for fiscal year 2021. Jane Morreau, Executive Vice President and Chief Financial Officer, noted “We believe our financial and business fundamentals remain strong, allowing us to navigate this highly dynamic environment while remaining focused on our long-term strategic priorities.” Morreau added, “In our 150 year history, we have experienced many unforeseen turbulent events and have emerged stronger. We believe this time will be no different.”

Conference Call Details

Brown-Forman will host a conference call to discuss these results at 10:00 a.m. (EST) today. All interested parties in the United States are invited to join the conference call by dialing 888-624-9285 and asking for the Brown-Forman call. International callers should dial +1-706-679-3410. The company suggests that participants dial in ten minutes in advance of the 10:00 a.m. (EST) start of the conference call. A live audio broadcast of the conference call, and the accompanying presentation slides, will also be available via Brown-Forman’s Internet website,, 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.

For 150 years, Brown-Forman Corporation has enriched the experience of life by responsibly building fine quality beverage alcohol brands, including the Jack Daniel’s Tennessee Whiskey, Jack Daniel’s Tennessee RTDs, Jack Daniel’s Tennessee Honey, Jack Daniel’s Tennessee Apple, Jack Daniel’s Tennessee Fire, Gentleman Jack, Jack Daniel’s Single Barrel, Finlandia, Korbel, el Jimador, Woodford Reserve, Old Forester, Coopers’ Craft, Herradura, New Mix, Sonoma-Cutrer, Chambord, BenRiach, GlenDronach, Slane, and Fords Gin. Brown-Forman’s brands are supported by approximately 4,800 employees and sold in more than 170 countries worldwide. For more information about the company, please visit

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,” “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:
• Impact of health epidemics and pandemics, including the COVID-19 pandemic, and the resulting negative economic impact and related governmental actions
• Risks associated with being a U.S.-based company with global operations, 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 spirits 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; 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 that affect the production, importation, marketing, labeling, pricing, distribution, sale, or consumption of our beverage alcohol products
• Tax rate changes (including excise, sales, VAT, tariffs, duties, corporate, individual income, dividends, or capital gains) or changes in related reserves, changes in tax rules or accounting standards, and the unpredictability and suddenness with which they can occur
• Unfavorable global or regional economic conditions, particularly related to the COVID-19 pandemic, 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
• Dependence upon the continued growth of the Jack Daniel’s family of brands
• 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; legalization of marijuana use on a more widespread basis; shifts in consumer purchase practices from traditional to e-commerce retailers; 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
• Decline in the social acceptability of beverage alcohol in significant markets
• 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, labor, or finished goods
• Significant additional labeling or warning requirements or limitations on availability of our beverage alcohol products
• Competitors’ and retailers’ consolidation or 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
• Inventory fluctuations in our products by distributors, wholesalers, or retailers
• Risks associated with acquisitions, dispositions, business partnerships, or investments – such as acquisition integration, termination difficulties or costs, or impairment in recorded value
• Counterfeiting and inadequate protection of our intellectual property rights
• Product recalls or other product liability claims, product tampering, contamination, or quality issues
• Significant legal disputes and proceedings, or government investigations
• Cyber breach or failure or corruption of key information technology systems, or failure to comply with personal data protection laws
• 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
• 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.


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