Robust progress in rising markets and the launch of Jack Daniel’s Blackberry helped Brown‑Forman offset headwinds within the US, Europe and Canada.
Earlier this week, Jack Daniel’s proprietor Brown-Forman reported flat gross sales for the 9 months to 31 January 2026, with third-quarter (Q3) income up by 1%.
In a convention name for its Q3 outcomes on 4 March, Brown-Forman CEO Lawson Whiting identified that market circumstances have largely stayed the identical as earlier quarters.
“Within the present working setting, which has been difficult and unsure for a while now, I think about this to be optimistic,” he stated.
“Our world footprint exhibits a transparent divergence in client behaviour. Whereas macro uncertainty continues to stress discretionary spending within the US and lots of developed markets, we see considerably stronger, extra resilient client developments in key rising worldwide markets and the journey retail channel.”
He additionally warned that the dispute between the US and Canada and used barrel gross sales stay “persistent headwinds” for Brown-Forman’s income.
“Whereas we anticipate the cyclical headwinds to ultimately subside, we recognise the extremely dynamic nature of our business and acknowledge that a few of the present pressures might persist. Subsequently, our main focus stays squarely on actively managing the components inside our management.”
Whiting highlighted that the corporate’s nine-month gross sales have been led by its rising markets and journey retail, which have been up by 15% and seven% respectively.
Gross sales in Mexico rose by 15%, pushed by New Combine, which drove the “accelerating RTD class” and was boosted by “flavour, comfort and worth, notably because the financial setting stays below stress”.
In Brazil, gross sales have been elevated by 22%, led by double-digit positive aspects for Jack Daniel’s Tennessee Whiskey, and its Apple and Fireplace variants.
“We additionally consider that premiumisation is a chance in Brazil and are targeted on rising distribution for our super-premium whiskey portfolio,” he stated, noting double-digit progress for Woodford Reserve and Gentleman Jack.
Journey retail gross sales grew by 7%, which was boosted by a workforce restructuring from a yr in the past.
“The choice to restructure our journey retail workforce ensured that they’re now extra carefully aligned to our world airport operators and rising transportation channels corresponding to cruise and airways,” Whiting stated. “The effectivity of our new construction additionally permits us to allocate further assets to fast-growing areas within the Center East and India.”
Whiting famous that Canada, which plunged by 59% because of the ban of American alcohol throughout the market, continued to have the “most vital impression” on natural gross sales.
Chief monetary officer (CFO) Leanne Cunningham instructed traders on the earnings name that the agency would “proceed to imagine American spirits merchandise will stay off the shelf throughout most of Canada for our full fiscal yr and that expectation is mirrored in our fiscal 2026 steering”.
The group restated its earlier forecast for fiscal 2026 of an natural gross sales and working revenue decline within the low single-digit vary.
Europe: ‘Weak’ spirits market
Whiting known as the setting in Europe “difficult as a result of sustained stress on client sentiment and confidence throughout most European economies”.
Nevertheless, Whiting added: “Regardless of the setting, we’re sustaining or gaining share of the whiskey class in six of our eight prime European markets.”
Inside Germany, the place Brown-Forman’s gross sales fell by 7%, he famous that complete spirits developments declined by mid-single digits, led by “heightened aggressive promotional exercise” as customers tightened their budgets.
Concerning Brown-Forman’s UK efficiency, which recorded an natural gross sales drop of 10%, Whiting stated: “Difficult class dynamics stay probably the most important headwind as financial circumstances, together with rising excise taxes are negatively impacting client spending and TDS [total distilled spirits] developments.”
He added that spirits gross sales within the UK off-trade and the whiskey class “stay in low single-digit decline, though developments proceed to enhance and Jack Daniel’s Tennessee Whiskey continued to outperform the class and achieve market share”.
The UK and Germany are main markets for Brown-Forman however they continue to be “powerful”, Whiting instructed analysts on the decision.
He cited “normal spirits market weak point” throughout Europe, which is seeing a decline of low single digits, however famous the area was performing “higher than the US.”
Whiting additionally stated the corporate had benefitted from not too long ago taking up its path to market in Italy and Japan.
Inside Italy, Brown-Forman grew by double digits within the yr so far. Its efficiency there was led by Gin Mare, the nation’s main super-premium gin model, and Diplomático (third-biggest super-premium rum by worth).
The Jack Daniel’s household was additionally up by double digits in Italy.
In Brown-Forman’s greatest market, the US, gross sales have been down by 1%. Nevertheless, Whiting highlighted that the enterprise was forward of its “depletion-based outcomes and takeaway pattern”, led by a significant shift in its US distribution community and innovation efforts.
Jack Daniel’s Blackberry hailed successful
The launch of Jack Daniel’s Blackberry within the US final summer season has “continued to exceed expectations and is the second-largest new product by worth inside complete distilled spirits in Nielsen”, Whiting added.
There are additionally plans for extra sizes within the US for Jack Daniel’s Blackberry, Cunningham stated. The product made its debut in 4 European markets final autumn, together with the UK and Germany.
“Now we have largely all of our rising markets that we now have not but launched in,” she famous of the product’s potential. “And we all know from historical past, Brazil is a really robust flavours market. So I believe we might have actually nice expectations for that in addition to flavours exterior of the US. Now we have a reasonably confirmed observe report that we will develop these to change into very sizeable manufacturers.”
Whiting additionally identified that the Blackberry product has a “massive profit” from its mixability with lemonade, including “that’s the place lots of consumption if occurring”.
When requested concerning the present pricing setting, Whiting famous within the US that the final determine he noticed confirmed complete distilled spirits was “down about one level from a pricing perspective”, led by Tequila.
“It’s a little bit bit worse than it was six months in the past or so,” he says of the pricing, however famous that Brown-Forman is “lower than 0.5 level down”.
The ready-to-drink (RTD) class was a shiny spot for Brown-Forman, with gross sales up by 6%. Whiting famous that the enterprise had expanded distribution for its RTDs “inside the discounter channel”.
RTDs have been boosted by Tequila-based New Combine, which soared by 34% as a result of Mexico. The corporate not too long ago launched New Combine within the US, which Whiting described as a approach of connecting with Mexican-American customers.
The enterprise has test-launched two flavours in a restricted variety of states for New Combine with the intention of “rising distribution and consciousness earlier than increasing extra broadly”.
Going ahead, Whiting stated the enterprise would concentrate on its premium-plus manufacturers and RTD portfolio, and “streamline” the corporate’s workforce.
Demand plunges for used barrels
Cunningham additionally famous the impression of gross sales of used barrels. Natural income of the corporate’s non-branded and bulk arm plunged by 64% over the 9 months as a result of decrease used barrel gross sales.
“The difficult and unsure working setting confronted by all the spirits business has lowered the demand for used barrels and consequently additionally put downward stress on the pricing,” she stated.
“Subsequently, we proceed to anticipate used barrel gross sales to be decrease by greater than half of the fiscal 2025 degree.”
Final June, Brown-Forman bought its Louisville cooperage to Impartial Stave Firm for US$13.66 million.
Wooden prices have considerably impacted the corporate’s revenue margins and the closure of the Louisville cooperage represented the ultimate step in Brown-Forman’s wooden provide chain technique, which, Whiting stated final yr would “create efficiencies and permit us to additional optimise our capital allocation”.
Cunningham, who will retire in Could this yr, additionally warned that prices pressures dealing with American whiskey would proceed.
“Our portfolio is closely weighted to American whiskey,” Cunningham added. “We plan to liquidate ageing barrels within the coming years that have been produced through the hyperinflationary years of the early 2020s the place we confronted important value will increase for barrels, grain, vitality in addition to normal inflation.
“Whereas we now have taken strategic steps to optimise our wooden provide chain in response to those rising prices, because of the ageing of most of our merchandise, the impression of those latest actions will take time to come back by way of our outcomes. Subsequently, we anticipate the price pressures related to our barrelled whiskey to persist.”
Cunningham clarified to traders that the time period ‘liquidate’ signifies “dumping the contents out of the barrel in order that we will course of them and bottle them”.
Center East impression ‘too early’ to inform
Concerning the battle within the Center East, Whiting stated the precedence is the protection and safety of its workers, including that “everyone seems to be secure”.
He famous that UAE is a powerful marketplace for Brown-Forman, with double-digit progress.
“Within the UAE, we do assume that we do have the suitable degree of provide as we take into consideration our yr to go, March and April, to fulfill client demand. After which Israel is a a lot, a lot smaller enterprise for us. Once more, we predict that we’ve acquired the resilience within the provide there.”
He famous that world journey retail “may very well be considerably impacted, although it’s approach too early” however the enterprise has sufficient stock to provide the marketplace for a yr.
“We’re watching and assessing. If the transportation and airports normalise shortly, then we wouldn’t anticipate to see a lot of an impression. We’re doing all of the work to grasp the logistics of the place our items are in transport, and we’re rerouting them the place prudent.”
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