Looks like even spirits giants aren’t immune to market headwinds! Brown-Forman saw a 3% sales drop last quarter, with Jack Daniel’s volumes dipping. But it wasn’t all bad news, as Gentleman Jack and el Jimador poured out some growth. What’s next for the world of whiskey and tequila?
Brown-Forman, a global titan in the spirits industry renowned for its iconic Jack Daniel’s Tennessee Whiskey, recently announced a 3% sales decline in its first fiscal quarter, signaling a period of strategic recalibration amidst a dynamic global market.
With a heritage stretching back to 1870, Brown-Forman commands a formidable presence across over 170 countries, boasting a diverse portfolio of more than 40 brands spanning whiskey, tequila, gin, and ready-to-drink cocktails. Its unwavering commitment remains centered on the high-end spirits markets, emphasizing quality, legacy, and premium offerings to discerning consumers worldwide.
The company’s flagship Jack Daniel’s Tennessee Whiskey, a cornerstone of its brand identity, experienced a notable 6% fall in depletion volumes during the first quarter of fiscal year 2026. This dip in the core whiskey product underscores broader shifts in consumer preferences and intensified market competition within the traditional whiskey segment.
Despite the volume challenges for its core offering, the broader Jack Daniel’s whiskey portfolio demonstrated resilience, holding steady overall. Performance within the whiskey category was mixed, with Gentleman Jack achieving an impressive 8% increase in net sales, mirroring the strong growth seen in Old Forester net sales, which also climbed 8% in the same period. However, Woodford Reserve faced a slight contraction, with its net sales declining by 2%.
The competitive landscape of the tequila market presented its own set of hurdles for Brown-Forman in Q1. Herradura tequila, a key brand, observed a double-digit decline in net sales, particularly in the United States, as the category grapples with intense competition and evolving consumer tastes.
In contrast to Herradura’s performance, el Jimador tequila emerged as a strong performer, posting double-digit growth driven by strategic initiatives. This success was primarily fueled by the introduction of new packaging and the launch of el Jimador Cristalino, an innovative tequila offering that resonated positively with consumers and revitalized brand interest.
Looking ahead, Brown-Forman has reaffirmed its full-year fiscal 2026 guidance, maintaining a cautious yet clear outlook. Management anticipates a low-single-digit decline in both organic net sales and organic operating income for the entirety of FY2026, reflecting a prudent approach to market expectations.
Further financial projections include capital expenditures estimated to range between $125 million and $135 million for fiscal year 2026, alongside an effective tax rate expected to fall within the 21% to 23% bracket. These figures paint a picture of strategic capital allocation and fiscal planning in the coming year.
The cautious tone from leadership is largely attributed to persistent global uncertainties. Macroeconomic fluctuations, the looming potential for trade tariffs, evolving consumer trends, and the inherent risk of unsustainable distributor inventory growth in emerging markets collectively contribute to a complex operational environment, necessitating vigilance and adaptability from the spirits giant.
