Brown-Forman anticipates fiscal 2027 organic net sales to be approximately flat, with organic operating income projected to decline 3% to 5%. This outlook follows a quarter where sales rose 2% to $912 million, surpassing estimates, but profit per share fell 62% due to increased expenses.
Whiskey maker Brown-Forman reported better-than-expected fourth-quarter sales of $912 million, a 2% increase, driven by strong demand for premium spirits like Jack Daniel's. However, the company issued a warning for fiscal year 2027, anticipating a challenging operating environment due to macroeconomic pressures and geopolitical instability impacting consumer behavior and beverage alcohol consumption, particularly in developed markets. Selling, general, and administrative expenses rose significantly by 34% to $259 million, contributing to a 62% drop in profit per share to 12 cents, which fell short of analysts' estimates. The company is also proceeding with a restructuring plan announced in 2025, which includes cost-control measures and job cuts, amidst a broader industry sales slump. Brown-Forman now expects fiscal 2027 organic net sales to be approximately flat, with organic operating income projected to decline 3% to 5%. Shares of the company rose 3% in morning trading following the results.
The company's forecast for flat sales and declining profits in fiscal 2027 signals potential headwinds for the spirits industry, impacting investor sentiment and potentially leading to further cost-cutting measures.