Brown-Forman is forecasting a decline in annual revenue and profits next year due to the “unknown” impact of tariffs and broader economic and political uncertainty.
The Jack Daniel’s maker said on Thursday (5 June) it now expected both organic net sales and organic operating income next year to decline in the low single-digit range.
“We anticipate the operating environment for fiscal 2026 will be challenging, with low visibility due to macroeconomic and geopolitical volatility as we face headwinds from consumer uncertainty, the potential impact from currently unknown tariffs, and lower non-branded sales of used barrels,” Brown-Forman said. “We remain focused on building our business for the long term and navigating the current environment at pace with strategic initiatives in fiscal 2026 that we believe will unlock future growth.”
Strategic initiatives would include the evolution of its US distribution network, ongoing restructuring efforts and “meaningful new product innovation”, it added.
Brown-Forman is less exposed to tariffs than other booze suppliers as it produces much of its spirits portfolio in the US, but remains exposed to the 50% tariff on steel and aluminium imports on account of its canned ready-to-drink portfolio.
It would also face a hit in the event of any retaliatory tariffs the EU or Canada might seek to impose on American whiskey, which makes up the bulk of its sales.
In March, CEO Lawson Whiting said Canadian stores pulling alcohol from sale was “worse than a tariff” and a “disproportionate response” to proposed levies by the Trump administration.
The downbeat forecast came as the Woodford Reserve brand owner reported a 1% organic uplift in revenue in fiscal 2025, despite sales declining organically by 3% in its fourth quarter.
Full-year operating income, meanwhile, declined 22% on a reported basis after the significant divestments of Finlandia Vodka and Sonoma-Cutrer Vineyards. On a like-for-like basis, organic operating income was up by 3%.
In January, Brown-Forman announced plans to shed 12%, or around 650 of its staff, in a bid to find $80m in annualised cost savings.
Strategic restructuring initiatives “designed to position the company for future growth” had resulted in one-off charges of $63m in fiscal year 2025, Brown-Forman said.
The Kentucky-headquartered supplier has also made a series of changes to its distribution network in the US, appointing Breakthru Beverage Group to cover 14 markets across the US and Canada and ending a 60-year sales, marketing and distribution partnership with Californian winemaker Korbel Champagne Cellars.
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