Brown-Forman reports US$3.1B in nine-month sales as divestitures impact growth 

USA – Brown-Forman, the maker of Jack Daniel’s, reported a 4% increase in sales to US$3.1 billion for the nine months ending January 31, 2025, despite challenges from recent divestitures, including Finlandia and Sonoma-Cutrer.  

The company’s operating income declined 13% to US$902 million, though on an organic basis, it grew by 5%. Diluted earnings per share fell by 4% to US$1.53. 

The company faced headwinds in its Tequila category, with sales dropping 13% organically due to a competitive U.S. market and macroeconomic pressures in Mexico.  

However, its whiskey portfolio recorded a 2% organic growth, led by Woodford Reserve, which saw a 10% increase, and Jack Daniel’s, up by 2%. 

Brown-Forman’s ready-to-drink (RTD) segment grew by 6%, driven by a 3% increase in Jack Daniel’s RTD and ready-to-pour offerings. Organic sales of the Tequila-based RTD New Mix surged by 13%. 

Geographically, the company’s largest market, the U.S., experienced a 1% decline in organic sales. This was attributed to the Sonoma-Cutrer divestment, lower volumes of Korbel California Champagnes and Jack Daniel’s Tennessee Whiskey, and the transition of Jack Daniel’s Country Cocktails production to Pabst Brewing Company. 

Developed international markets saw a 1% drop in organic sales, impacted by the absence of Finlandia and unfavorable foreign exchange rates.  

Germany and the U.K. saw declines of 4% and 5%, respectively, while Spain and France recorded decreases of 7% and 2%.  

In contrast, emerging markets grew by 8%, with strong performance from the Jack Daniel’s portfolio in Turkey, Brazil, and the UAE, alongside higher volumes of New Mix. 

For the third quarter, Brown-Forman’s reported net sales declined 3% to US$1 billion. However, organic net sales rose 6% after accounting for divestitures and currency fluctuations.  

Reported operating income fell sharply by 25% to US$280 million, but organic operating income grew by 23%, indicating strong underlying fundamentals. Diluted earnings per share dropped slightly by 5% to US$0.57. 

Looking Ahead 

Looking ahead, Brown-Forman expects full-year organic sales and operating profit growth of 2% to 4%. 

“We are pleased to reaffirm our outlook for organic top and bottom-line growth in fiscal 2025, and are proud of our team’s ability to deliver industry-leading growth in this challenging environment,” said Lawson Whiting, Brown-Forman’s president and CEO. 

“While we anticipate continued uncertainty and headwinds in the external environment, we are also confident that we have the right people, brands, and strategy in place to take advantage of ongoing growth opportunities.” 

US Tariffs worries 

In December, Whiting stated that Brown-Forman is “proactively preparing” for potential tariffs on spirits.  

He noted that the removal of U.S. liquor from Canadian store shelves in response to past U.S. tariffs was “worse than a tariff” and a “disproportionate response.”  

Despite this, he emphasized that Canada accounts for only 1% of Brown-Forman’s total sales, minimizing its impact. 

The company is also monitoring trade developments in Mexico, which contributed 7% of its 2024 sales, as it navigates potential market shifts. 

Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.