Brown-Forman CEO Notes Slow Improvement in U.S. Business
Outgoing Brown-Forman CEO Lawson Whiting noted that the company's business in the United States is improving slowly during a call with analysts, contributing to increased confidence in its full-year outlook despite an expected decline in organic operating income of 3–5%. The Jack Daniel’s maker reported first-quarter results showing total net sales down by 1% year-over-year due to factors including reduced barrel and tequila sales. While U.S. net sales declined on a reported basis, they were flat organically. Whiting highlighted that the business bottomed out in late 2025/early 2026 with signs of improvement supported by NABCA and Nielsen data. CFO Jim Peters noted cost-cutting actions are delivering results ahead of expectations but warned about ongoing gross margin pressures due to whiskey flow timing issues. Barrel sales, which had been a significant headwind for the company in recent years, have declined sharply and will likely continue to drop further this year. The Tequila segment also faced challenges with organic net sales declining 13% overall, driven by lower volumes and pricing pressure. However, Whiting noted encouraging signs of improvement for El Jimador in the U.S., while Herradura's performance remains more challenging due to its higher price point.
