Brown-Forman Q1 EPS Beats but Sales Miss as Tequila Slumps and Spirits Market Stays Sluggish

Brown-Forman reported first-quarter fiscal 2027 results on September 2, posting GAAP earnings per share of $0.38, beating analyst estimates by $0.01, while revenue of $911 million fell short of expectations by $4 million. Organic net sales declined approximately 1% in the quarter, with flat whiskey volumes and a 17% drop in Herradura Tequila net sales weighing on the top line. Pressure from used barrel sales and weakness in several developed international markets added to the shortfall.

Growth in the ready-to-drink category and the launch of Jack Daniel's Tennessee Blackberry provided some offset, but management characterized the operating environment as challenging. The company reaffirmed its full-year FY2027 guidance, calling for organic net sales to be approximately flat and organic operating income to contract 3% to 5%. Management also signaled that gross margin is expected to have peaked in the first quarter.

Shares rose 4.4% in midday trading on September 2, as the earnings beat and maintained guidance appeared to reassure investors despite the soft revenue print and cautious outlook for profitability through the rest of the fiscal year.