Travel retail saw a notable 7% decline, with premium SKUs bearing the brunt—underlining the channel’s sensitivity to global macro-economic and tariff instability.

Brown‑Forman’s FY 2025 fiscal report showed its total net sales dropped 5%—from just under $4bn in FY2024 to approximately $3.8 bn. The wider business faced similarly challenging circumstances as net income fell 15%, while Q4 net income plunged 45% to $146 m.

Travel retail in particular saw a 7% decrease in net sales as its Jack Daniels’ super-premium expressions struggled, compounded by the divestiture of the Finlandia, though the company noted this was partially offset by higher volumes of Diplomático.

Regionally the story was much the same, with a 7% (2% organic) net sales reduction in the US, 6% (3% organic) in developed international markets (Germany, Australia, the United Kingdom, France, and Canada), and a 2% decline (+9% organic) in emerging markets (Mexico, Poland, Brazil, and Turkey).

The decline in its developed markets was partially offset by higher volumes of Jack Daniel’s Tennessee Whiskey in Japan, while the decline in its emerging markets was partially offset by the growth of the Jack Daniel’s family of brands in Türkiye, Brazil, and the United Arab Emirates, and higher volumes of New Mix.

“While our results did not meet our long-term growth aspirations, we made important progress in an exceptionally challenging macroeconomic environment. Looking ahead to fiscal 2026, we expect continued headwinds, said Lawson Whiting, Brown-Forman’s President and Chief Executive Officer, who continued: “Still, we are confident that with agility, innovation, and a clear focus on execution, we are well positioned to navigate uncertainty and unlock new opportunities for sustainable long-term growth.”

Brown-Forman noted a cocktail of macroeconomic and geopolitical uncertainties – chief among them ongoing tariff concerns, reduced discretionary spending and higher input costs – as well as the divestiture of its Finlandia and Sonoma-Cutrer brands, led to a decline in net sales across all geographic aggregations.

Globally, its whisky portfolio held steady with net sales of +1% organic, as strong core brand and Woodford performances offset declines in super‑premium SKUs.

Tequila slumped 14% (12% organic), largely due to el Jimador and Herradura volume and pricing pressures, while RTDs fell 6% (+5% organic), reflecting roll‑out issues with Jack Daniel’s Country Cocktails and negative FX impact on its New Mix, which saw 13% organic growth, but a 1% reduction in net sales.

2026 Outlook 

As a result of these ongoing portfolio challenges, Brown-Forman’s Board of directors approved a plan to reduce its structural cost base and realign resources toward future sources of growth. This included reducing the overall workforce by approximately 12% and closing the Louisville-based Brown-Forman Cooperage, removing $63m from its cost od sales, operating expenses and operating income from Q3 and Q4 2025.

In a statement contained within its fiscal report, the company said: “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.

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 led by the significant evolution of our U.S. distribution, the restructuring initiative, and meaningful new product innovation.”

The revised outlook pointed to: organic net sales decline in the low-single digit range; organic operating income decline in the low-single digit range; an effective tax rate to be in the range of approximately 21% to 23%; and capital expenditures planned to be in the range of $125 to $135 million.

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