Brown-Forman Q1 hit hard by Canada
Jack Daniel’s owner Brown-Forman suffered a 59% first-quarter sales drop in Canada after retailers pulled American alcohol from shelves.
The US firm reported revenue of US$924 million for the three months ending 31 July 2025, a decrease of 3% on a reported basis (up 1% organically). Organic operating income rose by 2% to US$260m (down 7% on a reported basis) during the first quarter (Q1).
The group attributed the decline to the absence of the Sonoma-Cutrer wines, which Brown-Forman sold in May last year to The Duckhorn Portfolio.
Similar to Q1, the group’s organic full-year sales were up by 1% despite a decline in its fourth quarter and struggling Tequila sales.
In terms of regions, Q1 sales in the US (Brown-Forman’s biggest market) dipped by 2% as Herradura Tequila and the core Jack Daniel’s whiskey struggled.
Developed international markets decreased by 9% because of ‘soft consumer demand’, with all countries failing to grow. This was also attributed to the decline of its flagship Jack Daniel’s whiskey in Germany and the UK, and the removal of American alcohol from shelves in most Canadian provinces in retaliation to US tariffs.
Canada suffered the greatest blow (down by 59%), followed by the UK (down 16%), Germany (down 13%) and France (down 8%).
According to data from Spirits Canada, from 5 March to the end of April, US spirits sales in Canada dropped by 66.3%.
On a more positive note, all of Brown-Forman’s emerging markets were in growth, collectively seeing a 25% Q1 rise. Turkey experienced the highest increase, up 39%, and Brazil rose by 30% – both gains were partly attributed to an increase in distributor inventories. Mexico posted growth of 22% and Poland was up by 6%.
Travel retail sales also grew, up by 7% in the quarter, driven by Jack Daniel’s Tennessee whiskey and Gin Mare.
Lawson Whiting, Brown-Forman’s president and CEO, described its Q1 performance as “solid” in the face of a “challenging environment”.
“Superior innovation and bold route-to-consumer strategies, in particular, have positioned us to deliver resilient results in the face of persistent headwinds,” he added.
Mixed fortunes for Tequila
The Tequila portfolio posted an uptick of 1%, led by a 16% increase for El Jimador. Herradura, on the other hand, slumped by 15% due to lower volumes in the competitive US market for Tequila.
Meanwhile, the group’s whisky sales were flat due to lower volumes of Jack Daniel’s Tennessee whiskey (down 4%) in the US and Germany. The firm said this was offset by strong early shipments of the new Jack Daniel’s Blackberry flavour and its major distribution transition in the US from 1 August.
Within the Jack Daniel’s family, only Gentleman Jack and the Apple line extension posted growth, up by 11% and 16% respectively, with the latter driven by Brazil.
Jack Daniel’s Honey and Tennessee Fire both fell by 4%, while premium Bourbon Woodford Reserve rose by 1%.
Old Forester outperformed stablemate Woodford Reserve with 8% growth.
Meanwhile, the group’s ‘rest of whiskey’ sales soared by 34%. This division includes brands such as Slane Irish whiskey, and Scotch whiskies Benriach and Glenglassaugh.
The ready-to-drink (RTD) portfolio increased by 9% after Tequila-based New Mix skyrocketed by 36%. However, the Jack Daniel’s RTD line dipped by 1% as a result of a decline in Canada.
The group’s ‘rest of portfolio’ sales grew by 17%, driven by Gin Mare (up 36%) and Diplomático rum (up 6%).
Brown-Forman reiterated its sales expectation for the 2025/26 full year, with both organic revenue and operating income predicted to decline by low single digits.
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