Executive Summary
BrownForman reported QQ1 2025 revenue of $951 million, down 8.38% year over year and 1.35% quarter over quarter, while gross profit reached $565 million for a gross margin of 59.4%. Operating income was $281 million with an operating margin of 29.5%, and net income stood at $195 million (net margin 20.5%), translating to an EPS of $0.41. Despite the revenue headwinds, the company maintained strong gross margins, supported by premium brand pricing power and a favorable product mix. The quarter also highlighted material cash-flow dynamics: free cash flow was negative at about $24 million for the period, while net cash provided by operating activities was $17 million amid working capital outflows. BrownForman ended QQ1 2025 with $426 million in cash and cash equivalents and total debt of $3.168 billion, yielding a net debt position of approximately $2.752 billion. Liquidity remains solid, but leverage and working-capital intensity warrant close monitoring insofar as it affects near-term cash generation and dividend capacity. Management commentary for QQ1 2025 is not included in the provided input, so quotes and themes from the earnings call could not be cited. Investors should watch for normalization of working capital, potential price/mix enhancements, and ongoing cost discipline as drivers of margin resilience going forward.
Key Performance Indicators
QoQ: -0.70% | YoY:-13.21%
QoQ: -25.07% | YoY:-14.07%
QoQ: -26.69% | YoY:-15.58%
QoQ: -26.79% | YoY:-14.58%
Key Insights
Revenue: $951,000,000 (YoY -8.38%, QoQ -1.35%)
Gross Profit: $565,000,000; Gross Margin: 59.41% (vs. prior period)
EBITDA: $307,000,000; EBITDA Margin: 32.28%
Operating Income: $281,000,000; Operating Margin: 29.55%
Net Income: $195,000,000; Net Margin: 20.50%
EPS: $0.41; Weighted Avg Shares: 472.637 million
Cash Flow: Net Income $195M; Depreciation & Amortization $22M; Change in Working Capital -$193M; Net Cash Provided by Operating Activities $17M; Free Cash Flow -$24M
Balance Sheet: Total...
Financial Highlights
Revenue: $951,000,000 (YoY -8.38%, QoQ -1.35%)
Gross Profit: $565,000,000; Gross Margin: 59.41% (vs. prior period)
EBITDA: $307,000,000; EBITDA Margin: 32.28%
Operating Income: $281,000,000; Operating Margin: 29.55%
Net Income: $195,000,000; Net Margin: 20.50%
EPS: $0.41; Weighted Avg Shares: 472.637 million
Cash Flow: Net Income $195M; Depreciation & Amortization $22M; Change in Working Capital -$193M; Net Cash Provided by Operating Activities $17M; Free Cash Flow -$24M
Balance Sheet: Total Assets $8.205B; Total Liabilities $4.74B; Total Stockholders’ Equity $3.465B; Cash & Equivalents $416M; Debt (Total) $3.168B; Net Debt $2.752B
Liquidity and Leverage: Current Ratio 2.47; Quick Ratio 0.901; Cash Ratio 0.252; Debt to Equity 0.914; Debt to Capitalization 0.478; Equity Multiplier 2.37; P/E ~27.37; P/B ~6.16; P/S ~22.45; EV/EBITDA ~78.75; Dividend Yield ~0.48%
Key Working Capital Trends: DSO ~76 days; DIO ~605 days (very high inventory days); DPO ~156 days; Cash Conversion Cycle ~526 days
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
951.00M |
-8.38% |
-1.35% |
| Gross Profit |
565.00M |
-13.21% |
-0.70% |
| Operating Income |
281.00M |
-14.07% |
-25.07% |
| Net Income |
195.00M |
-15.58% |
-26.69% |
| EPS |
0.41 |
-14.58% |
-26.79% |
Key Financial Ratios
operatingProfitMargin
29.5%
operatingCashFlowPerShare
$0.04
freeCashFlowPerShare
$-0.05
dividendPayoutRatio
52.8%
Management Commentary
Not available in the provided data. No earnings call transcript was supplied, so quotes or management themes from the QQ1 2025 call cannot be extracted or cited.
Forward Guidance
Forward-looking assessment is constrained by the absence of management-provided guidance in the input. Nevertheless, several factors shape the outlook: (1) Brand momentum and pricing power in premium portfolios (e.g., Jack Daniel’s and related whiskies) support gross margin resilience even as volumes adjust; (2) Elevated working capital and a high inventory balance contribute to near-term free cash flow headwinds; (3) A modest to heavy debt burden underpins leverage, potentially influencing capital allocation and dividend policy. Investors should monitor: (a) inventory normalization and working-capital efficiency, (b) volume trends in domestic versus international markets, (c) any announced price increases or mix shift to higher-margin SKUs, (d) synergies from cost-of-goods and SG&A discipline, and (e) debt maturation and refinancing risk. A realistic expectation is for margin stability with potential uplift if pricing initiatives and cost-containment programs translate into better operating cash flow; downside risks include commodity/currency volatility and continued working-capital pressure.