BrownForman Corporation (0HQ3.L) Q3 2025 Earnings Report

BrownForman delivered a solid QQ3 2025 with a muted year-over-year top-line trajectory and resilient profitability driven by its premium spirits portfolio. Revenue totaled $1.035 billion, down 3.2% year over year and 5.5% quarter over quarter, while gross margins remained robust at 59.8%, helping to sustain a healthy operating margin of 27.1% and a net margin of 26.1%. The company generated strong operating cash flow of $317 million and delivered free cash flow of $272 million, supporting ongoing dividend payments and selective debt reduction. The balance sheet remains sturdy, with substantial liquidity (cash and equivalents of $599 million) and a manageable debt load despite a net debt position of approximately $2.264 billion, yielding a net debt-to-EBITDA of about 5.9x. Strategically, BrownForman continues to benefit from its premium brand portfolio, particularly Jack Daniel’s and related premium offerings, which contribute to pricing power and stable profitability in consumer defensives. Near-term risks include inventory levels reflected in an elevated days inventory outstanding, potential macro headwinds affecting discretionary spend, and currency and commodity volatility impacting input costs. Management commentary (where available) would be expected to emphasize brand-led growth, international expansion, and disciplined capital allocation as levers for sustainable value creation. The absence of formal forward guidance in the data requires a cautious stance; investors should monitor demand in international markets, supply chain dynamics, and ongoing capital return amid a robust cash flow profile.