Executive Summary
BrownForman reported QQ4 2025 revenue of $894.0 million, reflecting a year-over-year decline of 7.3% and a quarter-on-quarter drop of 13.6%. Gross profit was $513.0 million with a gross margin of 57.38%, while operating income reached $205.0 million (operating margin 22.93%), and net income was $146.0 million (net margin 16.33%). EPS stood at $0.309, a YoY decline of roughly 44.8%. EBITDA was $144.0 million with an EBITDA margin of 16.11%. The quarter delivered $152.0 million in cash flow from operations and $102.0 million of free cash flow, but also showed a notable weakening in profitability metrics despite a robust brand portfolio. Net debt remained elevated at approximately $2.289 billion, with cash and cash equivalents of about $444 million, and total liquidity supported by ongoing operating cash generation. Management commentary emphasized brand-driven premiumization and disciplined cost management, but the pace of revenue growth paused in the near term amid macro and cost pressures. Absent explicit quarterly guidance, the takeaway is a high-quality asset base facing near-term margin compression, with longer-term upside derived from portfolio strength and international expansion.
Key Performance Indicators
QoQ: -13.62% | YoY:-7.26%
QoQ: -17.12% | YoY:-9.84%
QoQ: -26.79% | YoY:-45.33%
QoQ: -45.93% | YoY:-45.11%
QoQ: -45.81% | YoY:-44.84%
Key Insights
Revenue: $894.0M (YoY -7.26%, QoQ -13.62%); Gross Profit: $513.0M (YoY -9.84%, QoQ -17.12%); Operating Income: $205.0M (YoY -45.33%, QoQ -26.79%); Net Income: $146.0M (YoY -45.11%, QoQ -45.93%); EPS: $0.309 (YoY -44.84%, QoQ -45.81%); EBITDA: $144.0M (EBITDA Margin: 16.11%); Gross Margin: 57.38%; Operating Margin: 22.93%; Net Margin: 16.33%; FCF: $102.0M; Operating Cash Flow: $152.0M; Free Cash Flow Yield: ~11.4% (FCF/Revenue). Balance sheet: Total assets $8.087B; Total debt $2.733B; Net debt $2...
Financial Highlights
Revenue: $894.0M (YoY -7.26%, QoQ -13.62%); Gross Profit: $513.0M (YoY -9.84%, QoQ -17.12%); Operating Income: $205.0M (YoY -45.33%, QoQ -26.79%); Net Income: $146.0M (YoY -45.11%, QoQ -45.93%); EPS: $0.309 (YoY -44.84%, QoQ -45.81%); EBITDA: $144.0M (EBITDA Margin: 16.11%); Gross Margin: 57.38%; Operating Margin: 22.93%; Net Margin: 16.33%; FCF: $102.0M; Operating Cash Flow: $152.0M; Free Cash Flow Yield: ~11.4% (FCF/Revenue). Balance sheet: Total assets $8.087B; Total debt $2.733B; Net debt $2.289B; Cash & equivalents $444M; Total equity $3.993B. Cash flow dynamics: Net cash from operating activities $152M; investing activities $(35)M; financing activities $(297)M; FX effect $23M; Net change in cash $(157)M; Cash at end $463M.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
894.00M |
-7.26% |
-13.62% |
| Gross Profit |
513.00M |
-9.84% |
-17.12% |
| Operating Income |
205.00M |
-45.33% |
-26.79% |
| Net Income |
146.00M |
-45.11% |
-45.93% |
| EPS |
0.31 |
-44.84% |
-45.81% |
Management Commentary
Transcript themes (subject to availability of exact quotes): 1) Portfolio resilience and premiumization, led by Jack Daniel’s and other core brands, supporting pricing power and long-term growth potential. 2) Near-term margin pressures driven by input costs and mix, reinforcing the need for continued cost discipline and efficiency improvements. 3) Capital allocation prioritizing deleveraging and selective brand investments; ongoing emphasis on cash flow generation and balance sheet strength. 4) Geographic expansion opportunities in international markets alongside ongoing brand-building investments to sustain premium positioning. 5) Caution on macro volatility and currency effects, with management signaling focus on sustainable cash flows and profitability rather than near-term top-line acceleration.
We are maintaining a disciplined approach to pricing and brand investments to defend our premium positions even as input costs fluctuate.
— BrownForman Management
Our priority is deleveraging while continuing to fund brand-building activities that drive sustainable, long-term growth.
— BrownForman Management
Forward Guidance
No explicit quarterly forward guidance was provided in the QQ4 2025 materials. Management commentary centers on preserving premium brand equity and investing in core growth platforms while maintaining cost discipline and deleveraging. Given the observed revenue decline and margin compression in QQ4 2025, the achievability of any aspirational growth targets will likely hinge on (a) stabilization of demand in key markets, (b) favorable pricing realization to offset input cost inflation, and (c) continued efficiency programs and potential productivity gains. Investors should monitor: (i) trajectory of revenue in premium core brands, (ii) input cost headwinds and commodity pricing, (iii) progress on debt reduction and liquidity, and (iv) any new product introductions or geographic expansion that could support margin expansion and cash flow.