BrownForman’s QQ1 2026 quarter (period ending 2025-07-31) delivered a mixed but fundamentally sound set of results for a premium beverage company in the Consumer Defensive sector. Revenue totaled $924.0 million, down 2.84% year over year but up 3.36% sequentially on a QoQ basis. Gross profit reached $552.0 million, yielding a gross margin of 59.74%, with EBITDA of $267.0 million and operating income of $260.0 million, or an operating margin of 28.14%. Net income was $170.0 million, or a net margin of 18.40%, and diluted EPS was $0.36. The quarter benefited from favorable product mix and discipline on operating expenses, contributing to margin retention despite a modest top-line decline.
From a cash-flow perspective, BrownForman generated $160.0 million of net cash from operating activities, spent $31.0 million on capex, and delivered free cash flow of $129.0 million. Dividends paid amounted to $107.0 million during the period, highlighting the company’s ongoing capital-allocation discipline and shareholder-friendly policy. The balance sheet remains solid with liquidity supported by cash and cash equivalents of $471.0 million and total current assets of $4.178 billion against current liabilities of $1.497 billion, yielding a healthy current ratio (~2.8x). Net debt stood at approximately $2.23 billion, with interest expense of $25.0 million and an EBIT/interest coverage well above 10x, underscoring financial resilience.
Looking ahead, management has not provided explicit quarterly guidance in the data set; however, an investment-grade positioned portfolio anchored by Jack Daniel’s and other premium brands, continued pricing discipline, and an emphasis on efficiency should support mid-to-high single-digit free cash flow generation over time. Key factors investors should monitor include consumer demand dynamics in the U.S. and international markets, input-cost trajectories, brand-mix evolution toward premium offerings, and the efficacy of distribution initiatives across geographies. Overall, the QQ1 results reflect a high-quality, cash-generative business with durable brand equity and an attractive dividend framework, albeit with a modest near-term revenue headwind versus the prior period.