Brown Forman : Q3 2025 Brown-Forman Corp Earnings Conference Call press release

Published: 2025-03-05 11:17:05 ET BF.B

BROWN-FORMAN REPORTS YEAR-TO-DATE FISCAL 2025 RESULTS;

REAFFIRMS FULL YEAR GROWTH OUTLOOK

March 5, 2025, LOUISVILLE, KY - Brown-Forman Corporation (NYSE: BFA, BFB) reported financial results for its third quarter and nine months ended January 31, 2025. Third quarter reported net sales decreased 3%1 to $1.0 billion (+6% on an organic basis2) compared to the same prior-year period. Third quarter reported operating income decreased 25% to $280 million (+23% on an organic basis) and diluted earnings per share decreased 5% to $0.57.

For the nine months of the fiscal year, reported net sales decreased 4% to $3.1 billion (+2% on an organic basis) compared to the same prior-year period. Year-to-date reported operating income decreased 13% to $902 million (+5% on an organic basis) and diluted earnings per share decreased 4% to $1.53.

"We are pleased to reaffirm our outlook for organic top and bottom line growth in fiscal 2025 and are proud of our team's ability to deliver industry-leading growth in this challenging environment," said Lawson Whiting, Brown-Forman's President and Chief Executive Officer. "While we anticipate continued uncertainty and headwinds in the external environment, we are also confident that we have the right people, brands, and strategy in place to take advantage of ongoing growth opportunities."

Year-to-Date Fiscal 2025 Highlights

Year-to-Date Fiscal 2025 Brand Results

Year-to-Date Fiscal 2025 Market Results

Year-to-Date Fiscal 2025 Other P&L Items

Year-to-Date Fiscal 2025 Financial Stewardship

On February 20, 2025, the Brown-Forman Board of Directors declared a regular quarterly cash dividend of $0.2265 per share on its Class A and Class B Common Stock. The dividend is payable on April 1, 2025, to stockholders of record on March 7, 2025. Brown-Forman, a member of the prestigious S&P 500 Dividend Aristocrats Index, has paid regular quarterly cash dividends for 81 consecutive years and has increased the regular dividend for 41 consecutive years.

Fiscal 2025 Outlook

The operating environment continues to be increasingly volatile due to geopolitical uncertainties and global macroeconomic conditions. Based on the currently known factors, we anticipate a return to organic net sales and organic operating income growth for fiscal 2025. Accordingly, we reaffirm the following expectations:

The forecasted effective tax rate range has been updated to approximately 20% to 22% from 21% to 23%.

Conference Call Details

Brown-Forman will host a conference call to discuss these results at 10:00 a.m. (ET) today. A live audio broadcast of the conference call, and the accompanying presentation slides, will be available via Brown-Forman's website, brown-forman.com, through a link to "Investors/Events & Presentations." A digital audio recording of the conference call and the presentation slides will also be posted on the website and will be available for at least 30 days following the conference call.

Brown-Forman Corporation has been building exceptional spirits brands for more than 150 years, responsibly upholding our founding promise of "Nothing Better in the Market." Our portfolio of premium brands includes the Jack Daniel's Family of Brands, Woodford Reserve, Herradura, el Jimador, Korbel, New Mix, Old Forester, The Glendronach, Glenglassaugh, Benriach, Diplomático Rum, Chambord, Gin Mare, Fords Gin, Slane, and Coopers' Craft. With a team of approximately 5,400 employees worldwide, we proudly share our passion for premium beverages in more than 170 countries. Discover more about us at brown-forman.com and stay connected through LinkedIn, Instagram, and X.

Important Information on Forward-Looking Statements:

This press release contains statements, estimates, and projections that are "forward-looking statements" as defined under U.S. federal securities laws. Words such as "aim," "ambition," "anticipate," "aspire," "believe," "can," "continue," "could," "envision," "estimate," "expect," "expectation," "intend," "may," "might," "plan," "potential," "project," "pursue," "see," "seek," "should," "will," "would," and similar words indicate forward-looking statements, which speak only as of the date we make them. Except as required by law, we do not intend to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from those expressed in or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to:

For further information on these and other risks, please refer to our public filings, including the "Risk Factors" section of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

Brown-Forman Corporation

Unaudited Consolidated Statements of Operations

For the Three Months Ended January 31, 2024 and 2025

(Dollars in millions, except per share amounts)

2024

2025

Change

Net sales

1,069

1,035

(3%)

Cost of sales

434

416

(4%)

Gross profit

635

619

(3%)

Advertising expenses

143

125

(13%)

Selling, general, and administrative expenses

203

178

(13%)

Restructuring and other charges

Gain on sale of business

(90)

Other expense (income), net

Operating income

373

280

(25)%

Non-operating postretirement expense

Interest expense, net

Equity method investment income and gain on sale

(81)

Income before income taxes

342

332

(3)%

Income taxes

Net income

285

270

(6)%

Earnings per share:

Basic

0.60

0.57

(5)%

Diluted

0.60

0.57

(5)%

Gross margin

59.4%

59.8%

Operating margin

34.9%

27.1%

Effective tax rate

16.5%

18.7%

Cash dividends paid per common share

0.2178

0.2265

Shares (in thousands) used in the

calculation of earnings per share

Basic

474,806

472,661

Diluted

475,566

472,886

Brown-Forman Corporation

Unaudited Consolidated Statements of Operations

For the Nine Months Ended January 31, 2024 and 2025

(Dollars in millions, except per share amounts)

2024

2025

Change

Net sales

3,214

3,081

(4%)

Cost of sales

1,257

1,251

Gross profit

1,957

1,830

(6%)

Advertising expenses

414

377

(9%)

Selling, general, and administrative expenses

595

551

(7%)

Restructuring and other charges

Gain on sale of business

(90)

Other expense (income), net

(1)

(33)

Operating income

1,039

902

(13)%

Non-operating postretirement expense

Interest expense, net

Equity method investment income and gain on sale

(83)

Income before income taxes

951

898

(6)%

Income taxes

193

175

Net income

758

723

(5)%

Earnings per share:

Basic

1.59

1.53

(4)%

Diluted

1.58

1.53

(4)%

Gross margin

60.9%

59.4%

Operating margin

32.3%

29.3%

Effective tax rate

20.3%

19.5%

Cash dividends paid per common share

0.6288

0.6621

Shares (in thousands) used in the

calculation of earnings per share

Basic

477,542

472,651

Diluted

478,444

472,960

Brown-Forman Corporation

Unaudited Condensed Consolidated Balance Sheets

(Dollars in millions)

April 30,

January 31,

2024

2025

Assets:

Cash and cash equivalents

446

599

Accounts receivable, net

769

855

Inventories

2,556

2,451

Assets held for sale

120

Other current assets

265

254

Total current assets

4,036

4,279

Property, plant, and equipment, net

1,074

1,041

Goodwill

1,455

1,435

Other intangible assets

990

973

Equity method investments

270

Other assets

341

340

Total assets

8,166

8,071

Liabilities:

Accounts payable and accrued expenses

793

695

Accrued income taxes

Short-term borrowings

428

202

Current portion of long-term debt

300

Total current liabilities

1,559

1,227

Long-term debt

2,372

2,361

Deferred income taxes

315

266

Accrued postretirement benefits

160

161

Other liabilities

243

233

Total liabilities

4,649

4,248

Stockholders' equity

3,517

3,823

Total liabilities and stockholders' equity

8,166

8,071

Brown-Forman Corporation

Unaudited Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended January 31, 2024 and 2025

(Dollars in millions)

2024

2025

Cash provided by operating activities

362

446

Cash flows from investing activities:

Proceeds from sale of business

194

Proceeds from sale of equity method investment

350

Proceeds from sale of property, plant, equipment, and other

Additions to property, plant, and equipment

(148)

(117)

Other

Cash provided by (used for) investing activities

284

Cash flows from financing activities:

Net change in short-term borrowings

492

(227)

Payments of withholding taxes related to stock-based awards

(4)

(2)

Acquisition of treasury stock

(400)

Dividends paid

(300)

(313)

Other

(4)

Cash provided by (used for) financing activities

(212)

(546)

Effect of exchange rate changes

(20)

Net increase (decrease) in cash, cash equivalents, and restricted cash

215

164

Cash, cash equivalents, and restricted cash at beginning of period

384

456

Cash, cash equivalents, and restricted cash at end of period

599

620

Less: Restricted cash at end of period

(10)

(21)

Cash and cash equivalents at end of period

589

599

Schedule A

Brown-Forman Corporation

Supplemental Statement of Operations Information (Unaudited)

Percentage change versus the prior-year

January 31, 2025

period ended

3 Months

9 Months

Reported change in net sales

(3%)

(4%)

Acquisitions and divestitures

JDCC*

Foreign exchange

Organic change^ in net sales

Reported change in gross profit

(3%)

(6%)

Acquisitions and divestitures

JDCC

Foreign exchange

Organic change in gross profit

(1%)

Reported change in advertising expenses

(13%)

(9%)

Acquisitions and divestitures

Foreign exchange

Organic change in advertising expenses

(9%)

(6%)

Reported change in SG&A

(13%)

(7%)

Acquisitions and divestitures

Foreign exchange

Organic change in SG&A

(7%)

(4%)

Reported change in operating income

(25%)

(13%)

Acquisitions and divestitures

24%

11%

Other items^

11%

Foreign exchange

12%

Organic change in operating income

23%

*"JDCC" is included in the "other items" Non-GAAP Measure. See "Note 2 - Non-GAAP Financial Measures" for details.

^See "Note 2 - Non-GAAP Financial Measures" for details on our use of Non-GAAP financial measures, how these measures are calculated, and the reasons why we believe this information is useful to readers.

Note: Totals may differ due to rounding.

Disclaimer

Brown-Forman Corporation published this content on March 05, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 05, 2025 at 16:16:03.884.