Brown-forman (bf.b) Stock Earnings Reports

Key investor takeaways from Brown‑Forman's Q3 and 9M FY2025 results: Reported net sales fell 4% year‑to‑date but organic net sales returned to growth (+2% YTD) after adjusting for divestitures, FX and the Jack Daniel's Country Cocktails business model change. Management reported sequential improvement across regions as the company entered the second half and reaffirmed full‑year guidance. Brand performance highlights: Woodford Reserve (+10% organic YTD) and Jack Daniel's Tennessee Whiskey (+2% organic YTD) were the largest drivers; RTDs (notably Jack & Coke) and New Mix continued to gain share; Diplomático and Gin Mare showed strong double‑digit growth in selected markets; tequila brands (El Jimador, Herradura) remain challenged in the U.S. and Mexico. Geographic performance: emerging markets led growth (+8% organic YTD, led by Turkey and Brazil), developed international markets were slightly down, and the U.S. was roughly flat with pockets of strength (Woodford, Old Forester, RTDs) offset by declines in some Jack Daniel's SKUs and Korbel. Margin and P&L: reported gross profit down 6% (organic down 1%) with gross margin contracting ~150 bps to 59.4% but improving sequentially; operating expenses moderated (advertising and SG&A down) but one‑time restructuring charges have been taken. Strategic actions and cash: company announced workforce reduction (~12%), closure of the Louisville Cooperage, estimated charges of $60–$70M and expected annualized savings of $70–$80M (plus >$30M proceeds from asset sales); also received $350M cash and recognized a $78M gain from sale of Duckhorn stake. Guidance and outlook: management reaffirmed FY2025 outlook — organic net sales growth expected 2–4% (guiding closer to the low end) and organic operating income growth 2–4% (guiding to the upper end); capex $180–190M; updated effective tax rate 20–22%. Key risks to monitor: tariff and trade actions (EU/Canada/Mexico) remain highly uncertain and could materially affect international sales and pricing; higher input costs (notably for tequila inventory) and distributor inventory targeting the low end of normal ranges. Investor implications: management is emphasizing premium brand momentum (Woodford, super‑premium whiskeys), route‑to‑consumer changes (e.g., own distribution in Japan and Italy; distributor change in California), cost savings from restructuring to fund growth investments, and active tariff mitigation — but investors should watch tequila gross‑cost inventory dynamics and ongoing tariff developments.