Brown-Forman Inc. (NYSE: BF), parent company of Jack Daniel’s, saw stock drop after reporting weaker-than-expected first-quarter fiscal 2025 earnings. Earnings per share of 36 cents missed analyst estimates of 37 cents. Quarterly sales of $924 million exceeded the Street view of $914.464 million.

Net sales decline driven by prior-year TSA absence related to Sonoma-Cutrer. Core whiskey portfolio sales flat, new launches partially supporting. Tequila segment down 1%, ready-to-drink beverages up 6%. U.S. sales fell 8%, developed international markets dropped 8%, while emerging markets grew 20%.

Gross margin expanded by 40 basis points, offset by higher costs and unfavorable price/mix. Operating income decreased 7% to $260 million. Operating margin declined to 28.2% due to foreign exchange headwinds and restructuring effects. Company reaffirmed fiscal 2026 outlook for organic net sales and operating income to decline in low-single-digit range.

Brown-Forman expects effective tax rate of 21-23%, with planned capital expenditures between $125 million and $135 million. Uncertain near-term outlook due to macroeconomic and geopolitical volatility. Management emphasizes focus on long-term growth through U.S. distribution changes, restructuring initiative, and new product innovation.

Stock price of BF.B shares trading 5.58% lower at $28.75. Company remains confident in ability to create long-term value for shareholders amidst challenging operating environment. Brown-Forman anticipates tough fiscal 2026 with market pressures and uncertain outlook, but focuses on future growth opportunities.

Read more at Yahoo Finance: Jack Daniel’s Parent Brown-Forman Keeps Outlook Steady While Flagging Market Pressures