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What Happened to Brown-Forman This Year?

July 19, 2025
09:12 AM
4 min read
AI Enhanced
stocksfinancialconsumer staplesbeveragesmarket cyclesseasonal analysisgeopolitical

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The research indicates that What's remarkable is Brown-Forman (BF (noteworthy indeed). 41%) might be the first name in whiskey with brands Jack Daniel's, Woodford Reserve, and Old Forester, but the...

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investment

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Published

July 19, 2025

09:12 AM

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Key Topics
stocksfinancialconsumer staplesbeveragesmarket cyclesseasonal analysisgeopolitical

The re indicates that What's remarkable is Brown-Forman (BF (noteworthy indeed). 41%) might be the first name in whiskey with brands Jack Daniel's, Woodford Reserve, and Old Forester, but the distiller is close to last when it comes to the stock market

Over the past three years, the stock is down 63%, plunging through 2023 and 2024, even when the broad market was soaring

Through 2025, the stock has continued to struggle, plagued by consumer tastes shifting away from whiskey and alcohol more generally, and concerns tariffs as American spirits have been a primary target for foreign countries looking to punish American es for placing tariffs on their exports

Furthermore, As you can see from the chart below, the stock is down sharply this year and has woefully underperformed the S&P 500 year to date

B Total Return Price data by YCharts What's ailing Brown-Forman

Moreover, It's been a tough few years for the alcohol sector in general as health-related concerns around drinking, the rise of mocktails, and Gen Z preferences are putting pressure on demand for spirits, in this volatile climate

Additionally, Brown-Forman has been a target in the trade war due to a stable of well-known American brands Jack Daniel's, given the current landscape

The evidence shows company has continued to post revenue and fit declines, in light of current trends

In the third quarter of its fiscal 2025, which on Jan, given the current landscape. 31, revenue fell 3% to $1. 04 billion and net income slipped 6% to $270 million (something worth watching)

As you can see, Brown-Forman is still highly fitable thanks to the strength of its brands, but factors outside of its control are weighing on the

Those trends continued into the fourth quarter as revenue fell another 7% to $894 million, though adjusting for a $177 million gain on the sale of its Sonoma-Cutrer wine in the quarter the year before, operating income was up slightly from $198 million to $205 million

Furthermore, Moreover, A closer look at the numbers shows that the company is struggling with broad-based headwinds, amid market uncertainty

Management said the operating environment remained challenging due to " macroeconomic and geopolitical uncertainties. " Revenue was down in all of its geographies, though mostly from its divestitures of Finlandia and Sonoma-Cutrer, while gross margin declined 150 basis points

At the same time, Whiskey sales were a relative bright spot at flat for the year, though other beverage, including tequila, ready-to-drink, and the rest of its portfolio were all down

Image source: Getty Images

Additionally, What's next for Brown-Forman

Moreover, A mix of weakening consumer sentiment and trade issues have weighed on Brown-Forman so far this year, and that seems unly to change anytime soon

President Donald Trump has just issued a new round of tariffs on several major for the company, including the European Union

Meanwhile, the June Consumer Price Index showed price increases are accelerating again -- reflecting the tariffs that have already gone into effect and indicating the recent challenges facing the company could get worse

Additionally, Conversely, Rising prices, for example, could lead some customers to trade down to cheaper alternatives, in today's financial world

Brown-Forman's own guidance called for organic sales and operating income to decline by low single digits for fiscal 2026, considering recent developments

For investors, there's not much to get excited here (quite telling)

While Jack Daniel's is one of the biggest brands in spirits and makes up more than half of the company's volume sales, without growth the can do little more than generate fits to be returned as dividends

The company also did not repurchase many s, showing it's not trying to take advantage of the beaten-down stock price that way -- using its fits to reduce s outstanding and lift earnings per, considering recent developments

At a price-to-earnings ratio of 15 and a dividend yield of 3

Additionally, 4%, Brown-Forman offers reasonable value and a decent dividend, amid market uncertainty

But without a significant change in trade policy or a shift in consumer tastes, the stock is ly to continue to struggle for the foreseeable future (an important development), in this volatile climate

Jeremy Bowman has no position in any of the stocks mentioned

The Motley Fool has no position in any of the stocks mentioned

However, The Motley Fool has a disclosure policy, considering recent developments.