Louisville-based Brown-Forman Corp. reported a slight decline in annual sales and earnings for fiscal 2026, citing ongoing economic pressures and shifting consumer behavior in the global beverage alcohol market, according to The Lane Report.

The maker of Jack Daniel's, Woodford Reserve and Old Forester reported net sales of $3.9 billion for the fiscal year ended April 30, down 1% from the previous year. Operating income declined 10% to $1 billion, while diluted earnings per share fell 17% to $1.53. However, President and CEO Lawson Whiting said the company outperformed internal expectations and strengthened its financial position through operational improvements and cost-management initiatives.

Brown-Forman generated $1 billion in operating cash flow during the year, an increase of $402 million compared to fiscal 2025. Free cash flow rose by $462 million to $893 million. The company also returned $827 million to shareholders through dividends and share repurchases, including a $400 million share repurchase program.

The company's whiskey portfolio posted a 3% increase in net sales, driven largely by the launch of Jack Daniel's Tennessee Blackberry and continued growth of Woodford Reserve. Brown-Forman's ready-to-drink portfolio also performed well, with net sales increasing 11%, while its New Mix brand posted a 41% sales increase.

However, those gains were partially offset by declines elsewhere. U.S. net sales declined 7% during fiscal 2026, reflecting lower volumes of Jack Daniel's Tennessee Whiskey and changes in distributor relationships. The tequila portfolio, including Herradura and el Jimador, saw net sales fall 4%.

Internationally, developed markets were essentially flat, while emerging markets delivered stronger growth. Net sales in emerging markets increased 14%, led by gains in Turkey, Brazil, the United Arab Emirates and Mexico. Brown-Forman's travel retail business also showed resilience, with sales increasing 6%.

The company's challenges reflect broader industry headwinds. The American whiskey sector faces what analysts describe as a market correction, with Brown-Forman announcing workforce reductions and closing its Louisville barrel-making plant earlier this year as part of cost-cutting measures. Industry observers point to changing consumer trends, potential tariff threats, and inventory concerns as ongoing pressures on Kentucky's signature industry.

Looking ahead to fiscal 2027, Brown-Forman expects business conditions to remain challenging as economic uncertainty and geopolitical instability continue to influence consumer spending. The company forecasts organic net sales to remain approximately flat during fiscal 2027, while organic operating income is expected to decline between 3% and 5%.