# Brown-Forman rides emerging markets strength despite weak U.S. demand **Published:** 2026-09-02T15:34:06.000Z **Source:** [Lane Report (KY Business)](https://www.lanereport.com/189262/2026/09/brown-forman-first-quarter-2027-earnings-sales/) **AI-generated:** yes (claude-haiku-4-5-20251001) **Canonical:** https://feeds.lexingtonky.news/article/brown-forman-rides-emerging-markets-strength-despite-weak-u-s-demand LOUISVILLE, Ky. — [Brown-Forman Corp. reported a slight decline in first-quarter sales](https://www.lanereport.com/189262/2026/09/brown-forman-first-quarter-2027-earnings-sales/) as the Louisville-based spirits company navigates softer alcohol demand in developed markets, though emerging international markets and ready-to-drink products provided bright spots. The company reported net sales of $911 million for the first quarter of fiscal 2027, down 1% from the same period a year earlier, with organic net sales also declining 1%. Operating income fell 3% to $252 million, although it increased 4% on an organic basis. Diluted earnings per share increased 6% to 38 cents for the quarter ended July 31. "Our first quarter results were largely in line with our expectations and reinforce our confidence in the year ahead," said Lawson Whiting, president and CEO of Brown-Forman. Ready-to-drink products emerged as the company's strongest category, with reported sales increasing 20% and organic sales rising 11%. New Mix, Brown-Forman's tequila-based ready-to-drink brand, led the surge with sales increasing 48%, or 36% organically, driven by strong consumer demand in Mexico and the brand's recent introduction in the United States. Emerging international markets also delivered significant growth, with reported net sales increasing 11% and organic sales rising 9%, led by Mexico and double-digit growth from New Mix. However, the company's broader tequila portfolio continued to struggle, with tequila sales declining 12%, or 13% organically. Herradura sales fell 17%, primarily due to lower U.S. volumes and reduced net pricing in Mexico. The company's whiskey portfolio remained essentially flat during the quarter. While flagship Jack Daniel's Tennessee Whiskey sales were flat, the international expansion of Jack Daniel's Tennessee Blackberry helped offset declines in Jack Daniel's Tennessee Honey and Gentleman Jack. [Developed international markets remained a source of pressure](https://www.lanereport.com/), with sales declining 6% and organic sales falling 8%, driven partly by lower Jack Daniel's Tennessee Whiskey volumes in Germany, France and Spain. U.S. net sales decreased 3% on a reported basis but were flat organically. The company attributed the reported decline partly to the end of its relationship with Korbel, changes in distributor inventories and lower volumes of Jack Daniel's Tennessee Blackberry. The results reflect broader industry headwinds facing the spirits market. [Combined U.S. wine and spirits volume decline slowed to 6.5% over the 12 months to June 2026](https://www.thespiritsbusiness.com/2026/08/us-spirits-volume-decline-slows-to-6-5/), as consumers grapple with macroeconomic pressures, health concerns and changing consumption habits. Despite the mixed performance, Brown-Forman improved its gross margin during the quarter, which expanded 40 basis points to 60.2%, reflecting lower costs and the end of the Korbel relationship, partially offset by unfavorable foreign exchange and price/mix effects. Cash flow from operations increased $13 million to $173 million, while free cash flow increased $32 million to $161 million. The company's board declared a quarterly dividend of 23.10 cents per share, payable Oct. 1 to shareholders of record Sept. 3. Brown-Forman has paid regular quarterly cash dividends for 82 consecutive years and increased its regular dividend for 42 consecutive years. Despite the first-quarter performance, Brown-Forman reaffirmed its full-year fiscal 2027 outlook, expecting organic net sales to be approximately flat for the year and organic operating income to decline between 3% and 5%. The company expects an effective tax rate of approximately 20% to 22% and capital expenditures between $60 million and $70 million. Management continues to describe the broader operating environment as challenging, citing macroeconomic pressures and geopolitical instability affecting consumer behavior and beverage alcohol consumption, particularly in developed markets. The question for the remainder of fiscal 2027 will be whether momentum from ready-to-drink products, New Mix and Jack Daniel's Tennessee Blackberry can grow enough to counter continued pressure on traditional spirits categories and developed markets. ## Sources - [Lane Report (KY Business)](https://www.lanereport.com/189262/2026/09/brown-forman-first-quarter-2027-earnings-sales/) - [The Spirits Business coverage of U.S. spirits volume trends](https://www.thespiritsbusiness.com/2026/08/us-spirits-volume-decline-slows-to-6-5/) - [Brown-Forman Corporation information](https://www.brown-forman.com/) --- This article was generated by AI (claude-haiku-4-5-20251001) based on source material from Lane Report (KY Business), enriched with 2 web searches. The original source is available at https://www.lanereport.com/189262/2026/09/brown-forman-first-quarter-2027-earnings-sales/.