Brown-Forman Posts Lower Revenue and Operating Income but Higher Net Income and Diluted EPS in the three months ended July 31, 2026

Bottom line

For the three-month reporting period covered by 10-Q filed by BROWN FORMAN CORP under accession 0000014693-26-000052, the headline takeaway is a quarter that lost ground on top-line and operating earnings while still delivering higher bottom-line profit and a higher diluted result per share versus the prior-year quarter. Revenue from Contract with Customer, Excluding Assessed Tax moved lower year over year, slipping from $924,000,000 USD in the three months ended July 31, 2025 to $911,000,000 USD in the three months ended July 31, 2026. Operating Income (Loss) followed the same pattern, declining from $260,000,000 USD to $252,000,000 USD across the same two windows. Despite those declines, Net Income (Loss) Attributable to Parent rose from $170,000,000 USD to $176,000,000 USD, and Earnings Per Share, Diluted climbed from $0.36 per diluted share USD/SHARES to $0.38 per diluted share USD/SHARES. Both windows remained profitable on the net-income line and on the per-share line, so the transition was profit to profit on each, but the directions diverged: revenue and operating income headed lower while net income and diluted EPS headed higher. The filing evidence does not attribute this change to any single cause.

The filing itself is identified as a quarterly report on 10-Q for period-ended-2026-07-31, filed by BROWN FORMAN CORP (ticker BF-B, CIK 0000014693) with accession 0000014693-26-000052. The reporting period under analysis is the three-month window represented by the three months ended July 31, 2026, compared against the prior-year three-month comparative represented by the three months ended July 31, 2025. Source scope for this section is limited to the income-statement figures carried in the catalog for that three-month period; no full-year, year-to-date, or segment-level numbers are introduced in this section, and the balance sheet, cash-flow statement, and share-count detail are deferred to later sections.

Several forward-looking risk factors recited in the filing's cautionary note frame how the reader should interpret any softness in revenue or operating income, including dependence on the Jack Daniel's family of brands, competitive pressure from new entrants and consolidations, route-to-consumer timing shifts, foreign-currency exposure to a stronger U.S. dollar, and changes in consumer preferences. Those risk-factor statements are taken verbatim from the filing's cautionary language and are not management's explanation of the specific quarter-to-quarter change; The filing evidence does not attribute this change to any single cause. applies here as well, because the filing evidence does not attribute this quarter's revenue or operating-income movement to any single cause. The filing evidence contains no peer or industry comparison.

Financial performance

For BROWN FORMAN CORP (BF-B), the three-month reporting period covered by 10-Q for fiscal period period-ended-2026-07-31 under accession 0000014693-26-000052 shows a mixed quarter when set against the same window one year earlier. The top line softened: $911,000,000 was lower than $924,000,000, an authorized year-over-year decrease on a positive-to-positive transition. Operating profitability also pulled back, with $252,000,000 registering as a profit that was lower than the prior-year operating profit $260,000,000. Despite those contractions, the bottom line still grew. $176,000,000 finished higher than $170,000,000, and the diluted earnings picture followed the same path, with $0.38 per diluted share exceeding $0.36 per diluted share on a profit-to-profit comparison. The filing evidence does not attribute this change to any single cause.

Because every reportable metric here belongs to the income statement, the accounting context for this section is the consolidated statement of operations and the related earnings-per-share note, which together govern revenue recognition, cost of sales, advertising and promotion expense, and the diluted share count that flows into EPS. The fiscal calendar implied by the filing is a fiscal-year basis running to April, which means this three-month period is one slice of that off-calendar year rather than a calendar quarter. The revenue figure cited above is described in the filing as "Revenue from Contract with Customer, Excluding Assessed Tax," consistent with the post-Topic (omitted) presentation in which excise taxes are excluded from the top line. The diluted EPS key is taken at the consolidated entity level, after attributing net income to the parent and adjusting for participating securities under the two-class method. The filing evidence does not attribute this change to any single cause.

For the comparison baseline, the prior-year quarterly columns in the same statement are the only direct read on year-over-year movement for this section. The filing also breaks out net sales by market aggregations and brand families, including the Jack Daniel's family of brands, the Woodford Reserve family of brands, the Old Forester family of brands, the Herradura family of brands, el Jimador, and the rest-of-portfolio lines such as Diplomático, Gin Mare, Chambord, and Fords Gin, plus emerging markets, Travel Retail, and non-branded and bulk, but the cited revenue, operating income, net income, and EPS figures here are reported at the consolidated level. The filing evidence does not disclose segment-level detail for this dimension.

Peer benchmarking and any industry cross-checks against beverage-alcohol comparables such as the recent Costco Wholesale Posts Higher Revenue, Operating Income, Net Income, and Diluted EPS on Both the Quarter and the Eight-Month Year-to-Date Windows read are not contained in the filing evidence for this filing. The filing evidence contains no peer or industry comparison. Forward-looking guidance and analyst expectation inputs are likewise not part of the filing evidence for this section.

Operating drivers and segments

BROWN FORMAN CORP reports through a single consolidated spirits segment in this 10-Q for the three months ended July 31, 2026, so the headline top line captures the entire branded portfolio without separately disclosed whiskey, wine, or ready-to-drink buckets. Revenue from Contract with Customer, Excluding Assessed Tax came in at $911,000,000 for the three months ended July 31, 2026, lower than the $924,000,000 posted in the three months ended July 31, 2025, continuing the softer top-line pattern already visible across the year-to-date comparisons. Operating Income (Loss) for the three months ended July 31, 2026 landed at $252,000,000, a decrease from the $260,000,000 recorded in the three months ended July 31, 2025, so the consolidated operating margin profile compressed even though no segment split is broken out for the reader to audit. Because the filing presents one combined operating segment for this interim period, the company does not separately quantify whiskey versus wine versus emerging brands, and the consolidated numbers above are the only margin-level evidence a reader can directly observe.

The forward-looking-statement disclosures and risk-factor language in Item 1A frame the period results against a backdrop that the company itself flags, including substantial dependence on the continued growth of the Jack Daniel's family of brands, intensifying competition from new entrants and consolidations, possible route-to-consumer timing shifts, foreign-currency exposure, and uncertainty around U.S. and foreign trade policies, tariffs, and import or export regulations. Management also highlights evolving consumer preferences away from larger producers or brown spirits, demographic and health-and-wellness shifts, on-premise channel softness, and the imprecision of supply and demand forecasting as factors that could weigh on reported numbers. These statements describe the operating environment but do not point to a single quantitative driver for the decline in revenue or operating income shown for the three months ended July 31, 2026.

Cash flow and capital

Operating cash generation during the three months ended July 31, 2026 remained in positive territory at $173,000,000, building on the comparable inflow of $160,000,000 recorded during the three months ended July 31, 2025. The catalog permits the plain reading that the current-quarter operating line increased against the prior-year comparative quarter, which is consistent with the top-line and earnings picture discussed earlier in this report. The period-end the balance sheet date of July 31, 2026 cash and equivalents position stood at $301,000,000, a headline liquidity buffer the company carried against the cash demands described below. The filing evidence does not attribute this change to any single cause.

Investing activity told a different story. Net cash used in investing activities during the three months ended July 31, 2026 was -$13,000,000, moving opposite to the comparable net inflow of $2,000,000 during the three months ended July 31, 2025. The shift from a positive to a negative investing line is a permitted transition; how the composition changed between acquisitions, asset sales, and capital spending is not disclosed in the quoted excerpts. Within that investing envelope, capital expenditure in the form of payments to acquire property, plant, and equipment was $12,000,000 during the three months ended July 31, 2026, compared with $31,000,000 during the three months ended July 31, 2025. The catalog flags both periods as positive and notes the current quarter was lower than the prior-year comparative, suggesting a more measured capex stance than the year-ago period. The cited supply-contract amortization language in Note 5 and the asset-sale language in Note 4 sit in the same notes section that frames these investing movements. The filing evidence does not attribute this change to any single cause.

Financing activity stayed on the outflow side, with net cash used in financing of -$164,000,000 during the three months ended July 31, 2026, compared with -$138,000,000 during the three months ended July 31, 2025. The catalog confirms the current line was a smaller use than the prior-year comparative, while both quarters remained in negative territory. The largest visible component is the ordinary dividend on common stock, paid in the amount of $106,000,000 during the three months ended July 31, 2026 versus $107,000,000 during the three months ended July 31, 2025, with the current quarter's payout described as lower than the prior-year comparative. The long-term debt balance, excluding current maturities, was $2,083,000,000 at the balance sheet date of July 31, 2026, providing context for the financing-line outflows but, in the quoted excerpts, not linked to a specific quarterly borrowing or repayment figure that the catalog surfaces.

The working-capital snapshot at the balance sheet date of July 31, 2026 shows accounts payable and other accrued liabilities, current, of $700,000,000, sitting alongside the cash balance and the long-term debt figure already noted. Together these three point-in-time items frame the capital structure that the operating, investing, and financing flows above are acting upon. The catalog permits reading the the balance sheet date of July 31, 2026 cash position alongside the the balance sheet date of July 31, 2026 long-term debt balance, but does not authorize a leverage or coverage figure; any such ratio sits outside the placeholders available to this section. The restructuring initiative referenced in the quoted glossary and the closed Louisville-based Brown-Forman Cooperage together describe the structural cost reduction and footprint consolidation that contextualizes the period's capex and operating profile, without the materials tying those actions to a specific cash line. The filing evidence does not attribute this change to any single cause. The filing evidence contains no peer or industry comparison.

Peer and historical context

Year-over-year, the top-line result softened while the bottom-line and cash-generation result strengthened — a pattern consistent with margin expansion rather than volume-led growth. The organic-trend mechanic the issuer describes (subtracting depletion-based change from organic change to estimate distributor-inventory movement) hints at working-capital dynamics that could pull reported results in either direction, which complicates any read on underlying demand.

On the historical axis, the three months ended July referenced in this Form 10-Q are compared directly against the three months ended July 31, 2025. Revenue from Contract with Customer, Excluding Assessed Tax was $911,000,000 USD for the current period and $924,000,000 USD for the prior-year period, with the authorized year-over-year direction reading as a decrease. Operating Income (Loss) was $252,000,000 USD versus $260,000,000 USD, also a decrease on the authorized comparison despite remaining in profit territory. Net Income (Loss) Attributable to Parent, however, ran $176,000,000 USD against $170,000,000 USD and registered an authorized increase, with the transition staying profit to profit. Operating cash flow tells a similar divergence: Net Cash Provided by (Used in) Operating Activities was $173,000,000 USD for the current period versus $160,000,000 USD for the prior year, with the authorized direction reading as an increase. The transition in both earnings and operating-income columns is profit to profit, and the operating-cash-flow transition is positive to positive.

On the peer axis, the filing evidence is silent — The filing evidence contains no peer or industry comparison. applies, so no spirits, beverage, or consumer-staples comp set can be cited from this filing. Readers looking for a cross-company read can look elsewhere on the Lizely Finance Insights feed; among recent interim posts, the Costco Wholesale Posts Higher Revenue, Operating Income, Net Income, and Diluted EPS on Both the Quarter and the Eight-Month Year-to-Date Windows piece sits closest in form type to this period-ended-2026-07-31 snapshot, though it covers a different industry. The Smith (A O) and AES Corp interim write-ups offer further quarterly contrasts for triangulation.

For the year-over-year movement itself, The filing evidence does not attribute this change to any single cause. — the cited filing does not attribute the change to any single cause. The restructuring initiative approved in January (omitted), the Korbel relationship change effective June (omitted), and the Brown-Forman Cooperage closure are referenced in the notes but not linked by the issuer to specific period-to-period deltas here. Historical context also includes the supply-contract intangible described in the cited note, with amortization capitalized into inventories — amounts capitalized were zero in the two three-month windows shown, which keeps that mechanism off the comparison.

Scenario analysis

In the base case, BROWN FORMAN CORP (BF-B) sustains its current earnings trajectory into the three months ended July 31, 2026, with Net Income (Loss) Attributable to Parent moving from $170,000,000 USD in the three months ended July 31, 2025 to $176,000,000 USD in the three months ended July 31, 2026, and Revenue from Contract with Customer, Excluding Assessed Tax moving from $924,000,000 USD to $911,000,000 USD. Operating cash generation continues to support ordinary dividend payments, capital spending on property, plant, and equipment stays within historical norms, and the restructuring initiative referenced in the cited note remains closed with no further charges anticipated. The filing evidence does not attribute this change to any single cause.

The upside case assumes a constructive environment for premium spirits demand, allowing the top line to outpace the reported direction for Revenue from Contract with Customer, Excluding Assessed Tax and supporting an above-trend expansion of Net Income (Loss) Attributable to Parent relative to the prior-year quarter. Disciplined cost management and the absence of further restructuring charges would reinforce operating leverage. Free cash flow conversion improves as Payments to Acquire Property, Plant, and Equipment moderate, providing flexibility for incremental capital returns while preserving balance-sheet capacity. Comparable upside readings in adjacent consumer-staples issuers, such as the SMITH A O CORP (AOS) Reports Softer Revenue, Operating Income, Net Income, and Diluted EPS on Both the Quarter and Six-Month Year-to-Date Views in Form (Accession filing, illustrate how a stronger quarter can diverge from a softer one across the same reporting window. The filing evidence does not attribute this change to any single cause.

The downside case contemplates a further softening in Revenue from Contract with Customer, Excluding Assessed Tax versus the reported direction, paired with continued pressure on Net Income (Loss) Attributable to Parent even as it remains in profit territory. Payments of Ordinary Dividends, Common Stock contract alongside lower earnings, and Payments to Acquire Property, Plant, and Equipment are pulled back as the company preserves liquidity. Net Cash Provided by (Used in) Investing Activities remains in outflow territory, and the contribution from financing activities stays negative. Legal contingencies tracked under Item 1 and the controls and procedures discussion under Item 4 introduce additional uncertainty, though no specific loss is quantified here. The filing evidence does not attribute this change to any single cause.

Across all three conditional paths, the cited references to forward-looking statements, market risk, and legal proceedings frame the risk boundaries without prescribing a single trajectory. The filing evidence contains no peer or industry comparison.

Risks and what to watch

Reported facts The three-month revenue for BROWN FORMAN CORP under 10-Q for the three months ended July 31, 2026 came in at $911,000,000 USD, lower than the prior-year comparative of $924,000,000 USD booked in the three months ended July 31, 2025. Net income attributable to parent for the same window was $176,000,000 USD, higher than the prior-year $170,000,000 USD. The combination of a softer top line alongside a stronger bottom line is the central tension readers should weigh before drawing a simple read on the quarter.

Management explanations The filing describes a Board-approved restructuring initiative, implemented in the year after approval and now substantially completed, for which management states no further charges are expected. Aggregate charges of roughly the disclosed magnitude were taken, split across severance and other employee costs, other restructuring items tied to the cited note covering the Brown-Forman Cooperage facility closure plus consulting fees, and cooperage asset impairments. Management also describes a supply contract whose amortization is being capitalized into inventories based on the actual realization of the benefit, with no amortization capitalized in the current three-month period. Contingency language signals that a number of suits and claims remain open, with accruals adjusted as facts evolve.

Analyst inference The reported facts can be read together with the authorized comparisons, none of which attribute cause: revenue moved lower year over year while net income moved higher. The direction in operating income was lower, the swing in net cash from investing flipped from positive to negative, net cash from financing was more negative, and operating cash flow moved higher. Restructuring, supply-contract accounting, and the legal contingencies named in Item 1 and Item 1A form the qualitative backdrop against which those movements sit, but any single cause for the gap between revenue and earnings is The filing evidence does not attribute this change to any single cause.. A useful frame for sober comparison with peers is the SMITH A O CORP (AOS) Reports Softer Revenue, Operating Income, Net Income, and Diluted EPS piece, since it captures a similar softer-top-line pattern, while direct peer benchmarking is The filing evidence contains no peer or industry comparison. here.

Counter-evidence The Cooperage facility closure and the related impairment charges referenced in the cited note represent real cash and book costs that argue against a benign read of the higher net income. Capitalized barrel amortization, ongoing restructuring, and unresolved suits each carry execution risk that can reappear in later quarters.

Unknowns Segment-level detail for the headline items is The filing evidence does not disclose segment-level detail for this dimension. in the filing evidence, so the geographic and brand mix behind the revenue move cannot be confirmed from this filing. The pace of any residual restructuring cash outflows and the timing of legal-contingency outcomes, addressed in Item 4 and Item 6, are also unresolved.

Metrics to watch next period Readers should track whether the revenue trend stabilizes, whether operating-income direction reverses, how the supply-contract amortization runs through inventory as barrels are sold under Note 5, any further disclosure tied to Note 4, and the cadence of payments, financing, and investing flows described in the reported comparisons. Forward-looking caveats sit in Item 6.