Brown Forman : Q2 2026 Brown-Forman Corp Earnings Conference Call presentation

First Half of Fiscal 202C

December 4, 2025

Highlights: First Half of Fiscal 202C

GEOGRAPHY

Growth from Emerging International markets and the Travel Retail channel was more than offset by declines in Developed International markets and the U.S.

(4)% (flat organic1)

Net sales declined due to the end of the Korbel relationship and the absence of the Sonoma-Cutrer prior-year TSA

59.5%

30 basis points of gross margin expansion

Capital Allocation

The Brown-Forman Board of Directors authorized a sN00M share repurchase program and increased the quarterly cash dividend for the N2nd consecutive year.

Cash flows from operations grew by s193M to s292M

and free cash flow1 increased by s179M to s239M.

INNOVATION

Launch of Jack Daniel's Tennessee Blackberry

HEADWINDS

Lower used barrel sales and American products remaining off the shelf in Canada

1 See appendix for reconciliations from GAAP measures to most comparable Non-GAAP measures, Non-GAAP measure definitions, and additional information.

First Half of Fiscal 202C Results

Net Sales	Reported ($ in millions, except per share amount)	Reported Change (%)	Acquisitions & Divestitures (+/-)	Other Items1 (+/-)	Foreign Exchange (+/-)	Organic Change2 (%)
	s1,990	(N)%	N%	-%	-%	-%
Gross Profit	s1,197	(N)%	1%	-%	-%	(3)%
Advertising Expense	s2N9	(2)%	3%	-%	(1)%	(1)%
SG&A Expense	s39N	(3)%	-%	-%	(1)%	(N)%
Operating Income	sU9U	(9)%	3%	1%	1%	(N)%
Diluted EPS	s0.83	(13)%

1"Other items" includes "Substitution Drawback Claims," "Franchise Tax Refund," and "Restructuring Initiative". See "Non-GAAP Financial Measures and Reconciliation" for additional details.

2See appendix for Non-GAAP measure definitions and additional information.

REPORTED ORGANIC1

Net Sales Across Categories

Whiskey

Reported

1H F26 1H F25

Organic 1

1H F26 1H F25

WHISKEY

(1)%

-%

WHISKEY

-%

-%

Jack Daniel's Tennessee Whiskey

JACK DANIEL'S TENNESSEE WHISKEY

Woodford Reserve

WOODFORD RESERVE

(6)%

(1)%

6%

Old Forester

8%

JACK DANIEL'S TENNESSEE WHISKEY

(6)%

Woodford Reserve

Whiskey

WOODFORD RESERVE

-%

6%

Old Forester

OLD FORESTER

Ready-to-Drink

READY-TO-DRINK

TEQUILA

Tequila

Ready-to-Drink

(3)%

(17)%

Tequila

(6)%

2%

11%

5%

2%

Jack Daniel's...

OLD FORESTER

8%

11%

READY-TO-DRINK

5%

2%

TEQUILA

(17)%

(3)%

Rest of Portfolio

(35)%

REST OF PORTFOLIO (26)%

REST OF PORTFOLIO

22%

Rest of Portfolio

-%

1H F26 1H F25 1H F26 1H F25

1 See appendix for reconciliations from GAAP measures to most comparable Non-GAAP measures, Non-GAAP measure definitions, and additional information. Note: Results are on a reported basis and change is versus the prior-year period, unless otherwise noted. Totals may differ due to rounding.

Net Sales Across Geographic Aggregations 1H F26 1H F25 1H F26 1H F25

REPORTED CHANGE

ORGANIC CHANGE1

-%

(3)%

(9)% (7)%

U.S.

(6)%

(3)%

(4)% (5)%

ORGANIC CHANGE1

REPORTED CHANGE

DEVELOPED INTERNATIONAL

(3)%

6%

12%

10%

ORGANIC CHANGE1

REPORTED CHANGE

EMERGING

(3)%

(5)%

6%

7%

ORGANIC CHANGE1

REPORTED CHANGE

TRAVEL RETAIL

1 See appendix for reconciliations from GAAP measures to most comparable Non-GAAP measures, Non-GAAP measure definitions, and additional information. Note: Results are on a reported basis and change is versus the prior-year period, unless otherwise noted. Totals may differ due to rounding.

Gross Margin

1.9% -%

(0.U)%

U9.2%

U9.U%

(1.1)%

Gross Margin Expansion of 30 Basis Points

1H F25 Acquisitions &

Divestitures

Foreign Exchange

Price/Mix Cost 1H F26

Note: Results are on a reported basis and change is versus the prior-year period, unless otherwise noted. Totals may differ due to rounding.

Fiscal 202C Outlook

Organic1 net sales decline in the

low-single digit range.

Organic1 operating income decline in the low-single digit range.

Capital expenditures range updated from $125 to $135 million to $110 to $120 million.

Effective tax rate in the range of approximately 21% to 23%.

1 See appendix for Non-GAAP measure definitions and additional information.

Appendix

Non-GAAP Financial Measures and Reconciliation: F2C vs. F25

Use of Non-GAAP Financial Information. We report our financial results in accordance with U.S. generally accepted accounting principles (GAAP). Additionally, we use some financial measures in this this presentation that are not measures of financial performance under GAAP. These non-GAAP measures, defined below, should be viewed as supplements to (not substitutes for) our results of operations and other measures reported under GAAP. Other companies may define or calculate these non-GAAP measures differently.

"Organic change" in measures of statements of operations. We present changes in certain measures, or line items, of the statements of operations that are adjusted to an "organic" basis. We use "organic change" for the following measures: (a) organic net sales; (b) organic cost of sales; (c) organic gross profit; (d) organic advertising expenses; (e) organic selling, general, and administrative (SG&A) expenses; (f) organic other expense (income), net; (g) organic operating expenses*; and (h) organic operating income. To calculate these measures, we adjust, as applicable, for (1) acquisitions and divestitures, (2) other items, and (3) foreign exchange. We explain these adjustments below.

• "Acquisitions and divestitures." This adjustment removes (a) the gain or loss recognized on sale of divested brands and certain assets, (b) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction, transition, and integration costs), (c) the effects of operating activity related to acquired and divested brands, including certain divested agency brands, for periods not comparable year over year (non-comparable periods), and (d) fair value changes to contingent consideration liabilities. Excluding non-comparable periods allows us to include the effects of acquired and divested brands only to the extent that results are comparable year over year. For the first and second quarters of fiscal 2026, we had the following acquisitions and divestitures adjustments:

  During fiscal 2023, we acquired Gin Mare Brand, S.L.U. and Mareliquid Vantguard, S.L.U., which owned the Gin Mare brand (Gin Mare). This adjustment removes the fair value adjustments to Gin Mare's contingent consideration liability that is payable in cash no later than July 2027 from our other expense (income), net and operating income.

  During fiscal 2024, we sold our Finlandia vodka and Sonoma-Cutrer wine businesses and entered into related transition services agreements (TSAs) for these businesses. This adjustment removes the net sales, cost of sales, operating expenses, and operating income recognized pursuant to the TSAs related to distribution services in certain markets for the non-comparable period, which is activity from the first and second quarters of fiscal 2025.

  During the first quarter of fiscal 2025, we recognized a gain of $12 million on the sale of the Alabama cooperage. This adjustment removes the gain from our other expense (income), net and operating income.

  During the first quarter of fiscal 2026, we ended our sales, marketing, and distribution relationship with Korbel Champagne Cellars (Korbel relationship), effective June 30, 2025. This adjustment removes the net sales, cost of sales, operating expenses, and operating income for the non-comparable period, which is July through October of fiscal 2025 and 2026.

• "Other items." Other items include the additional items outlined below.

"Franchise tax refund." During the first quarter of fiscal 2025, we recognized a $13 million franchise tax refund due to a change in franchise tax calculation methodology for the state of Tennessee. This modification lowered our annual franchise tax obligation and was retroactively applied to franchise taxes paid during fiscal 2020 through fiscal 2023. This adjustment removes the franchise tax refund from our other expense (income), net and operating income.

"Restructuring initiative." During the third quarter of fiscal 2025, our Board of Directors approved a plan to reduce our structural cost base and realign resources toward future sources of growth. This included reducing our workforce by approximately 12% and closing the Louisville-based Brown-Forman Cooperage. We also offered a special, one-time early retirement benefit to qualifying U.S. employees. During the first and second quarters of fiscal 2026, we incurred $16 million in restructuring and other charges associated with this initiative and completed the sale of the Brown-Forman Cooperage facility and related assets. Comparatively, we incurred $2 million in related restructuring and other charges in the second quarter of fiscal 2025, prior to the restructuring initiative's announcement. This adjustment removes the restructuring initiative impact from our operating expenses and operating income for the second quarter of fiscal 2025 and the first half of fiscal 2026.

"Substitution drawback claims." During the first quarter of fiscal 2026, we recognized a net benefit of $18 million related to the collection of substitution drawback claims filed with the U.S. Government between fiscal 2016 and 2019. As of the first quarter of fiscal 2026, all claims have been collected. This adjustment removes the benefit from our other expense (income), net and operating income.

*Organic operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net