Brown-Forman Corporation has reported a 7% decrease in profits in its fourth quarter to $US894 million and a 5% drop for the full year to $US4 billion. 

The news sent the company’s shares plunging about 15%, with Brown-Forman revealing it anticipates the operating environment for fiscal 2026 will be “challenging with low visibility due to macroeconomic and geopolitical volatility as we face headwinds from consumer uncertainty, the potential impact from currently unknown tariffs, and lower non-branded sales of used barrels”.

Brown-Forman CEO Lawson Whiting blamed the company’s decreased profits on factors including concerns about a possible recession leading consumers to cut back on premium alcohol, tariff wars, American spirits continuing to be largely off shelf in Canada and “the big three” – GLP-1 (Ozempic and other weight loss drugs), cannabis and lower alcohol consumption by Gen Z .

While the first GLP-1 drug was released in 2005 to help ­diabetics, early users reported an unexpected side ­effect of weight loss and more recently its been shown to inhibit alcohol consumption.

“We’d be naive if we didn’t say that there isn’t some pressure coming from those,” Whiting said.

He noted that GLP-1s were largely a US-based issue at this time.

“I do think when we look at Europe compared to the United States, Europe, although some green shoots maybe in some big markets over there, but Europe has largely been seeing trends that are really the same as the United States, yet they don’t have the cannabis issue and the GLP-1s are not nearly as big.”

Aside from Ozempic-style drugs turning consumers off booze, Whiting said that holidays were being prioritised over alcohol as budgets tightened.

“I still would argue that it is the consumer and their wallet just doesn’t have as much money in it,” he said.

“They’re spending money on things like vacations and lodging and other things like that. But then when it trickles down and they go to the grocery store, I think in some cases, spirits has fallen out of the basket a little bit. And that isn’t obviously great.

“But on the tailwind side of things, there are some things that are doing well. Spirits continues to take share from beer and wine. So that dynamic hasn’t changed. Premiumisation is not at the same rate it was, it’s kind of stagnant a little bit, but I think that is good news for the most part. I think the consumers — they haven’t traded down necessarily. And you know our portfolio stays up at the much more on the premium side of things.”

Growth from Woodford Reserve and Jack Daniel’s Tennessee Whiskey was offset by the negative effect of foreign exchange and declines in other super-premium Jack Daniel’s expressions. These expressions included Jack Daniel’s Single Barrel and various other Jack Daniel’s special releases.

Organic net sales for el Jimador and Herradura declined double digits as the environment for the tequila category in the US “remained competitive” and Mexico’s economy continued to face a challenging macro environment.

Net sales for the RTD portfolio declined 6% and Jack Daniel’s RTD/RTP portfolio decreased 8%.

However, Whiting said there was still plenty for Brown-Forman to celebrate, with Woodford Reserve being the largest driver of organic net sales growth for the company in Q4.

“If you look at the Nielsen takeaway trends for the top 20 spirits brands by value for the 52 weeks ending in April, Woodford Reserve was one of only three brands growing,” he said.

“This reflects the strength of Woodford Reserve, but also the exceptionally challenging environment our industry is navigating right now.” 

Diplomatico also delivered strong double-digit organic net sales growth led by France and Germany, along with the travel retail channel.

Whiting concluded: “We’re entering fiscal ’26 with a healthy mix of realism and optimism as we anticipate that the year ahead will continue to be challenging. Despite headwinds, we believe that we have tremendous opportunities for long-term growth. And while we cannot control the external environment, we will focus on what is within our control and on the strategic initiatives that will unlock growth for our business, our brands and our people.”