bfb-20250731

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File No. 001-00123

Brown-Forman Corporation

(Exact name of Registrant as specified in its Charter)


Delaware		61-0143150
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification No.)

850 Dixie Highway
Louisville,	Kentucky	40210
(Address of principal executive offices)		(Zip Code)

(502) 585-1100

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock (voting), $0.15 par value	BFA	New York Stock Exchange
Class B Common Stock (nonvoting), $0.15 par value	BFB	New York Stock Exchange
1.200% Notes due 2026	BF26	New York Stock Exchange
2.600% Notes due 2028	BF28	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: August 22, 2025


Class A Common Stock (voting), $0.15 par value			169,143,808
Class B Common Stock (nonvoting), $0.15 par value			303,608,875


BROWN-FORMAN CORPORATION
Index to Quarterly Report Form 10-Q

		Page
PART I - FINANCIAL INFORMATION		3

Item 1.	Financial Statements (Unaudited)	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33

Item 4.	Controls and Procedures	33

PART II - OTHER INFORMATION		34

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Defaults Upon Senior Securities	34

Item 4.	Mine Safety Disclosures	34

Item 5.	Other Information	34

Item 6.	Exhibits	34

SIGNATURES		35

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in millions, except per share amounts)


	Three Months Ended
	July 31,
		2024		2025
Sales		$	1,211	$	1,191
Excise taxes		260		267
Net sales		951		924
Cost of sales		386		372
Gross profit		565		552
Advertising expenses		126		120
Selling, general, and administrative expenses		188		177

Restructuring and other charges		—		12

Other expense (income), net		(30)		(17)
Operating income		281		260
Non-operating postretirement expense		—		19
Interest income		(4)		(4)
Interest expense		32		25

Income before income taxes		253		220
Income taxes		58		50
Net income		$	195	$	170
Earnings per share:
Basic		$	0.41	$	0.36
Diluted		$	0.41	$	0.36

See notes to the condensed consolidated financial statements.

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in millions)


	Three Months Ended
	July 31,
		2024		2025
Net income		$	195	$	170
Other comprehensive income (loss), net of tax:
Currency translation adjustments		(42)		25
Cash flow hedge adjustments		(2)		2
Postretirement benefits adjustments		1		9
Net other comprehensive income (loss)		(43)		36
Comprehensive income		$	152	$	206

See notes to the condensed consolidated financial statements.

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in millions, except per share amounts)


	April 30, 2025		July 31, 2025
Assets
Cash and cash equivalents	$	444	$	471
Accounts receivable, less allowance for doubtful accounts of $7 at April 30 and $8 at July 31	830		847
Inventories:
Barreled whiskey	1,567		1,584
Finished goods	476		515
Work in process	378		385
Raw materials and supplies	90		102
Total inventories	2,511		2,586
Assets held for sale	121		—
Other current assets	289		274
Total current assets	4,195		4,178
Property, plant and equipment, net	1,095		1,094
Goodwill	1,505		1,507
Other intangible assets	981		1,071

Deferred tax assets	47		48
Other assets	263		273
Total assets	$	8,086	$	8,171
Liabilities
Accounts payable and accrued expenses	$	741	$	687
Dividends payable	—		107
Accrued income taxes	27		77
Short-term borrowings	312		282
Current portion of long-term debt	—		344

Total current liabilities	1,080		1,497
Long-term debt	2,421		2,075
Deferred tax liabilities	241		242
Accrued pension and other postretirement benefits	164		173
Other liabilities	187		196
Total liabilities	4,093		4,183
Commitments and contingencies
Stockholders’ Equity
Common stock:
Class A, voting, $0.15 par value (170,000,000 shares authorized; 170,000,000 shares issued)	25		25
Class B, nonvoting, $0.15 par value (400,000,000 shares authorized; 314,532,000 shares issued)	47		47
Additional paid-in capital	36		34
Retained earnings	4,710		4,666
Accumulated other comprehensive income (loss), net of tax	(220)		(184)
Treasury stock, at cost (11,863,000 and 11,779,000 shares at April 30 and July 31, respectively)	(605)		(600)
Total stockholders’ equity	3,993		3,988
Total liabilities and stockholders’ equity	$	8,086	$	8,171

See notes to the condensed consolidated financial statements.

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in millions)


	Three Months Ended
	July 31,
	2024		2025
Cash flows from operating activities:
Net income	$	195	$	170
Adjustments to reconcile net income to net cash provided by operations:



Depreciation and amortization	22		22
Stock-based compensation expense	4		4
Deferred income tax benefit	(5)		(8)

Change in fair value of contingent consideration	4		—

Other, net	(10)		3
Changes in assets and liabilities:
Accounts receivable	(42)		(13)
Inventories	(91)		(61)
Other current assets	(2)		15
Accounts payable and accrued expenses	(104)		(46)
Accrued income taxes	54		51
Other operating assets and liabilities	(8)		23
Cash provided by operating activities	17		160
Cash flows from investing activities:





Additions to property, plant, and equipment	(41)		(31)



Proceeds from sale of cooperage assets	51		33



Cash provided by investing activities	10		2
Cash flows from financing activities:


Net change in short-term borrowings	54		(30)




Payments of withholding taxes related to stock-based awards	(2)		(1)


Dividends paid	(103)		(107)


Cash used for financing activities	(51)		(138)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(6)		3
Net increase in cash, cash equivalents, and restricted cash	(30)		27
Cash, cash equivalents, and restricted cash at beginning of period	456		463
Cash, cash equivalents, and restricted cash at end of period	426		490
Less: Restricted cash (included in other current assets) at end of period	(10)		(19)

Cash and cash equivalents at end of period	$	416	$	471
Supplemental information:
Non-cash additions to property, plant and equipment	$	6	$	2
Right-of-use assets obtained in exchange for new lease obligations	$	15	$	14

See notes to the condensed consolidated financial statements.

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In these notes, “we,” “us,” “our,” “Brown-Forman,” and the “Company” refer to Brown-Forman Corporation and its consolidated subsidiaries, collectively.

1. Condensed Consolidated Financial Statements

We prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information. In accordance with those rules and regulations, we condensed or omitted certain information and disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). In our opinion, the accompanying financial statements include all adjustments, consisting only of normal recurring adjustments (unless otherwise indicated), necessary for a fair statement of our financial results for the periods presented in these financial statements. The results for interim periods are not necessarily indicative of future or annual results.

We suggest that you read these condensed financial statements together with the financial statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2025 (2025 Form 10-K). We prepared the accompanying financial statements on a basis that is substantially consistent with the accounting principles applied in our 2025 Form 10-K.

Accounting standards not yet adopted. In December 2023, the Financial Accounting Standards Board (FASB) issued an updated accounting standard requiring additional annual disclosures about income taxes, primarily related to the rate reconciliation and information about income taxes paid. We are required to adopt the new guidance for the annual period ending April 30, 2026. The update can be applied either prospectively or retrospectively.

In November 2024, the FASB issued an updated accounting standard requiring disaggregation, in the notes to the financial statements, of expense line items in the income statement that include certain categories of expenses. We are required to adopt the updated standard for annual disclosures for the period ending April 30, 2028, and for interim disclosures within fiscal 2029, with earlier adoption permitted. The update can be applied either prospectively or retrospectively.

We are currently evaluating the impact that adopting these accounting standards updates will have on our disclosures.

2. Earnings Per Share

We calculate basic earnings per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share further includes the dilutive effect of stock-based compensation awards. We calculate that dilutive effect using the “treasury stock method” (as defined by GAAP).

The following table presents information concerning basic and diluted earnings per share:


	Three Months Ended
	July 31,
(Dollars in millions, except per share amounts)		2024		2025


Net income available to common stockholders		$	195	$	170

Share data (in thousands):
Basic average common shares outstanding		472,637		472,724
Dilutive effect of stock-based awards		304		239
Diluted average common shares outstanding		472,941		472,963

Basic earnings per share		$	0.41	$	0.36
Diluted earnings per share		$	0.41	$	0.36

We excluded common stock-based awards for approximately 2,582,000 shares and 4,108,000 shares from the calculation of diluted earnings per share for the three months ended July 31, 2024 and 2025, respectively. We excluded those awards because they were not dilutive for those periods under the treasury stock method.

3. Inventories

We value some of our consolidated inventories, including most of our U.S. inventories, at the lower of cost, using the last-in, first-out (LIFO) method, or market value. If the LIFO method had not been used, inventories at current cost would have been $600 million higher than reported as of April 30, 2025, and $628 million higher than reported as of July 31, 2025. Changes in the LIFO valuation reserve for interim periods are based on an allocation of the projected change for the entire fiscal year, recognized proportionately over the remainder of the fiscal year.

4. Goodwill and Other Intangible Assets

The following table shows the changes in goodwill (which includes no accumulated impairment losses) during the three months ended July 31, 2025:


(Dollars in millions)	Goodwill
Balance at April 30, 2025	$	1,505






Foreign currency translation adjustment	2

Balance at July 31, 2025	$	1,507

The following table presents details of our other intangible assets as of April 30, 2025 and July 31, 2025, respectively:


	April 30, 2025				July 31, 2025
(Dollars in millions)	Gross Carrying Amount		Net Carrying Amount		Gross Carrying Amount		Net Carrying Amount
Definite-lived intangible assets:
Supply contract	$	—	$	—	$	88	$	88
Indefinite-lived intangible assets:
Trademarks and brand names	981		981		983		983
Total other intangible assets	$	981	$	981	$	1,071	$	1,071

Net carrying amount represents the gross carrying amount net of accumulated amortization. During the first quarter of fiscal 2026, we recognized a definite-lived supply contract intangible asset of $88 million. This amount relates to a barrel supply agreement and was obtained as partial consideration for the sale of the Brown-Forman Cooperage facility and related assets on May 1, 2025 (refer to Note 6). We determined the estimated fair value of the supply contract using a discounted cash flow model. This method requires the use of assumptions, such as projected future market prices and discount rates (refer to Note 14). Amortization related to the supply contract used in the production of barrels will be capitalized into inventories. The supply contract will be amortized based on the actual realization of the benefit over the term of the contract. We expect to realize the benefit over six years. There were no amounts of amortization recorded for the three months ended July 31, 2025.

The increase in the indefinite-lived intangible assets from April 30, 2025 to July 31, 2025, was primarily driven by the impact of foreign exchange rates.

5. Equity Method Investments

On April 30, 2024, as partial consideration for the sale of the Sonoma-Cutrer wine business to The Duckhorn Portfolio, Inc. (Duckhorn), we obtained a 21.4% ownership interest in the common stock of Duckhorn. Also, effective April 30, 2024, we entered into a transition services agreement (TSA) with Duckhorn related to the sale of the Sonoma-Cutrer wine business. Our cost of sales for the three months ended July 31, 2024, included $22 million for Sonoma-Cuter products purchased from Duckhorn under the TSA. Fees earned for transition services provided to Duckhorn under the TSA were immaterial. Services related to the TSA ended on or about August 31, 2024.

On October 6, 2024, Duckhorn entered into a definitive agreement pursuant to which Duckhorn would be acquired by private equity funds managed by Butterfly Equity. The transaction was completed on December 24, 2024. Upon completion of the transaction, we received cash of $350 million in exchange for our 21.4% ownership interest in Duckhorn. As a result of the transaction, we recognized a $78 million gain on sale of our investment in Duckhorn during the three months ended January 31, 2025.

Our other equity method investments, which are included in other assets in the accompanying condensed consolidated balance sheets, are immaterial.

6. Restructuring and Other Charges

On January 13, 2025, our Board of Directors approved a plan to reduce our structural cost base and realign resources toward future sources of growth (Restructuring Initiative). This included reducing our worldwide headcount by approximately 12% and closing our Louisville-based Brown-Forman Cooperage. These actions were substantially implemented in fiscal 2025, with the remainder to be completed by the end of fiscal 2026.

We expect to incur aggregate charges of approximately $60 to $70 million in connection with these actions, consisting primarily of approximately $27 to $32 million in severance and other employee-related costs and approximately $33 to $38 million in other restructuring costs, including costs related to the Louisville-based Brown-Forman Cooperage facility closure and consulting services associated with the restructuring actions. Through July 31, 2025, we recognized $60 million of restructuring and other charges associated with these actions, comprising $58 million in restructuring charges and $2 million in other charges for asset impairments. We also recorded $3 million in charges in fiscal 2025 to adjust the carrying value of certain Brown-Forman Cooperage inventory to the amount we expected to realize upon disposal (included in cost of sales in our consolidated statement of operations). As of July 31, 2025, $42 million of the charges to be settled in cash have been paid.

The following table summarizes the restructuring and other charges recognized during the three months ended July 31, 2025, as well as the activity in our accrued restructuring costs:


(Dollars in millions)	Severance and Other Employee-Related Costs		Other Restructuring Charges1		Total
Balance at April 30, 2025	$	13	$	6	$	19






Costs incurred and charged to expense	1		11		12
Costs paid or otherwise settled	(9)		(6)		(15)

Balance at July 31, 2025	$	5	$	11	$	16

1Primarily represents one-time costs related to the cooperage facility closure, consulting services, and other miscellaneous exit costs.

Additionally, on May 1, 2025, we completed the sale of the Brown-Forman Cooperage facility and related assets for $33 million in cash and $88 million in non-cash consideration related to a supply contract with the sellers (refer to Note 4). The carrying amount of the assets included in the sale was $121 million, consisting of $33 million in property, plant, and equipment, net, and $88 million in inventories. As a result of the sale, we recognized an immaterial pre-tax gain during the first quarter of fiscal 2026.

The charges we currently expect to incur in connection with the Restructuring Initiative are subject to a number of assumptions and risks, and actual results may differ materially. We may also incur other material charges not currently contemplated due to events that may occur as a result of, or in connection with, the Restructuring Initiative.

7. Contingencies

We operate in a litigious environment, and we are sued in the normal course of business. Sometimes plaintiffs seek substantial damages. Significant judgment is required in predicting the outcome of these suits and claims, many of which take years to adjudicate. We accrue estimated costs for a contingency when we believe that a loss is probable and we can make a reasonable estimate of the loss, and then adjust the accrual as appropriate to reflect changes in facts and circumstances. We do not believe it is reasonably possible that these existing loss contingencies, individually or in the aggregate, would have a material adverse effect on our financial position, results of operations, or liquidity. No material accrued loss contingencies were recorded as of July 31, 2025.

8. Debt

Our long-term debt (net of unamortized discount and issuance costs) consisted of:


(Principal and carrying amounts in millions)	April 30, 2025		July 31, 2025



1.20% senior notes, €300 principal amount, due July 7, 2026	342		344
2.60% senior notes, £300 principal amount, due July 7, 2028	401		397
4.75% senior notes, $650 principal amount, due April 15, 2033	644		644
4.00% senior notes, $300 principal amount, due April 15, 2038	296		296
3.75% senior notes, $250 principal amount, due January 15, 2043	248		248
4.50% senior notes, $500 principal amount, due July 15, 2045	490		490

	2,421		2,419
Less current portion	—		344
	$	2,421	$	2,075

Our short-term borrowings consisted of borrowings under our commercial paper program, as follows:


(Dollars in millions)	April 30, 2025	July 31, 2025
Commercial paper (par amount)	$313	$283
Average interest rate	4.64%	4.58%
Average remaining days to maturity	12	11

9. Stockholders’ Equity

The following table shows the changes in stockholders’ equity during the three months ended July 31, 2024:


(Dollars in millions)	Class A Common Stock		Class B Common Stock		Additional Paid-in Capital		Retained Earnings		AOCI		Treasury Stock		Total
Balance at April 30, 2024	$	25	$	47	$	13	$	4,261	$	(221)	$	(608)	$	3,517


Net income							195						195
Net other comprehensive income (loss)									(43)				(43)
Declaration of cash dividends							(206)						(206)

Stock-based compensation expense					4								4
Stock issued under compensation plans											3		3
Loss on issuance of treasury stock issued under compensation plans					(5)								(5)
Balance at July 31, 2024	$	25	$	47	$	12	$	4,250	$	(264)	$	(605)	$	3,465

SEC Form 10-Q filed by Brown Forman Corporation