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 ~~January~~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: ~~February~~August 2822, 2025

Class A Common Stock (voting), $0.15 par value			169,~~129~~143,~~183~~808
Class B Common Stock (nonvoting), $0.15 par value			303,~~539~~608,~~962~~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	2118
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3733
Item 4.	Controls and Procedures	3733
PART II - OTHER INFORMATION		3834
Item 1.	Legal Proceedings	3834
Item 1A.	Risk Factors	3834
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3834
Item 3.	Defaults Upon Senior Securities	3834
Item 4.	Mine Safety Disclosures	3834
Item 5.	Other Information	3834
Item 6.	Exhibits	3934
SIGNATURES		4035

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~~		Three Months Ended		~~Nine Months Ended~~
	January 31,				January 31,
			July 31,
	~~2024~~		~~2025~~		2024		2025
Sales	$	~~1,406~~	$	~~1,348~~	$	41,~~137~~211	$	31,~~935~~191
Excise taxes	~~337~~		~~313~~		~~923~~260		~~854~~267
Net sales	~~1,069~~		~~1,035~~		~~3,214~~951		~~3,081~~924
Cost of sales	~~434~~		~~416~~		~~1,257~~386		~~1,251~~372
Gross profit	~~635~~		~~619~~		~~1,957~~565		~~1,830~~552
Advertising expenses	~~143~~		~~125~~		~~414~~126		~~377~~120
Selling, general, and administrative expenses	~~203~~		~~178~~		~~595~~188		~~551~~177
Restructuring and other charges	—		31		—		3312
Gain on sale of business	(90)		—		(90)		—
Other expense (income), net					(30)		(17)
Other expense (income), net	6		5		(1)		(33)
Operating income					281		260
Operating income	373		280		1,039		902
Non-operating postretirement expense					—		19
Non-operating postretirement expense	1		3		2		4
Interest income					(4)		(4)
Interest income	(3)		(5)		(7)		(12)
Interest expense					32		25
Interest expense	33		31		93		95
Income before income taxes					253		220
Equity method investment income and gain on sale	—		(81)		—		(83)
Income taxes					58		50
Income before income taxes	342		332		951		898
Net income					$	195	$	170
Income taxes	57		62		193		175
Net income	$	285	$	270	$	758	$	723
Earnings per share:
Basic	$	~~0.60~~	$	~~0.57~~	$	10.5941	$	10.5336
Diluted	$	~~0.60~~	$	~~0.57~~	$	10.5841	$	10.5336

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~~		Three Months Ended		~~Nine Months Ended~~
	January 31,				January 31,
			July 31,
	~~2024~~		~~2025~~		2024		2025
Net income	$	~~285~~	$	~~270~~	$	~~758~~195	$	~~723~~170
Other comprehensive income (loss), net of tax:
Currency translation adjustments	75		~~(60)~~		10(42)		~~(128)~~25
Cash flow hedge adjustments	~~(10)~~		6		(32)		32
Postretirement benefits adjustments	1		2		41		39
Net other comprehensive income (loss)	66		~~(52)~~		11(43)		~~(122)~~36
Comprehensive income	$	~~351~~	$	~~218~~	$	~~769~~152	$	~~601~~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, 2024		January 31,2025
	April 30, 2025		July 31,2025
Assets
Cash and cash equivalents	$	~~446~~444	$	~~599~~471
Accounts receivable, less allowance for doubtful accounts of $8 at April 30 and $7 at January 31	769		855
Accounts receivable, less allowance for doubtful accounts of $7 at April 30 and $8 at July 31	830		847
Inventories:
Barreled whiskey	1,~~490~~567		1,~~564~~584
Finished goods	~~452~~476		~~428~~515
Work in process	~~396~~378		~~360~~385
Raw materials and supplies	~~218~~90		99102
Total inventories	2,~~556~~511		2,~~451~~586
Assets held for sale	—121		~~120~~—
Other current assets	~~265~~289		~~254~~274
Total current assets	4,~~036~~195		4,~~279~~178
Property, plant and equipment, net	1,~~074~~095		1,~~041~~094
Goodwill	1,~~455~~505		1,~~435~~507
Other intangible assets	~~990~~981		~~973~~1,071
Equity method investments	270		3
Deferred tax assets	47		48
Deferred tax assets	69		63
Other assets	263		273
Other assets	272		277
Total assets	$	8,086	$	8,171
Total assets	$	8,166	$	8,071
Liabilities
Accounts payable and accrued expenses	$	~~793~~741	$	~~695~~687
Accrued income taxes	38		30
Dividends payable	—		107
Short-term borrowings	428		202
Accrued income taxes	27		77
Current portion of long-term debt	300		300
Short-term borrowings	312		282
Total current liabilities	1,559		1,227
Current portion of long-term debt	—		344
Long-term debt	2,372		2,361
Total current liabilities	1,080		1,497
Deferred tax liabilities	315		266
Long-term debt	2,421		2,075
Accrued pension and other postretirement benefits	160		161
Deferred tax liabilities	241		242
Other liabilities	243		233
Accrued pension and other postretirement benefits	164		173
Total liabilities	4,649		4,248
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	1336		2834
Retained earnings	4,~~261~~710		4,~~671~~666
Accumulated other comprehensive income (loss), net of tax	(~~221~~220)		(~~343~~184)
Treasury stock, at cost (11,932,000 and 11,871,000 shares at April 30 and January 31, respectively)	(608)		(605)
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,~~517~~993		3,~~823~~988
Total liabilities and stockholders’ equity	$	8,~~166~~086	$	8,~~071~~171

See notes to the condensed consolidated financial statements.

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in millions)

	Nine Months Ended
	Three Months Ended
	January 31,
	July 31,
	2024		2025
Cash flows from operating activities:
Net income	$	~~758~~195	$	~~723~~170
Adjustments to reconcile net income to net cash provided by operations:
Gain on sale of business	(90)		—
Depreciation and amortization	22		22
Equity method investment income and gain on sale	—		(83)
Stock-based compensation expense	4		4
Depreciation and amortization	66		66
Deferred income tax benefit	(5)		(8)
Stock-based compensation expense	18		20
Change in fair value of contingent consideration	4		—
Deferred income tax provision (benefit)	3		(43)
Other, net	(10)		3
Change in fair value of contingent consideration	1		5
Other, net	(2)		(3)
Changes in assets and liabilities:
Accounts receivable	(2142)		(~~106~~13)
Inventories	(~~320~~91)		(61)
Other current assets	28(2)		2115
Accounts payable and accrued expenses	(69104)		(6446)
Accrued income taxes	~~(2)~~54		~~(10)~~51
Other operating assets and liabilities	(8)		~~(19)~~23
Cash provided by operating activities	~~362~~17		~~446~~160
Cash flows from investing activities:
Proceeds from sale of business	194		—
Additions to property, plant, and equipment	(41)		(31)
Proceeds from sale of equity method investment	—		350
Proceeds from sale of cooperage assets	51		33
Proceeds from sale of property, plant, equipment, and other	13		51
Cash provided by investing activities	10		2
Additions to property, plant, and equipment	(148)		(117)
Other, net	4		—
Cash provided by investing activities	63		284
Cash flows from financing activities:
Net change in short-term borrowings	~~492~~54		(~~227~~30)
Payments of withholding taxes related to stock-based awards	(42)		(21)
Acquisition of treasury stock	(400)		—
Dividends paid	(103)		(107)
Dividends paid	(300)		(313)
Cash used for financing activities	(51)		(138)
Other, net	—		(4)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(6)		3
Cash used for financing activities	(212)		(546)
Net increase in cash, cash equivalents, and restricted cash	(30)		27
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	2		(20)
Cash, cash equivalents, and restricted cash at beginning of period	456		463
Net increase in cash, cash equivalents, and restricted cash	215		164
Cash, cash equivalents, and restricted cash at end of period	426		490
Cash, cash equivalents, and restricted cash at beginning of period	384		456
Less: Restricted cash (included in other current assets) at end of period	(10)		(19)
Cash, cash equivalents, and restricted cash at end of period	599		620
Cash and cash equivalents at end of period	$	416	$	471
Less: Restricted cash (included in other current assets) at end of period	(10)		(21)
Cash and cash equivalents at end of period	$	589	$	599
Supplemental information:
Non-cash additions to property, plant and equipment	$	146	$	72
Right-of-use assets obtained in exchange for new lease obligations	$	3115	$	3014

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, ~~2024~~2025 (~~2024~~2025 Form 10-K). We prepared the accompanying financial statements on a basis that is substantially consistent with the accounting principles applied in our ~~2024~~2025 Form 10-K.

Accounting standards not yet adopted. In ~~November~~December 2023, the Financial Accounting Standards Board (FASB) issued an updated accounting standard requiring additional annual disclosures about ~~significant~~income ~~segment~~taxes, ~~expenses~~primarily ~~and~~related ~~other~~to ~~segment~~the ~~items.~~rate ~~The~~reconciliation ~~update~~and ~~also requires interim disclosure of segment~~ information ~~that~~about isincome ~~currently~~taxes ~~required only on an annual basis~~paid. We are required to adopt the ~~updated~~new ~~standard~~guidance for the annual ~~disclosures~~period ~~beginning~~ending inApril ~~fiscal 2025~~30, ~~and for interim disclosures in fiscal~~ 2026~~, with earlier adoption permitted~~. The update iscan to be applied ~~retroactively~~either prospectively or retrospectively.

In ~~December~~November ~~2023~~2024, the FASB issued an updated accounting standard requiring ~~additional~~disaggregation, ~~annual~~in ~~disclosures~~the ~~about~~notes ~~income~~to ~~taxes~~the financial statements, ~~primarily~~of ~~related~~expense toline items in the ~~rate~~income ~~reconciliation~~statement ~~and~~that ~~information~~include ~~about~~certain ~~income~~categories ~~taxes~~of ~~paid~~expenses. We are required to adopt the ~~new~~updated ~~guidance~~standard ~~beginning~~for inannual disclosures for the period ending April 30, 2028, and for interim disclosures within fiscal ~~2026~~2029, with earlier adoption permitted. 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 beginning in fiscal 2028, and for interim disclosures in 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~~

Three Months Ended

~~Nine Months Ended~~

January 31,

July 31,

(Dollars in millions, except per share amounts)

~~2024~~

~~2025~~

2024

2025

Net income available to common stockholders

~~285~~

~~270~~

~~758~~195

~~723~~170

Share data (in thousands):

Basic average common shares outstanding

~~474,806~~

~~472,661~~

~~477~~472,~~542~~637

472,~~651~~724

Dilutive effect of stock-based awards

~~760~~

~~225~~

~~902~~304

~~309~~239

Diluted average common shares outstanding

~~475,566~~

~~472,886~~

~~478~~472,~~444~~941

472,~~960~~963

Basic earnings per share

~~0.60~~

~~0.57~~

10.5941

10.5336

Diluted earnings per share

~~0.60~~

~~0.57~~

10.5841

10.5336

We excluded common stock-based awards for approximately 12,~~658~~582,000 shares and 34,~~378~~108,000 shares from the calculation of diluted earnings per share for the three months ended ~~January~~July 31, 2024 and 2025, respectively. We excluded common stock-based awards for approximately 1,544,000 shares and 2,993,000 shares from the calculation of diluted earnings per share for the nine months ended January 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 $~~512~~600 million higher than reported as of April 30, ~~2024~~2025, and $~~554~~628 million higher than reported as of ~~January~~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) ~~and other intangible assets~~ during the ~~nine~~three months ended ~~January~~July 31, 2025:

(Dollars in millions)	Goodwill		~~Other Intangible Assets~~
Balance at April 30, 2024	$	1,455	$	990
Balance at April 30, 2025	$	1,505
Foreign currency translation adjustment	~~(20)~~2		~~(17)~~
Balance at January 31, 2025	$	1,435	$	973
Balance at July 31, 2025	$	1,507

~~Our~~The following table presents details of our other intangible assets ~~consist~~as of ~~trademarks~~April ~~and brand names~~30, ~~all~~2025 ~~with~~and ~~indefinite~~July 31, ~~useful~~2025, ~~lives.~~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

AsOn of April 30, 2024, ~~our~~as ~~equity~~partial ~~method~~consideration ~~investments~~for ~~included~~the asale ~~21.4% ownership~~ of the ~~common~~Sonoma-Cutrer ~~stock~~wine ofbusiness to The Duckhorn Portfolio, Inc. (“Duckhorn”), ~~which~~ we obtained asa ~~partial~~21.4% ~~consideration~~ownership ~~for~~interest ~~our~~in ~~sale of~~ the ~~Sonoma-Cutrer~~common ~~wine~~stock ~~business~~of to Duckhorn. onAlso, effective April 30, 2024., ~~The~~we ~~carrying~~entered ~~amount~~into ofa ~~our~~transition ~~investment~~services inagreement (TSA) with Duckhorn ~~was~~related ~~$267 million~~to asthe sale of ~~April~~the ~~30,~~Sonoma-Cutrer ~~2024,~~wine ~~reflecting~~business. ~~the~~Our ~~fair~~cost ~~value~~ of sales for the ~~common~~three ~~stock~~months ended July 31, ~~based~~2024, onincluded ~~its~~$22 million ~~quoted~~for ~~market~~Sonoma-Cuter ~~price~~products atpurchased from Duckhorn under the ~~April~~TSA. ~~30,~~Fees ~~2024~~earned ~~closing~~for ~~date~~transition ofservices provided to Duckhorn under the ~~transaction~~TSA were immaterial. ~~Our~~Services ~~other~~related ~~equity~~to ~~method~~the ~~investments~~TSA ~~are~~ended ~~immaterial~~on or about August 31, 2024.

~~Also,~~On ~~effective~~October ~~April 30~~6, 2024, weDuckhorn entered into a ~~transition~~definitive ~~services~~ agreement ~~(TSA)~~pursuant ~~with~~to which Duckhorn ~~related~~would tobe ~~the~~acquired ~~sale~~by ofprivate ~~the~~equity ~~Sonoma-Cutrer~~funds ~~wine~~managed ~~business.~~by ~~Our~~Butterfly ~~cost~~Equity. ofThe ~~sales~~transaction ~~for~~was ~~the~~completed ~~three~~on ~~months~~December ~~and~~24, ~~nine~~2024. ~~months~~Upon ~~ended~~completion ~~January~~of ~~31,~~the ~~2025~~transaction, ~~included~~we ~~$0 million~~received ~~and~~cash of $24350 million, ~~respectively,~~in exchange for ~~Sonoma-Cuter~~our ~~products~~21.4% ~~purchased~~ownership ~~from~~interest in Duckhorn. ~~under~~As ~~the~~a ~~TSA.~~result ~~Fees~~of ~~earned~~the ~~for~~transaction, ~~transition~~we ~~services~~recognized ~~provided~~a to$78 million ~~Duckhorn~~gain ~~under~~on ~~the~~sale ~~TSA~~of ~~were~~our ~~immaterial.~~investment ~~Services~~in ~~related~~Duckhorn toduring the ~~TSA~~three months ended onJanuary ~~or about August~~ 31, ~~2024~~2025.

OnOur ~~October~~other ~~6, 2024, Duckhorn entered into a definitive agreement pursuant to which Duckhorn would be acquired by private~~ equity ~~funds.~~method ~~The transaction was completed on December 24~~investments, ~~2024.~~which ~~Upon~~are ~~completion~~included ~~of the transaction, we received cash of $350 million~~ in ~~exchange~~other ~~for~~assets ~~our 21.4% ownership interest~~ in ~~Duckhorn. As a result of~~ the ~~transaction,~~accompanying wecondensed ~~recognized~~consolidated abalance ~~$78 million gain on sale of our investment in Duckhorn during the three months ended January 31~~sheets, ~~2025~~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 (~~the~~Restructuring ~~Plan~~Initiative). InThis ~~connection~~included ~~with~~reducing ~~the Plan, we expect to reduce~~ our worldwide headcount by approximately 12% and toclosing ~~close~~ our Louisville-based Brown-Forman Cooperage. WeThese ~~expect~~actions ~~the~~were ~~Plan to be~~ substantially implemented in fiscal 2025, with the remainder to be completed by the end of fiscal 2026.

InWe ~~connection with the Plan, 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 ~~cooperage~~Brown-Forman Cooperage facility closure and consulting services associated with the restructuring actions. Through ~~January~~July 31, 2025, we ~~have~~recognized ~~incurred~~ $2760 million of restructuring and other charges associated with these actions, comprising $58 million in restructuring charges and $2 million in other charges ~~associated~~for ~~with~~asset ~~the Plan~~impairments. We also ~~incurred~~recorded $43 million in ~~other~~ charges ~~associated~~in ~~with~~fiscal a2025 ~~special,~~to ~~one~~adjust the carrying value of certain Brown-~~time~~Forman ~~early~~Cooperage ~~retirement~~inventory ~~benefit~~to the amount we expected to realize upon disposal (included in cost of sales in our consolidated statement of operations). As of ~~January~~ July 31, 2025, $8 42 million of the charges to be settled in cash have been paid.

~~Detail~~The onfollowing ~~the~~table ~~total~~summarizes the restructuring and other charges isrecognized ~~provided~~during ~~below~~the three months ended July 31, 2025, as well as the activity in our accrued restructuring costs:

	Three Months Ended				Nine Months Ended
(Dollars in millions)	Severance and Other Employee-Related Costs		Other Restructuring Charges1		Total
	January 31,				January 31,
Balance at April 30, 2025	$	13	$	6	$	19
(Dollars in millions)	2024		2025		2024		2025
Costs incurred and charged to expense	1		11		12
Restructuring charges:
Costs paid or otherwise settled	(9)		(6)		(15)
Severance and other employee-related costs	$	—	$	19	$	—	$	19
Balance at July 31, 2025	$	5	$	11	$	16
Other restructuring charges1	—		6		—		8
Restructuring charges	—		25		—		27
Other charges2	—		6		—		6
Total restructuring and other charges	$	—	$	31	$	—	$	33

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

~~2Represents~~Additionally, on May 1, 2025, we completed the sale of the Brown-Forman Cooperage facility and related assets for $433 million in cash and $88 million in ~~costs~~non-cash ~~associated~~consideration ~~with~~related to a ~~special,~~supply ~~one-time~~contract ~~early~~with ~~retirement~~the ~~benefit~~sellers (refer to ~~qualifying~~Note U4).S. ~~employees~~The ~~and~~carrying amount of the assets included in the sale was $2121 million, consisting of $33 million in ~~impairment~~property, ~~charges~~plant, onand ~~certain~~equipment, ~~cooperage~~net, ~~facility~~and ~~assets~~$88 million ~~held~~in ~~for~~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 ~~Plan~~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 ~~Plan~~Restructuring Initiative.

The following table summarizes the activity in our accrued restructuring costs:

(Dollars in millions)	Severance and Other Employee-Related Costs		Other Restructuring Charges		Total
Balance at April 30, 2024	$	—	$	—	$	—
Costs incurred and charged to expense	19		8		27
Costs paid or otherwise settled	(2)		(6)		(8)
Balance at January 31, 2025	$	17	$	2	$	19

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 ~~January~~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, ~~2024~~2025		~~January~~July 31,2025
3.50% senior notes, $300 principal amount, due April 15, 2025	$	300	$	300
1.20% senior notes, €300 principal amount, due July 7, 2026	342		344
1.20% senior notes, €300 principal amount, due July 7, 2026	321		312
2.60% senior notes, £300 principal amount, due July 7, 2028	401		397
2.60% senior notes, £300 principal amount, due July 7, 2028	375		372
4.75% senior notes, $650 principal amount, due April 15, 2033	644		644
4.75% senior notes, $650 principal amount, due April 15, 2033	643		644
4.00% senior notes, $300 principal amount, due April 15, 2038	296		296
4.00% senior notes, $300 principal amount, due April 15, 2038	295		295
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
	2,672		2,661
	2,421		2,419
Less current portion	~~300~~—		~~300~~344
	$	2,~~372~~421	$	2,~~361~~075

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

(Dollars in millions)	April 30, ~~2024~~2025	~~January~~July 31,2025
Commercial paper (par amount)	$~~429~~313	$~~203~~283
Average interest rate	54.4964%	4.6558%
Average remaining days to maturity	12	1611

9. Stockholders’ Equity

The following table shows the changes in stockholders’ equity ~~by quarter~~ during the ~~nine~~three months ended ~~January~~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, 2023	$	25	$	47	$	1	$	3,643	$	(235)	$	(213)	$	3,268
Balance at April 30, 2024	$	25	$	47	$	13	$	4,261	$	(221)	$	(608)	$	3,517
Net income							~~231~~195						~~231~~195
Net other comprehensive income (loss)									36(43)				36(43)
Declaration of cash dividends							(~~197~~206)						(~~197~~206)
Stock-based compensation expense					4								4
Stock issued under compensation plans											3		3
Loss on issuance of treasury stock issued under compensation plans					(45)		~~(3)~~						(75)
Balance at July 31, 2023	25		47		1		3,674		(199)		(210)		3,338
Balance at July 31, 2024	$	25	$	47	$	12	$	4,250	$	(264)	$	(605)	$	3,465
Net income							242						242
Net other comprehensive income (loss)									(91)				(91)
Acquisition of treasury stock											(42)		(42)
Stock-based compensation expense					7								7
Balance at October 31, 2023	25		47		8		3,916		(290)		(252)		3,454
Net income							285						285
Net other comprehensive income (loss)									66				66
Declaration of cash dividends							(206)						(206)
Acquisition of treasury stock											(361)		(361)
Stock-based compensation expense					7								7
Balance at January 31, 2024	$	25	$	47	$	15	$	3,995	$	(224)	$	(613)	$	3,245

1110

The following table shows the changes in stockholders’ equity ~~by quarter~~ during the ~~nine~~three months ended ~~January~~July 31, 2025:

(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
Balance at April 30, 2025	$	25	$	47	$	36	$	4,710	$	(220)	$	(605)	$	3,993
Net income							~~195~~170						~~195~~170
Net other comprehensive income (loss)									~~(43)~~36				~~(43)~~36
Declaration of cash dividends							(~~206~~214)						(~~206~~214)
Stock-based compensation expense					4								4
Stock issued under compensation plans											35		35
Loss on issuance of treasury stock issued under compensation plans					(56)								(56)
Balance at July 31, 2024	25		47		12		4,250		(264)		(605)		3,465
Balance at July 31, 2025	$	25	$	47	$	34	$	4,666	$	(184)	$	(600)	$	3,988
Net income							258						258
Net other comprehensive income (loss)									(27)				(27)
Stock-based compensation expense					9								9
Balance at October 31, 2024	25		47		21		4,508		(291)		(605)		3,705
Net income							270						270
Net other comprehensive income (loss)									(52)				(52)
Declaration of cash dividends							(107)						(107)
Stock-based compensation expense					7								7
Balance at January 31, 2025	$	25	$	47	$	28	$	4,671	$	(343)	$	(605)	$	3,823

The following table shows the change in each component of accumulated other comprehensive income (AOCI), net of tax, during the ~~nine~~three months ended ~~January~~July 31, 2025:

(Dollars in millions)	Currency Translation Adjustments		Cash Flow Hedge Adjustments		Postretirement Benefits Adjustments		Total AOCI
Balance at April 30, 2024	$	(111)	$	10	$	(120)	$	(221)
Balance at April 30, 2025	$	(92)	$	(5)	$	(123)	$	(220)
Net other comprehensive income (loss)	~~(128)~~25		32		39		~~(122)~~36
Balance at January 31, 2025	$	(239)	$	13	$	(117)	$	(343)
Balance at July 31, 2025	$	(67)	$	(3)	$	(114)	$	(184)

The following table shows the cash dividends declared per share on our Class A and Class B common stock during the ~~nine~~three months ended ~~January~~July 31, 2025:

Declaration Date

Record Date

Payable Date

Amount per Share

May 23, 2024

June 7, 2024

July 1, 2024

$0.2178

May 22, 2025

June 9, 2025

July 1, 2025

$0.2265

July 25, 2024

September 3, 2024

October 1, 2024

$0.2178

July 24, 2025

September 3, 2025

October 1, 2025

$0.2265

November 21, 2024

December 6, 2024

January 2, 2025

$0.2265

On February 20, 2025, our Board of Directors declared a regular quarterly cash dividend on our Class A and Class B common stock of $0.2265 per share. The dividend is payable on April 1, 2025, to stockholders of record on March 7, 2025.

10. Net Sales

The following table shows our net sales by geography:

~~Three Months Ended~~

Three Months Ended

~~Nine Months Ended~~

January 31,

July 31,

(Dollars in millions)

~~2024~~

~~2025~~

2024

2025

United States

~~469~~

~~459~~

~~1,442~~419

~~1,367~~385

Developed International1

~~310~~

~~298~~

~~910~~280

~~867~~257

Emerging2

~~235~~

~~220~~

~~677~~185

~~647~~224

Travel Retail3

~~127~~41

~~121~~44

Non-branded and bulk4

5826

7914

Total

~~1,069~~

~~1,035~~

~~3,214~~951

~~3,081~~924

1Represents net sales of branded products to “advanced economies” as defined by the International Monetary Fund (IMF), excluding the United States. Our top developed international markets are Germany, Australia, the United Kingdom, France, ~~Canada,~~ and ~~Spain~~Canada.

2Represents net sales of branded products to “emerging and developing economies” as defined by the IMF. Our top emerging markets are Mexico, Poland, Brazil, and ~~Brazil~~Türkiye.

3Represents net sales of branded products to global duty-free customers, other travel retail customers, and the U.S. military, regardless of customer location.

4Includes net sales of used barrels, contract bottling services, and non-branded bulk whiskey, regardless of customer location.

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2024		2025		2024		2025
Whiskey1	$	731	$	749	$	2,167	$	2,177
Ready-to-Drink2	127		126		397		380
Tequila3	76		68		238		202
Non-branded and bulk4	18		23		58		79
Rest of portfolio5	117		69		354		243
Total	$	1,069	$	1,035	$	3,214	$	3,081

The following table shows our net sales by product category:

1Includes all whiskey spirits and whiskey-based flavored liqueurs. The brands included in this category are the Jack Daniel's family of brands (excluding the “ready-to-drink” products outlined below), the Woodford Reserve family of brands, the Old Forester family of brands, The GlenDronach, Benriach, Glenglassaugh, Slane Irish Whiskey, and Coopers’ Craft.


	Three Months Ended
	July 31,
(Dollars in millions)		2024		2025
Whiskey1		$	659	$	659
Ready-to-Drink2		121		128
Tequila3		62		62


Non-branded and bulk4		26		14
Rest of portfolio5		83		61
Total		$	951	$	924

1Includes all whiskey spirits and whiskey-based flavored liqueurs. The brands included in this category are the Jack Daniel’s family of brands (excluding the “ready-to-drink” products outlined below), the Woodford Reserve family of brands, the Old Forester family of brands, The GlenDronach, Benriach, Glenglassaugh, and Slane Irish Whiskey.

2Includes the Jack Daniel’s ready-to-drink (RTD) and ready-to-pour (RTP) products, New Mix, and other RTD/RTP products.

3Includes el Jimador, the Herradura family of brands, and other tequilas.

4Includes net sales of used barrels, contract bottling services, and non-branded bulk whiskey.

5Includes ~~Sonoma-Cutrer~~Korbel California Champagnes and Korbel Brandy (~~which~~the ~~was~~sales, ~~divested~~marketing, and distribution relationship ended on ~~April~~June 30, ~~2024~~2025), ~~Korbel California Champagnes~~Diplomático, ~~Diplomático~~Chambord, Gin Mare, ~~Chambord~~Sonoma-Cutrer (which was divested on April 30, 2024), Finlandia Vodka (which was divested on November 1, 2023), Fords Gin, and ~~Korbel~~other ~~Brandy~~agency brands (brands we do not own, but sell in certain markets).

11. Pension and Other Postretirement Benefits

The following table shows the components of the net cost recognized for our U.S. pension ~~and other postretirement benefit~~ plans. ~~Information~~Similar ~~about~~information ~~similar~~for ~~international~~other defined benefit plans is not presented due to immateriality.

	~~Three Months Ended~~		Three Months Ended		~~Nine Months Ended~~
	January 31,				January 31,
			July 31,
(Dollars in millions)	~~2024~~		~~2025~~		2024		2025
Pension Benefits:
Service cost					$	4	$	3
Service cost	$	5	$	4	$	14	$	13
Interest cost					9		8
Interest cost	8		9		25		27
Expected return on plan assets					(10)		(9)
Expected return on plan assets	(10)		(10)		(30)		(29)
Amortization of net actuarial loss					1		1
Amortization of:
Settlement charge					—		19
Prior service cost	—		—		—		1
Net cost					$	4	$	22
Net actuarial loss	2		1		5		1
Curtailment loss	—		1		—		1
Net cost	$	5	$	5	$	14	$	14
Other Postretirement Benefits:
Interest cost	$	—	$	—	$	1	$	1
Special termination benefits	—		1		—		1
Curtailment loss	—		1		—		1
Net cost	$	—	$	2	$	1	$	3

During the three months ended July 31, 2025, we recognized a pension settlement charge of $19 million, triggered by fiscal year-to-date lump-sum payments under certain pension plans surpassing total annual service and interest cost for those plans.

12. Income Taxes

Our consolidated interim effective tax rate is based on our expected annual operating income, statutory tax rates, and income tax laws in the various jurisdictions where we operate. Significant or unusual items, including adjustments to accruals for tax uncertainties, are recognized in the fiscal quarter in which the related event or a change in judgment occurs. The effective tax rate on ordinary income for the full fiscal year is expected to be 2221.50%, which is ~~higher~~the ~~than~~same as the U.S. federal statutory rate of 21.0%, due to the impact of state taxes and the tax effects of foreign operations, partially offset by the beneficial impact of the foreign-derived intangible income deduction.

The effective tax rate of 1922.5% for the ~~nine~~three months ended ~~January~~July 31, 2025, was ~~lower~~higher than the expected tax rate of 2221.50% on ordinary income for the full fiscal year ending April 30, ~~2025~~2026, primarily due to the ~~beneficial~~unfavorable impact of prior fiscal year true-ups. The effective tax rate of 1922.5% for the ~~nine~~three months ended ~~January~~July 31, 2025, was lower than the effective tax rate of 2023.31% for the same period last year,. ~~primarily~~The ~~due~~decrease toin ~~the~~our ~~beneficial~~effective ~~impact~~tax ofrate ~~prior~~was ~~fiscal~~driven ~~year~~by ~~true-ups in~~ the ~~current~~lower ~~year,~~impact ~~partially~~of ~~offset by higher~~ state taxes, ~~the increased unfavorable tax effects of foreign earnings,~~ and the absence of the ~~beneficial~~ impact of ~~tax~~increased ~~rate~~valuation ~~differences~~allowances onin the ~~sale~~prior ofperiod, ~~the~~which ~~Finlandia~~was ~~vodka~~partially ~~business~~offset inby the unfavorable year-over-year impact of prior fiscal year true-ups.

The OECD (Organization for Economic Co-operation and Development) 15% global minimum tax under the Pillar Two Model Rules, which is now effective in countries with enacted legislation, did not materially impact our financial results in the ~~nine~~three months ended ~~January~~July 31, 2025. We will continue to evaluate the impact in future periods as previously-enacting countries issue related guidance and additional countries consider adoption of the global minimum tax rules.

InOn ~~December~~July ~~2024~~4, 2025, the ~~U.S.~~One ~~Treasury~~Big ~~Department~~Beautiful ~~and~~Bill ~~IRS~~Act ~~released~~was ~~final~~signed ~~and~~into ~~proposed~~law ~~regulations~~in ~~related to~~ the ~~determination~~United ~~under~~States, ~~section~~which ~~987~~encompasses ofa ~~taxable~~broad ~~income~~range orof ~~loss~~tax ~~and~~reform ~~foreign~~provisions. ~~currency~~We ~~gain~~do ornot ~~loss~~expect ~~with~~this ~~respect~~ to have a ~~qualified~~material ~~business unit (QBU). We are currently evaluating the~~ impact ~~of adopting the final regulations~~ on our ~~current~~estimated ~~year~~annual ~~provision,~~effective ~~but~~tax dorate ~~not~~for ~~anticipate~~the ~~them~~fiscal toyear ~~have~~ending aApril ~~material~~30, ~~impact~~2026.

13. Derivative Financial Instruments and Hedging Activities

We are subject to market risks, including the effect of fluctuations in foreign currency exchange rates, commodity prices, and interest rates. We use derivatives to help manage financial exposures that occur in the normal course of business. We formally document the purpose of each derivative contract, which includes linking the contract to the financial exposure it is designed to mitigate. We do not hold or issue derivatives for trading or speculative purposes.

We use currency derivative contracts to limit our exposure to the foreign currency exchange rate risk that we cannot mitigate internally by using netting strategies. We designate most of these contracts as cash flow hedges of forecasted transactions (expected to occur within two years). We record all changes in the fair value of cash flow hedges in AOCI until the underlying hedged transaction occurs, at which time we reclassify that amount to earnings.

Some of our currency derivatives are not designated as hedges because we use them to partially offset the immediate earnings impact of changes in foreign currency exchange rates on existing assets or liabilities. We immediately recognize the change in fair value of these contracts in earnings.

We had outstanding currency derivatives, related primarily to our euro, British pound, and Australian dollar exposures, with notional amounts for all hedged currencies totaling $~~566~~463 million at April 30, ~~2024~~2025, and $~~461~~546 million at ~~January~~July 31, 2025. The maximum term of outstanding derivative contracts was 24 months at both April 30, ~~2024~~2025 and ~~January~~July 31, 2025.

We also use foreign currency-denominated debt instruments to help manage our foreign currency exchange rate risk. We designate a portion of those debt instruments as net investment hedges, which are intended to mitigate foreign currency exposure related to non-U.S. dollar net investments in certain foreign subsidiaries. Any change in value of the designated portion of the hedging instruments is recorded in AOCI, offsetting the foreign currency translation adjustment of the related net investments that is also recorded in AOCI. The amount of foreign currency-denominated debt instruments designated as net investment hedges was $~~497~~531 million at April 30, ~~2024~~2025, and $~~491~~528 million at ~~January~~July 31, 2025.

At inception, we expect each financial instrument designated as a hedge to be highly effective in offsetting the financial exposure it is designed to mitigate. We assess the effectiveness of our hedges continually. If we determine that any financial instruments designated as hedges are no longer highly effective, we discontinue hedge accounting for those instruments.

We use forward purchase contracts with suppliers to protect against corn price volatility. We expect to take physical delivery of the corn underlying each contract and use it for production over a reasonable period of time. Accordingly, we account for these contracts as normal purchases rather than as derivative instruments.

The following table presents the pre-tax impact that changes in the fair value of our derivative instruments and non-derivative hedging instruments had on AOCI and earnings:

		Three Months Ended
		January 31,
		July 31,
(Dollars in millions)	Classification	2024		2025
Derivative Instruments
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	~~(11)~~1	$	12—
Net gain (loss) reclassified from AOCI into earnings	Sales	34		4(3)
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	~~Sales~~Other income (expense), net	$	(3)	$	62
Net gain (loss) recognized in earnings	Other income (expense), net	2		(1)
Non-Derivative Hedging Instruments
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(199)	$	225
Net gain (loss) reclassified from AOCI into earnings	Other income (expense), net	26		—
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	1,~~406~~211	$	1,~~348~~191
Other income (expense), net		~~(6)~~30		~~(5)~~17

15We expect to reclassify $6 million of deferred net losses on cash flow hedges recorded in AOCI as of July 31, 2025 to earnings during the next 12 months. This reclassification would offset the anticipated earnings impact of the underlying hedged exposures. The actual amounts that we ultimately reclassify to earnings will depend on the exchange rates in effect when the underlying hedged transactions occur.

The following table presents the fair values of our derivative instruments:

		Nine Months Ended
				April 30, 2025						July 31, 2025
		January 31,
(Dollars in millions)	Classification			Derivative Assets				Derivative Liabilities		Derivative Assets		Derivative Liabilities
(Dollars in millions)	Classification	2024				2025
Designated as cash flow hedges:
Derivative Instruments
Currency derivatives	Accrued expenses			$	2			$	(11)	$	3	$	(10)
Currency derivatives designated as cash flow hedges:
Currency derivatives	Other liabilities			—				(3)		—		(2)
Net gain (loss) recognized in AOCI	n/a	$	6			$	11
Not designated as hedges:
Net gain (loss) reclassified from AOCI into earnings	Sales	11				7
Currency derivatives	Other current assets			2				—		1		—
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	(1)			$	6
Net gain (loss) recognized in earnings	Other income (expense), net	8				(6)
Non-Derivative Hedging Instruments
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(2)			$	7
Net gain (loss) reclassified from AOCI into earnings	Other income (expense), net	26				—
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	4,137			$	3,935
Other income (expense), net		1				33

We expect to reclassify $12 million of deferred net gains on cash flow hedges recorded in AOCI as of January 31, 2025 to earnings during the next 12 months. This reclassification would offset the anticipated earnings impact of the underlying hedged exposures. The actual amounts that we ultimately reclassify to earnings will depend on the exchange rates in effect when the underlying hedged transactions occur.

		April 30, 2024				January 31, 2025
(Dollars in millions)	Classification	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Designated as cash flow hedges:
Currency derivatives	Other current assets	$	11	$	(2)	$	15	$	(1)
Currency derivatives	Other assets	1		(1)		3		—
Not designated as hedges:
Currency derivatives	Accrued expenses	—		(1)		—		—

The fair values reflected in the above table are presented on a gross basis. However, as discussed further below, the fair values of those instruments subject to net settlement agreements are presented on a net basis in our balance sheets.

In our statements of cash flows, we classify cash flows related to cash flow hedges in the same category as the cash flows from the hedged items.

Credit risk. We are exposed to credit-related losses if the counterparties to our derivative contracts default. This credit risk is limited to the fair value of the contracts. To manage this risk, we contract only with major financial institutions that have investment-grade credit ratings and with whom we have standard International Swaps and Derivatives Association (ISDA) agreements that allow for net settlement of the derivative contracts. Also, we have established counterparty credit guidelines that we monitor regularly, and we monetize contracts when we believe it is warranted. Because of these safeguards, we believe we have no derivative positions that warrant credit valuation adjustments.

Our derivative instruments require us to maintain a specific level of creditworthiness, which we have maintained. If our creditworthiness were to fall below that level, then the counterparties to our derivative instruments could request immediate payment or collateralization for derivative instruments in net liability positions. The aggregate fair value of our derivatives with

1614

~~payment or collateralization for derivative instruments in net liability positions. The aggregate fair value of our derivatives with~~ creditworthiness requirements that were in a net liability position was $112 million at April 30, ~~2024~~2025, and $09 million at ~~January~~July 31, 2025.

Offsetting. As noted above, our derivative contracts are governed by ISDA agreements that allow for net settlement of derivative contracts with the same counterparty. It is our policy to present the fair values of current derivatives (that is, those with a remaining term of 12 months or less) with the same counterparty on a net basis in our balance sheets. Similarly, we present the fair values of noncurrent derivatives with the same counterparty on a net basis. We do not net current derivatives with noncurrent derivatives in our balance sheets.

The following table summarizes the gross and net amounts of our derivative contracts:

(Dollars in millions)	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Gross Amounts Not Offset in Balance Sheet		Net Amounts
April 30, 2024
April 30, 2025
Derivative assets	$	124	$	(32)	$	92	$	—	$	92
Derivative liabilities	(414)		32		(112)		—		(112)
January 31, 2025
July 31, 2025
Derivative assets	184		(13)		171		—		171
Derivative liabilities	(112)		13		—(9)		—		—(9)

No cash collateral was received or pledged related to our derivative contracts as of April 30, ~~2024~~2025, or ~~January~~July 31, 2025.

14. Fair Value Measurements

The following table summarizes the assets and liabilities measured or disclosed at fair value on a recurring basis:

April 30, 2024

January 31, 2025

April 30, 2025

July 31, 2025

Carrying

Fair

Carrying

Fair

(Dollars in millions)

Amount

Value

Amount

Value

Assets

Cash and cash equivalents

~~446~~444

~~599~~471

Currency derivatives, net

171

Liabilities

Currency derivatives, net

112

—9

Contingent consideration

6931

7231

Short-term borrowings

~~428~~312

~~202~~282

Long-term debt (including current portion)

2,~~672~~421

2,~~468~~255

2,~~661~~419

2,~~487~~265

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. We categorize the fair values of assets and liabilities into three levels based on the assumptions (inputs) used to determine those values. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. The three levels are:

•Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 2 – Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in inactive markets; or other inputs that are observable or can be derived from or corroborated by observable market data.

•Level 3 – Unobservable inputs supported by little or no market activity.

We determine the fair values of our currency derivatives (forward contracts) using standard valuation models. The significant inputs used in these models, which are readily available in public markets or can be derived from observable market transactions, include the applicable spot exchange rates, forward exchange rates, and interest rates. These fair value measurements are categorized as Level 2 within the valuation hierarchy.

1715

transactions, include the applicable spot exchange rates, forward exchange rates, and interest rates. These fair value measurements are categorized as Level 2 within the valuation hierarchy.

We determine the fair value of long-term debt primarily based on the prices at which identical or similar debt has recently traded in the market and also considering the overall market conditions on the date of valuation. These fair value measurements are categorized as Level 2 within the valuation hierarchy.

The fair values of cash, cash equivalents, and short-term borrowings approximate the carrying amounts due to the short maturities of these instruments.

The contingent consideration liability reflects the estimated fair value of the contingent future cash payments of up to €90 million to the sellers of the Gin Mare brand under an “earn-out” provision of the acquisition agreement (Gin Mare was acquired on November 3, 2022). Any contingent consideration earned by the sellers will become payable in cash upon exercise by the sellers of the right to receive the payment, which can occur no later than July 2027. The amount payable will depend on the achievement of net sales targets for Gin Mare for the latest fiscal year completed prior to the date of exercise by the sellers. The possible payments range from zero to €90 million.

We determine the fair value of our contingent consideration liability using a Monte Carlo simulation model, which requires the use of Level 3 inputs, such as projected future net sales, discount rates, and volatility rates. Changes in any of these Level 3 inputs could result in material changes to the fair value of the contingent consideration and could materially impact the amount of noncash expense (or income) recorded each reporting period.

~~The~~There ~~following~~was ~~table~~no ~~shows~~change ~~the changes~~ in our contingent consideration liability during the ~~nine~~three months ended ~~January~~July 31, 2025:.

(Dollars in millions)
Balance at April 30, 2024	$	69
Change in fair value1	5
Foreign currency translation adjustment	(2)
Balance at January 31, 2025	$	72

We measure some assets and liabilities at fair value on a nonrecurring basis. That is, we do not measure them at fair value on an ongoing basis, but we do adjust them to fair value in some circumstances (for example, when we determine that an asset is impaired). During the first quarter of fiscal 2026, we recognized a supply contract intangible asset of $88 million, 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 used the discounted cash flow model to determine the fair value of the supply contract as of the transaction date. The fair value measurement determined using this model is categorized as Level 3 within the valuation hierarchy. No other material nonrecurring fair value measurements were required during the periods presented in these financial statements.

1Classified as “other expense (income), net” in the accompanying condensed consolidated statement of operations.

We measure some assets and liabilities at fair value on a nonrecurring basis. That is, we do not measure them at fair value on an ongoing basis, but we do adjust them to fair value in some circumstances (for example, when we determine that an asset is impaired). As discussed in Notes 6 and 14, during the three months ended January 31, 2025, we recognized an impairment charge of $2 million related to certain cooperage facility assets held for sale as part of the restructuring plan approved in January 2025. The impairment charge was based on our measurements of the fair values of those assets, which are classified as Level 2 within the fair value hierarchy. No other material nonrecurring fair value measurements were required during the periods presented in these financial statements.

15. Other Comprehensive Income

The following table shows the components of net other comprehensive income (loss):

	Three Months Ended						Three Months Ended
	January 31, 2024						January 31, 2025
	July 31, 2024						July 31, 2025
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	61(44)	$	42	$	65(42)	$	~~(55)~~28	$	(53)	$	~~(60)~~25
Reclassification to earnings	4—		6—		10—		—		—		—
Other comprehensive income (loss), net	65(44)		102		75(42)		~~(55)~~28		(53)		~~(60)~~25
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	~~(11)~~1		3—		~~(8)~~1		12—		~~(3)~~—		9—
Reclassification to earnings1	(34)		1		(23)		~~(4)~~3		(1)		~~(3)~~2
Other comprehensive income (loss), net	(143)		41		(102)		83		(21)		62
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		1(8)		—2		1(6)
Reclassification to earnings2	1		—		1		120		—(5)		115
Other comprehensive income (loss), net	1		—		1		212		—(3)		29
Total other comprehensive income (loss), net	$	52(46)	$	143	$	66(43)	$	~~(45)~~43	$	(7)	$	~~(52)~~36
	Nine Months Ended						Nine Months Ended
	January 31, 2024						January 31, 2025
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	—	$	—	$	—	$	(126)	$	(2)	$	(128)
Reclassification to earnings	4		6		10		—		—		—
Other comprehensive income (loss), net	4		6		10		(126)		(2)		(128)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	6		(1)		5		11		(3)		8
Reclassification to earnings1	(11)		3		(8)		(7)		2		(5)
Other comprehensive income (loss), net	(5)		2		(3)		4		(1)		3
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		1		—		1
Reclassification to earnings2	5		(1)		4		2		—		2
Other comprehensive income (loss), net	5		(1)		4		3		—		3
Total other comprehensive income (loss), net	$	4	$	7	$	11	$	(119)	$	(3)	$	(122)

1Pre-tax amount for each period is classified as sales in the accompanying condensed consolidated statements of operations.

2Pre-tax amount for each period is classified as non-operating postretirement expense in the accompanying condensed consolidated statements of operations.

16~~. Gain on Sale of Business~~

~~On November 1, 2023, we sold the Finlandia vodka business to Coca-Cola HBC AG for $194 million in cash~~16. Segment ~~As a result of the sale, we recognized a pre-tax gain of $90 million during the third quarter of fiscal 2024.~~Information

19Our business constitutes a single operating segment, which derives its revenues predominantly from global sales of beverage alcohol consumer products.

17Our Chief Executive Officer is our chief operating decision maker, who manages business operations, evaluates performance, and allocates resources based on segment metrics such as net sales, gross profit, operating income, and net income. ~~Assets~~ ~~Held~~Significant ~~for~~segment ~~Sale~~expenses include cost of sales, advertising expenses, and selling, general, and administrative expenses. Other segment items include (when applicable): restructuring and other charges; other expense (income), net; non-operating postretirement expense; interest income; interest expense; and income taxes. The amount of each of these segment measures is the same as the consolidated amount presented in the accompanying condensed consolidated statements of operations.

AsThe ~~discussed~~segment’s ~~in Note 6~~assets, ~~our~~expenditures ~~Board~~for ofadditions ~~Directors~~to ~~approved a restructuring plan, which included the planned closure of our Louisville~~long-~~based~~lived ~~cooperage facility. In January 2025~~assets, weand ~~reached~~depreciation anand ~~agreement~~amortization toare ~~close~~the ~~that~~same ~~facility~~as ~~and sell~~ the ~~related~~consolidated ~~assets.~~amounts ~~This~~presented ~~transaction,~~in ~~which~~the isaccompanying ~~subject~~condensed toconsolidated ~~customary~~balance ~~closing~~sheets ~~adjustments~~ and ~~conditions,~~condensed isconsolidated ~~expected~~statements ~~to close in the first quarter~~ of ~~fiscal~~cash ~~2026~~flows.

In connection with this transaction, certain assets met the held for sale criteria as of January 31, 2025. As a result, during the third quarter of fiscal 2025, we recorded a $2 million impairment charge to write down the long-lived assets held for sale to their estimated fair value (net of selling costs). We estimated the fair value based on the expected proceeds from the transaction. The carrying amount of the assets held for sale as of January 31, 2025, was $120 million, consisting of $33 million in property, plant and equipment, net, and $87 million in inventories. The total carrying amount of the assets held for sale is presented as a separate line item in the condensed consolidated balance sheet as of January 31, 2025.17

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

You should read the following discussion and analysis in conjunction with both our unaudited Condensed Consolidated Financial Statements and related notes included in Part I, Item 1 of this Quarterly Report and our Annual Report on Form 10-K for the fiscal year ended April 30, ~~2024~~2025 (~~2024~~2025 Form 10-K). Note that the results of operations for the ~~nine~~three months ended ~~January~~July 31, 2025, are not necessarily indicative of future or annual results. In this Item, “we,” “us,” “our,” “Brown-Forman,” and the “Company” refer to Brown-Forman Corporation and its consolidated subsidiaries, collectively.

Presentation Basis

Non-GAAP Financial Measures

We report our financial results in accordance with U.S. generally accepted accounting principles (GAAP). Additionally, we use some financial measures in this report 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 expenses1; 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 quarter 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 ~~earn-out~~ contingent consideration liability that is payable in cash no ~~earlier than July 2024 and no~~ later than July 2027.

During fiscal 2024, we sold our Finlandia vodka ~~business,~~and ~~which resulted in a pre~~Sonoma-~~tax~~Cutrer ~~gain~~wine ofbusinesses ~~$92 million,~~ and entered into a related transition services ~~agreement~~agreements (~~TSA~~TSAs) for ~~this~~these ~~business~~businesses. This adjustment removes the ~~(a)~~net ~~transaction~~sales, ~~costs~~cost ~~related~~of ~~to the divestiture~~sales, ~~(b)~~and ~~the~~operating ~~gain~~expenses onrecognized ~~sale~~pursuant ofto the ~~Finlandia~~TSAs ~~vodka~~related ~~business,~~to ~~(c)~~distribution ~~operating~~services ~~activity~~in certain markets for the non-comparable period, which is activity infrom the first ~~and~~quarter ~~second quarters~~ of fiscal ~~2024, and (d) net sales, cost of sales, and operating expenses recognized pursuant to the TSA related to distribution services in certain markets~~2025.

During ~~fiscal 2024, we sold~~ the ~~Sonoma-Cutrer~~first ~~wine~~quarter ~~business~~of infiscal ~~exchange~~2025, ~~for~~we anrecognized ~~ownership~~a ~~percentage~~gain of ~~21.4% in The Duckhorn Portfolio Inc. (Duckhorn) along with~~ $5012 million ~~cash~~on ~~and~~the ~~entered~~sale ~~into~~of athe ~~related~~Alabama ~~TSA for this business~~cooperage. This ~~transaction resulted in a pre-tax gain of $175 million. This~~ adjustment removes the ~~(a)~~gain ~~transaction~~from ~~costs~~our ~~related~~other toexpense ~~the divestiture,~~ (bincome) ~~operating activity for the non-comparable period~~, ~~which is activity in the first, second, and third quarters of fiscal 2024, and (c)~~ net ~~sales, cost of sales,~~ and operating ~~expenses recognized pursuant to the TSA related to distribution services in certain markets~~income.

During the ~~second~~first quarter of fiscal ~~2024~~2026, we ~~recognized~~ended aour ~~gain~~sales, ofmarketing, $7and ~~million~~distribution onrelationship ~~the~~with ~~sale~~Korbel ofChampagne ~~certain~~Cellars ~~fixed~~(Korbel ~~assets.~~relationship), ~~During~~effective ~~the~~June ~~first~~30, ~~quarter~~2025. ofThis ~~fiscal~~adjustment ~~2025,~~removes wethe ~~recognized~~transaction acosts ~~gain~~related ofto ~~$12~~ending ~~million~~the onrelationship and the ~~sale~~operating ofactivity for the ~~Alabama~~non-comparable ~~cooperage.~~period, ~~This~~which ~~adjustment~~is ~~removes~~ the ~~gains~~month ~~from~~of ~~our~~July ~~other~~of ~~expense~~fiscal ~~(income),~~2025 ~~net~~ and ~~operating income~~2026.

We believe that these adjustments allow for us to better understand our organic results on a comparable basis.

•“Other items.” Other items include the additional items outlined below.

“Jack Daniel’s Country Cocktails business model change (JDCC).” In fiscal 2021, we entered into a partnership with the Pabst Brewing Company for the supply, sales, and distribution of Jack Daniel's Country Cocktails in the United States while Brown-Forman continued to produce certain products. During fiscal 2024, this production fully transitioned to Pabst Brewing Company for the Jack Daniel’s Country Cocktails products. This adjustment removes

1Operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.

the non-comparable operating activity related to the sales of Brown-Forman-produced Jack Daniel’s Country Cocktails products for the first, second, and third quarters of fiscal 2024 and fiscal 2025.

“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 ~~and other charges~~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. ~~Collectively,~~During ~~this~~the ~~adjustment~~first ~~removes~~quarter ~~the~~of fiscal 2026, we incurred $3312 million ~~impact~~in ~~from~~restructuring ~~our~~and ~~operating~~other ~~expenses~~charges associated with this initiative and ~~operating~~completed ~~income.~~the sale of the Brown-Forman

1Operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.

Cooperage facility and related assets. This adjustment removes the restructuring initiative impact from our operating expenses and operating income for the first quarter of fiscal 2026. See Note 6 to the Condensed Consolidated Financial Statements for more information.

“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.

•“Foreign exchange.” We calculate the percentage change in certain line items of the statements of operations in accordance with GAAP and adjust to exclude the cost or benefit of currency fluctuations. Adjusting for foreign exchange allows us to understand our business on a constant-dollar basis, as fluctuations in exchange rates can distort the organic trend both positively and negatively. (In this report, “dollar” means the U.S. dollar unless stated otherwise.) To eliminate the effect of foreign exchange fluctuations when comparing across periods, we translate current-year results at prior-year rates and remove transactional and hedging foreign exchange gains and losses from current- and prior-year periods.

We use the non-GAAP measure “organic change,” along with other metrics, to: (a) understand our performance from period to period on a consistent basis; (b) compare our performance to that of our competitors; (c) calculate components of management incentive compensation; (d) plan and forecast; and (e) communicate our financial performance to the Board of Directors, stockholders, and investment community. We provide reconciliations of the “organic change” in certain line items of the statements of operations to their nearest GAAP measures in the tables under “Results of Operations - Fiscal ~~2025~~2026 Year-to-Date Highlights” and “Results of Operations - Year-Over-Year Period Comparisons.” We have consistently applied the adjustments within our reconciliations in arriving at each non-GAAP measure. We believe these non-GAAP measures are useful to readers and investors because they enhance the understanding of our historical financial performance and comparability between periods. When we provide guidance for organic change in certain measures of the statements of operations we do not provide guidance for the corresponding GAAP change, as the GAAP measure will include items that are difficult to quantify or predict with reasonable certainty, such as foreign exchange, which could have a significant impact to our GAAP income statement measures.

Definitions

Aggregations.

From time to time, to explain our results of operations or to highlight trends and uncertainties affecting our business, we aggregate markets according to stage of economic development as defined by the International Monetary Fund (IMF), and we aggregate brands by beverage alcohol category. Below, we define the geographic and brand aggregations used in this report.

Geographic Aggregations.

In “Results of Operations - Fiscal ~~2025~~2026 Year-to-Date Highlights,” we provide supplemental information for our top markets ranked by percentage of net sales. In addition to markets listed by country name, we include the following aggregations:

•“Developed International” markets are “advanced economies” as defined by the IMF, excluding the United States. Our top developed international markets were Germany, Australia, the United Kingdom, France, ~~Canada,~~ and ~~Spain~~Canada. This aggregation represents our net sales of branded products to these markets.

•“~~Spain~~Emerging” ~~includes~~markets ~~Spain~~are “emerging and ~~certain~~developing ~~other~~economies” ~~surrounding~~as ~~territories~~defined by the IMF. Our top emerging markets were Mexico, Poland, Brazil, and Türkiye. This aggregation represents our net sales of branded products to these markets.

•“~~Emerging~~Brazil” ~~markets~~includes ~~are~~Brazil, ~~“emerging and developing economies” as defined by the IMF. Our top emerging markets were Mexico~~Paraguay, ~~Poland~~Uruguay, and ~~Brazil.~~certain ~~This~~other ~~aggregation~~surrounding ~~represents our net sales of branded products to these markets~~territories.

•“Brazil” includes Brazil, Uruguay, Paraguay, and certain other surrounding territories.

•“Travel Retail” represents our net sales of branded products to global duty-free customers, other travel retail customers, and the U.S. military, regardless of customer location.

•“Non-branded and bulk” includes net sales of used barrels, contract bottling services, and non-branded bulk whiskey, regardless of customer location.

Brand Aggregations.

In “Results of Operations - Fiscal ~~2025~~2026 Year-to-Date Highlights,” we provide supplemental information for our top brands ranked by percentage of net sales. In addition to brands listed by name, we include the following aggregations outlined below.

Beginning in fiscal 2025, we aggregated the “Wine” and “Vodka” product categories with “Rest of Portfolio,” due to the divestitures of Sonoma-Cutrer and Finlandia. Please refer to the new definition of "Rest of Portfolio” for more information. The fiscal 2024 "Rest of Portfolio" amounts have been adjusted accordingly for comparison purposes.19

•“Whiskey” includes all whiskey spirits and whiskey-based flavored liqueurs. The brands included in this category are the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below), the Woodford Reserve family of brands (Woodford Reserve), the Old Forester family of brands (Old Forester), The Glendronach, ~~Glenglassaugh~~Benriach, ~~Benriach~~Glenglassaugh, and Slane Irish Whiskey~~, and Coopers’ Craft~~.

•“American whiskey” includes the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below), Woodford Reserve, ~~Old Forester,~~ and ~~Coopers’~~Old ~~Craft~~Forester.

•“Super-premium American whiskey” includes Woodford Reserve, Gentleman Jack, and other super-premium Jack Daniel'’s expressions.

•“Ready-to-Drink” includes all ready-to-drink (RTD) and ready-to-pour (RTP) products. The brands included in this category are Jack Daniel’s RTD and RTP products (JD RTD/RTP), New Mix, and other RTD/RTP products.

•“Jack Daniel’s RTD/RTP” products include all RTD line extensions of Jack Daniel’s, such as Jack Daniel’s & Coca-Cola RTD, Jack Daniel’s & ~~Coca-~~Cola ~~RTD~~, Jack Daniel’s ~~Country~~Double ~~Cocktails~~Jack, Jack Daniel’s ~~Double~~Country ~~Jack~~Cocktails, and other malt- and spirit-based Jack Daniel’s RTDs, along with Jack Daniel’s Winter Jack RTP.

•“Jack Daniel’s & Coca-Cola RTD” includes all Jack Daniel’s & Coca-Cola RTD products and Jack Daniel’s bulk whiskey shipments for the production of these products.

•“Tequila” includes el Jimador, the Herradura family of brands (Herradura), and other tequilas.

•“Rest of Portfolio” includes Korbel California Champagnes1, Diplomático, Chambord, Gin Mare, Sonoma-Cutrer (which was divested on April 30, 2024), ~~Korbel California Champagnes, Diplomático, Gin Mare, Chambord,~~ Finlandia Vodka (which was divested on November 1, 2023), ~~Fords~~Korbel ~~Gin~~Brandy1, ~~Korbel~~Fords ~~Brandy~~Gin, and other agency brands (brands we do not own, but sell in certain markets).

•“Non-branded and bulk” includes net sales of used barrels, contract bottling services, and non-branded bulk whiskey ~~and wine~~.

•“Jack Daniel’s family of brands” includes Jack Daniel’s Tennessee Whiskey (JDTW), JD RTD/RTP, Jack Daniel’s Tennessee Honey (JDTH), Gentleman Jack, Jack Daniel’s Tennessee Apple (JDTA), Jack Daniel’s Tennessee Fire (JDTF), Jack Daniel’s Tennessee Blackberry (JDTB), Jack Daniel’s Single Barrel Collection (JDSB), Jack Daniel’s ~~Bonded~~Sinatra ~~Tennessee Whiskey~~Select, Jack Daniel’s ~~Sinatra~~Bonded ~~Select~~Tennessee Whiskey, Jack Daniel’s ~~Tennessee~~Bonded Rye ~~Whiskey~~Tennessee ~~(JDTR)~~Whiskey, Jack Daniel’s Triple Mash Blended Straight Whiskey, Jack Daniel’s ~~Bottled-in-Bond~~American Single Malt, Jack Daniel’s ~~American~~12 ~~Single~~Year ~~Malt~~Old, Jack Daniel’s 1214 Year Old, Jack Daniel’s 10 Year Old, and other Jack Daniel’s expressions.

Other Metrics.

•“Shipments.” We generally record revenues when we ship or deliver our products to our customers. In this report, unless otherwise specified, we refer to shipments when discussing volume.

•“Depletions.” This metric is commonly used in the beverage alcohol industry to describe volume. Depending on the context, depletions usually means either (a) where Brown-Forman is the distributor, shipments directly to retail or wholesale customers or (b) where Brown-Forman is not the distributor, shipments from distributor customers to retailers and wholesalers. We believe that depletions measure volume in a way that more closely reflects consumer demand than our shipments to distributor customers do.

•“Consumer takeaway.” When discussing trends in the market, we refer to consumer takeaway, a term commonly used in the beverage alcohol industry that refers to the purchase of product by consumers from retail outlets, including products purchased through e-commerce channels, as measured by volume or retail sales value. This information is provided by outside parties, such as Nielsen and the National Alcohol Beverage Control Association (NABCA). Our estimates of market share or changes in market share are derived from consumer takeaway data using the retail sales value metric. We believe consumer takeaway is a leading indicator of consumer demand trends.

23•“Estimated net change in distributor inventories.” We generally recognize revenue when our products are shipped or delivered to customers. In the United States and certain other markets, our customers are distributors that sell downstream to retailers and consumers. We believe that our distributors’ downstream sales more closely reflect actual consumer demand than do our shipments to distributors. Our shipments increase distributors’ inventories, while distributors’ depletions (as described above) reduce their inventories. Therefore, it is possible that our shipments do not coincide with distributors’ downstream depletions and merely reflect changes in distributors’ inventories. Because changes in

~~outside~~1Ended ~~parties, such as Nielsen and~~ the ~~National~~Korbel ~~Alcohol~~relationship ~~Beverage~~effective ~~Control~~June ~~Association~~30, ~~(NABCA)~~2025. Our estimates of market share or changes in market share are derived from consumer takeaway data using the retail sales value metric. We believe consumer takeaway is a leading indicator of consumer demand trends.

•“Estimated net change in distributor inventories.” We generally recognize revenue when our products are shipped or delivered to customers. In the United States and certain other markets, our customers are distributors that sell downstream to retailers and consumers. We believe that our distributors’ downstream sales more closely reflect actual consumer demand than do our shipments to distributors. Our shipments increase distributors’ inventories, while distributors’ depletions (as described above) reduce their inventories. Therefore, it is possible that our shipments do not coincide with distributors’ downstream depletions and merely reflect changes in distributors’ inventories. Because changes in distributors’ inventories could affect our trends, we believe it is useful for investors to understand those changes in the context of our operating results. 20

distributors’ inventories could affect our trends, we believe it is useful for investors to understand those changes in the context of our operating results.

We perform the following calculation to determine the “estimated net change in distributor inventories”:

•For both the current-year period and the comparable prior-year period, we calculate a “depletion-based” amount by (a) dividing the organic dollar amount (e.g. organic net sales) by the corresponding shipment volumes to arrive at a shipment per case amount, and (b) multiplying the resulting shipment per case amount by the corresponding depletion volumes. We subtract the year-over-year percentage change of the “depletion-based” amount from the year-over-year percentage change of the organic amount to calculate the “estimated net change in distributor inventories.”

•A positive difference is interpreted as a net increase in distributors’ inventories, which implies that organic trends could decrease as distributors reduce inventories; whereas, a negative difference is interpreted as a net decrease in distributors’ inventories, which implies that organic trends could increase as distributors rebuild inventories.

Important Information on Forward-Looking Statements:

This report contains statements, estimates, and projections that are “forward-looking statements” as defined under U.S. federal securities laws. Words such as “aim,” “ambition,” “anticipate,” “aspire,” “believe,” “can,” “continue,” “could,” “envision,” “estimate,” “expect,” “expectation,” “intend,” “may,” “might,” “plan,” “potential,” “project,” “pursue,” “see,” “seek,” “should,” “will,” “would,” and similar words indicate forward-looking statements, which speak only as of the date we make them. Except as required by law, we do not intend to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from those expressed in or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to:

•Our substantial dependence upon the continued growth of the Jack Daniel'’s family of brands

•Substantial competition from new entrants, consolidations by competitors and retailers, and other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free goods), marketing, category expansion, product introductions, or entry or expansion in our geographic markets or distribution networks

•Risks from changes to the trade policies, tariff and import and export regulations by the U.S. or foreign governments and the effectiveness of our actions to mitigate the negative impact on our margins, sales, and/or distributors

•Route-to-consumer changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, or result in higher fixed costs

•Disruption of our distribution network or inventory fluctuations in our products by distributors, wholesalers, or retailers

•Risks from changes to the trade policies, tariffs and import and export regulations of the U.S. or foreign governments and the effectiveness of our actions to mitigate the negative impact on our margins, sales, and/or distributors

•Changes in consumer preferences, consumption, or purchase patterns – particularly away from larger producers in favor of small distilleries or local producers, or away from brown spirits, our premium products, or spirits generally, and our ability to anticipate or react to them; further legalization of marijuana; bar, restaurant, travel, or other on-premise declines; shifts in demographic or health and wellness trends; or unfavorable consumer reaction to new products, line extensions, package changes, product reformulations, or other product innovation

•Route-to-consumer changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, or result in higher fixed costs

•Production facility, aging warehouse, or supply chain disruption

•Imprecision in supply/demand forecasting

•Higher costs, lower quality, or unavailability of energy, water, raw materials, product ingredients, or labor

•Risks associated with acquisitions, dispositions, business partnerships, or investments – such as acquisition integration, termination difficulties or costs, or impairment in recorded value

•Unfavorable global or regional economic conditions and related economic slowdowns or recessions, low consumer confidence, high unemployment, weak credit or capital markets, budget deficits, burdensome government debt, austerity measures, higher interest rates, higher taxes, political instability, higher inflation, deflation, lower returns on pension assets, or lower discount rates for pension obligations

•Impact of health epidemics and pandemics, and the risk of the resulting negative economic impacts and related governmental actions

measures, higher interest rates, higher taxes, political instability, higher inflation, deflation, lower returns on pension assets, or lower discount rates for pension obligations

•Product recalls or other product liability claims, product tampering, contamination, or quality issues

•Negative publicity related to our company, products, brands, marketing, executive leadership, employees, Board of Directors, family stockholders, operations, business performance, or prospects

•Failure to attract or retain key executive or employee talent

•Risks associated with being a U.S.-based company with a global business, including commercial, political, and financial risks; local labor policies and conditions; compliance with local trade practices and other regulations; terrorism, kidnapping, extortion, or other types of violence; and health pandemics

•Failure to comply with anti-corruption laws, trade sanctions and restrictions, or similar laws or regulations

•Fluctuations in foreign currency exchange rates, particularly due to a stronger U.S. dollar

•Changes in laws, regulatory measures, or governmental policies, especially those affecting production, importation, marketing, labeling, pricing, distribution, sale, or consumption of our beverage alcohol products

•Tax rate changes (including excise, corporate, sales or value-added taxes, property taxes, payroll taxes, import and export duties, and tariffs) or changes in related reserves, changes in tax rules or accounting standards, and the unpredictability and suddenness with which they can occur

•Decline in the social acceptability of beverage alcohol in significant markets

•Significant additional labeling or warning requirements or limitations on availability of our beverage alcohol products

•Counterfeiting and inadequate protection of our intellectual property rights

•Significant legal disputes and proceedings, or government investigations

•Cyber breach or failure or corruption of our key information technology systems or those of our suppliers, customers, or direct and indirect business partners, or failure to comply with personal data protection laws

•Our status as a family “controlled company” under New York Stock Exchange rules, and our dual-class share structure

For further information on these and other risks, please see the risks and uncertainties described in Part I, Item 1A. Risk Factors of our ~~2024~~2025 Form 10-K, and those described from time to time in our reports on Form 10-Q filed with the ~~Securities and Exchange Commission (~~SEC).

2522

Overview

Unless otherwise indicated, all related commentary is on a reported basis and is for the ~~nine~~three months ended ~~January~~July 31, 2025 compared to the same period last year.

Divestitures

During the ~~third~~fourth quarter of fiscal 2024, we sold the ~~Finlandia~~Sonoma-Cutrer ~~vodka~~wine business ~~for $196 million cash~~ and entered into a TSA, ~~for~~which ~~this~~ended ~~business~~in August 2024. The absence of the brand negatively impacted our net sales and operating income, ~~for~~though ~~the~~positively ~~three~~impacted ~~months~~our ~~and~~gross ~~nine months ended January 31, 2025. Gross~~ margin ~~was positively impacted~~ for the three months ~~and nine months~~ ended ~~January~~July 31, 2025.

During the ~~fourth~~first quarter of fiscal ~~2024~~2026, we ~~sold~~concluded the ~~Sonoma-Cutrer~~Korbel ~~wine~~relationship, ~~business~~effective inJune ~~exchange~~30, ~~for an ownership percentage of 21~~2025.4% inThis ~~Duckhorn~~had ~~along~~an ~~with~~immaterial ~~$50~~impact ~~million~~on ~~cash and entered into a TSA for this business. The absence of the brand negatively impacted~~ our net sales and operating income for the three months ~~and nine months~~ ended ~~January~~July 31, 2025., ~~Gross~~though ~~margin~~we ~~was~~expect ~~positively~~it ~~impacted~~to ~~for~~negatively ~~the~~impact ~~three~~our ~~months~~net ~~ended~~sales ~~January 31, 2025~~ and ~~negatively~~operating ~~impacted~~income for the ~~nine~~remainder ~~months ended January 31, 2025. On December 24, 2024, Duckhorn was acquired by Butterfly Equity and we recognized a $78 million gain on the sale~~ of ~~our~~fiscal ~~investment in Duckhorn during the three months ended January 31, 2025~~2026. ~~See Note 5 to the Condensed Consolidated Financial Statements for more information.~~

Restructuring ~~and other charges~~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 ~~the~~our ~~company’s~~ 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 quarter of fiscal 2026, we incurred additional restructuring charges associated with this initiative and completed the sale of the Brown-Forman Cooperage facility and related assets. Collectively, these actions negatively impacted our operating expenses and operating income for the three months ~~and nine months~~ ended ~~January~~July 31, 2025. See Note 6 to the Condensed Consolidated Financial Statements for more information.

~~Fiscal~~United ~~2025~~States ~~Year-to-Date~~Distributor ~~Highlights~~Evolution

~~•We~~During ~~delivered~~the ~~net~~first ~~sales~~quarter of ~~$3.1~~fiscal ~~billion~~2026, ~~for~~we transitioned our portfolio distribution in the ~~nine~~state ~~months~~of ~~ended~~California, ~~January~~effective 31May 1, 2025, aand ~~decrease~~we ofannounced ~~4%.~~the ~~The~~upcoming ~~decrease~~transition ~~was~~in ~~driven~~13 byadditional ~~(a)~~markets across the ~~negative~~United ~~effect~~States, ofeffective ~~acquisitions~~August ~~and~~1, ~~divestitures;~~2025. ~~(b)~~Net sales for the ~~negative~~three ~~effect~~months ofended ~~foreign~~July ~~exchange;~~31, ~~and~~2025 ~~(c)~~were positively impacted due to a net increase in distributor inventories related to the ~~impact~~transition, ofwhich ~~JDCC.~~we ~~The~~expect ~~decrease~~to ~~was~~normalize ~~partially~~in ~~offset~~the byremainder ~~higher~~of ~~volumes.~~fiscal 2026.

~~◦From~~Fiscal a2026 ~~brand perspective, net sales declines were led by the Finlandia and Sonoma~~Year-~~Cutrer divestitures, our Tequila portfolio, and the impact of JDCC, partially offset by growth of Woodford Reserve and the non~~to-~~branded~~Date ~~and bulk business (primarily used barrel sales).~~Highlights

~~◦From~~During athe ~~geographic~~three ~~perspective~~months ended July 31, ~~net~~2025, ~~sales~~the ~~declined~~operating ~~across~~environment ~~geographic~~remained ~~aggregations~~challenging due to ongoing macroeconomic and geopolitical uncertainties, which we believe negatively impacted consumer confidence and reduced discretionary spending in many of our top markets.

•We delivered ~~gross~~net ~~profit~~sales of $~~1.8~~924 ~~billion~~million for the ~~nine~~three months ended ~~January~~July 31, 2025, a decrease of 63%. ~~Gross margin decreased 1.5 percentage points to 59.4% from 60.9% in the same period last year.~~ The decrease ~~in gross margin~~ was ~~largely~~ driven by the ~~higher~~negative ~~costs~~effect of acquisitions and divestitures and the negative effect of foreign exchange, partially offset by ~~favorable~~higher ~~price/mix, the impact of JDCC, and the positive effect of acquisitions and divestitures~~volumes.

~~•We~~◦From ~~delivered~~a ~~operating~~brand ~~income of $902 million for the nine months ended January 31~~perspective, ~~2025,~~net asales ~~decrease~~declines ofwere ~~13%,~~led ~~largely driven~~ by ~~(a)~~the ~~higher~~Sonoma-Cutrer ~~costs~~divestiture, ~~(b)~~JDTW, ~~the absence of the gain on sale of the Finlandia vodka business; (c) the negative effect of foreign exchange;~~ and ~~(d)~~used ~~restructuring~~barrel ~~and~~sales, ~~other costs. The decrease was~~ partially offset by ~~(a)~~the ~~lower~~distributor ~~SG&A~~inventory ~~and~~build ~~advertising~~in ~~expenses;~~preparation ~~(b)~~for ~~favorable price/mix; (c)~~ the ~~franchise~~launch ~~tax~~of ~~refund;~~JDTB ~~and~~in ~~(d)~~ the ~~gain~~United ~~on sale of the Alabama cooperage~~States.

~~•We~~◦From ~~delivered~~a ~~diluted~~geographic ~~earnings~~perspective, ~~per share of $1.53 for~~ the ~~nine~~declines ~~months~~in ~~ended~~net ~~January~~sales ~~31,~~in ~~2025, a decrease of 4% from~~ the ~~$1.58~~United ~~reported~~States ~~for~~and ~~the~~developed ~~same~~international ~~period~~markets ~~last~~were ~~year, driven primarily by the decrease in operating income,~~ partially offset by ~~the~~growth ~~gain on sale of our investment~~ in ~~Duckhorn~~emerging markets and ~~the~~Travel ~~benefit of the lower effective tax rate~~Retail.

26•We delivered gross profit of $552 million for the three months ended July 31, 2025, a decrease of 2%. Gross margin increased 0.4 percentage points to 59.8% from 59.4% in the same period last year. The increase in gross margin was driven by the positive effect of acquisitions and divestitures, partially offset by higher costs, unfavorable price/mix, and the negative effect of foreign exchange.

Summary of Operating Performance
	Three Months Ended January 31,										Nine Months Ended January 31,
(Dollars in millions)	2024			2025			Reported Change		Organic Change1			2024			2025			Reported Change		Organic Change1
Net sales	$	1,069		$	1,035		(3	%)	6	%		$	3,214		$	3,081		(4	%)	2	%
Cost of sales	434			416			(4	%)	7	%		1,257			1,251			—	%	6	%
Gross profit	635			619			(3	%)	5	%		1,957			1,830			(6	%)	(1	%)
Advertising	143			125			(13	%)	(9	%)		414			377			(9	%)	(6	%)
SG&A	203			178			(13	%)	(7	%)		595			551			(7	%)	(4	%)
Restructuring and other charges	—			31			nm4		nm4			—			33			nm4		nm4
Gain on sale of business	(90)			—			nm4		nm4			(90)			—			nm4		nm4
Other expense (income), net	6			5			nm4		nm4			(1)			(33)			nm4		nm4
Operating income	373			280			(25	%)	23	%		1,039			902			(13	%)	5	%
Total operating expenses2	$	352		$	339		(4	%)	(9	%)		$	1,008		$	928		(8	%)	(6	%)
Equity method investment income and gain on sale	—			(81)			nm4		nm4			—			(83)			nm4		nm4
As a percentage of net sales3
Gross profit	59.4		%	59.8		%	0.4	pp				60.9		%	59.4		%	(1.5)	pp
Operating income	34.9		%	27.1		%	(7.8)	pp				32.3		%	29.3		%	(3.0)	pp
Effective tax rate	16.5		%	18.7		%	2.2	pp				20.3		%	19.5		%	(0.8)	pp
Diluted earnings per share	$	0.60		$	0.57		(5	%)				$	1.58		$	1.53		(4	%)
Note: Totals may differ due to rounding

•We delivered operating income of $260 million for the three months ended July 31, 2025, a decrease of 7%, driven by (a) the negative effect of foreign exchange, (b) the absence of the prior-year franchise tax refund, (c) the impact of the restructuring initiative, (d) the decline in gross profit, and (e) the negative effect of acquisitions and divestitures. These declines were partially offset by the benefit of the substitution drawback claims and lower SG&A and advertising expenses.

•We delivered diluted earnings per share of $0.36 for the three months ended July 31, 2025, a decrease of 13% from the $0.41 reported for the same period last year, driven by the decrease in operating income and an increase in non-operating postretirement expense.


Summary of Operating Performance
	Three Months Ended July 31,
(Dollars in millions)		2024			2025			Reported Change		Organic Change1
Net sales		$	951		$	924		(3	%)	1	%
Cost of sales		386			372			(4	%)	5	%
Gross profit		565			552			(2	%)	(2	%)
Advertising		126			120			(4	%)	(3	%)
SG&A		188			177			(6	%)	(7	%)
Restructuring and other charges		—			12			nm4		nm4

Other expense (income), net		(30)			(17)			nm4		nm4
Operating income		281			260			(7	%)	2	%

Total operating expenses2		$	284		$	292		3	%	(5	%)



As a percentage of net sales3
Gross profit		59.4		%	59.8		%	0.4	pp

Operating income		29.6		%	28.2		%	(1.4)	pp
Non-operating postretirement expense		$	—		$	19		nm4
Interest expense, net		$	28		$	21		(23	%)

Effective tax rate		23.1		%	22.5		%	(0.6)	pp
Diluted earnings per share		$	0.41		$	0.36		(13	%)
Note: Totals may differ due to rounding

1See “Non-GAAP Financial Measures” above for details on our use of “organic change,” including how we calculate these measures and why we believe this information is useful to readers.

2Operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.

3Year-over-year changes in percentages are reported in percentage points (pp).

4Percentage change is not meaningful.

2724

Results of Operations – Fiscal ~~2025~~2026 Year-to-Date Highlights

Market Highlights

The following table provides supplemental information for our largest markets. We discuss results of the markets most affecting our performance below the table. Unless otherwise indicated, all related commentary is on a reported basis and is for the ~~nine~~three months ended ~~January~~July 31, 2025 compared to the same period last year.

Top Markets
Nine months ended January 31, 2025	Net Sales % Change vs. Prior Year Period
Three months ended July 31, 2025	Net Sales % Change vs. Prior Year Period
Geographic area1	Reported		Acquisitions and Divestitures		~~JDCC2~~		Foreign Exchange		~~Organic3~~Organic2
United States	(58	%)	36	%	2	%	—	%	(12	%)
Developed International	(58	%)	21	%	—	%	2(1	%)	(19	%)
Germany	(610	%)	—1	%	—	%	1(3	%)	(413	%)
Australia	(14	%)	(1	%)	—	%	23	%	(1	%)
United Kingdom	(516	%)	—1	%	—	%	—	%	(516	%)
France	(35	%)	—	%	—	%	2(3	%)	(28	%)
Canada	(662	%)	52	%	—	%	2—	%	2(59	%)
Spain	(9	%)	1	%	—	%	1	%	(7	%)
Rest of Developed International	1	%	1	%			(3	%)	(2	%)
Rest of Developed International	(6	%)	7	%	—	%	3	%	5	%
Emerging	20	%	1	%			3	%	25	%
Emerging	(4	%)	6	%	—	%	6	%	8	%
Mexico	14	%	—	%			9	%	22	%
Mexico	(9	%)	—	%	—	%	9	%	—	%
Poland	10	%	5	%			(10	%)	6	%
Poland	(13	%)	24	%	—	%	(5	%)	5	%
Brazil	31	%	—	%			(1	%)	30	%
Brazil	6	%	—	%	—	%	8	%	14	%
Türkiye	11	%	—	%			27	%	39	%
Rest of Emerging	—27	%	72	%	—	%	5(2	%)	1226	%
Travel Retail	(58	%)	2—	%	—	%	1(2	%)	(27	%)
Non-branded and bulk	38(44	%)	1—	%	—	%	—	%	39(44	%)
Total	(43	%)	3	%	1	%	2—	%	21	%
Note: Results may differ due to rounding

1See “Definitions” above for definitions of market aggregations presented here.

22See “~~JDCC~~Non-GAAP Financial Measures” isabove ~~included~~for indetails on our use of “~~other~~organic ~~items~~change”. ~~See~~in ~~“Non-GAAP~~net ~~Financial~~sales, ~~Measures”~~including ~~above~~how ~~for~~we ~~additional~~calculate ~~details~~this measure and why we believe this information is useful to readers.

~~3See~~The ~~“Non-GAAP~~United ~~Financial~~States’ ~~Measures”~~net ~~above~~sales ~~for~~declined ~~details~~8% ondriven ~~our~~by ~~use~~the absence of ~~“organic~~the ~~change”~~Sonoma-Cutrer inprior-year ~~net sales~~TSA, ~~including~~lower ~~how~~volumes weof ~~calculate~~JDTW ~~this~~and ~~measure~~Herradura, and ~~why~~the weend ~~believe~~of ~~this~~the ~~information~~Korbel isrelationship. ~~useful~~These declines were partially offset by the distributor inventory build in preparation for both the launch of JDTB and the distributor transitions to ~~readers~~occur in the second quarter of fiscal 2026.

The United States’ net sales declined 5% driven by (a) the divestiture of Sonoma-Cutrer; (b) lower volumes of Korbel California Champagnes, JDTW, and el Jimador; and (c) the impact of JDCC. The decline was partially offset by higher volumes and favorable price/mix of Woodford Reserve. An estimated net increase in distributor inventories positively impacted net sales.

Developed International

•In a challenging economic environment, Germany’s net sales ~~declined~~decreased 610% driven by ~~lower volumes of~~ JDTW ~~and JD RTDs~~declines, aspartially ~~well~~offset asby the ~~negative~~positive effect of foreign exchange. ~~The decline was partially offset by positive contribution from Diplomático.~~

•Australia’s net sales declined 14% driven by the negative effect of foreign exchange ~~and declines of agency brands, partially offset by growth of JD RTDs and JDTW~~.

•The United Kingdom’s net sales declined 516% ~~led~~driven by lower volumes of ~~the~~JDTW. ~~American~~The decline reflects soft consumer demand for the whiskey ~~portfolio~~category impacted by macroeconomic and geopolitical uncertainty.

•France’s net sales ~~decreased~~declined 35% ~~led~~driven by ~~declines~~lower ~~across~~JDTW ~~the~~volumes, ~~Jack~~partially ~~Daniel’s~~offset ~~family~~by ~~of brands and~~ the ~~negative~~positive effect of foreign exchange~~, partially offset by positive contribution from Diplomático~~.

•Canada’s net sales ~~declined~~decreased 662% driven by ~~the~~volumetric ~~divestitures~~declines of ~~Finlandia~~our American whiskey portfolio and ~~Sonoma-Cutrer,~~JD asRTDs ~~well~~due asto the ~~negative~~removal ~~effect~~ of ~~foreign~~American-made ~~exchange.~~alcohol ~~The~~from ~~decline~~retail ~~was~~shelves ~~partially~~in ~~offset~~most ~~by growth~~ of JDits ~~RTDs~~provinces.

2825

•~~Spain’s~~Net ~~net~~ sales ~~declined~~in 9the Rest of Developed International increased 1% ~~driven~~led by ~~lower~~the ~~volumes~~distribution of ~~JDTW~~new agency brands in Japan, the improved net pricing due to the transition to owned distribution in Italy, and the positive effect of foreign exchange. The increases were partially offset by ~~positive~~lower ~~contributions~~volumes ~~from~~of ~~Diplomático~~JDTW in Japan, South Korea, and ~~Gin~~Belgium, ~~Mare~~as well as an estimated net decrease in distributor inventories related to the transition to owned distribution in Italy.

•Net sales in the Rest of Developed International declined 6% driven by (a) the divestiture of Finlandia; (b) declines of the Jack Daniel’s family of brands in South Korea; (c) the absence of Glenglassaugh high-value cask sales as compared to the same prior-year period; and (d) lower volumes of The Glendronach in Taiwan. The decline was partially offset by higher volumes across our portfolio in Japan, led by JDTW, primarily due to changes in distributor ordering patterns as compared to the same prior-year period (transitioned to owned distribution in Japan on April 1, 2024).

Emerging

•Mexico’s net sales ~~declined~~increased 914% driven by ~~lower~~growth ~~volumes~~ of ~~the~~New ~~Tequila~~Mix ~~portfolio~~ and the ~~negative~~distribution ~~effect~~ of ~~foreign~~new ~~exchange~~agency brands. ~~The~~This ~~decline~~growth was partially offset by ~~growth~~the negative effect of ~~New~~foreign ~~Mix,~~exchange ~~the~~along ~~distribution~~with lower volumes of ~~new~~our ~~agency~~tequilas ~~brands,~~as ~~and~~consumer ~~higher~~preferences ~~volumes~~shifted ofto JDlower-priced ~~RTDs~~products.

•Poland’s net sales ~~declined~~increased 1310% driven by the ~~divestiture~~positive effect of ~~Finlandia,~~foreign ~~partially~~exchange ~~offset~~and by growth of JDTW ~~and~~due ~~the~~to ~~positive~~increased ~~effect~~consumer-led ofdemand, ~~foreign~~partially ~~exchange~~offset by the divestiture of Finlandia.

•Brazil’s net sales increased 631% ~~led~~driven by ~~higher~~the ~~volumes~~growth of JDTW and JDTA, ~~partially~~reflecting ~~offset~~continued bydistribution ~~the~~expansion ~~negative~~and ~~effect~~an ofestimated ~~foreign~~net ~~exchange.~~increase in distributor inventories.

•~~Net~~Türkiye’s net sales inincreased ~~the~~11%, ~~Rest~~driven ofby ~~Emerging were flat as~~ higher prices ofacross ~~JDTW~~our inportfolio, ~~Türkiye~~led ~~and~~by ~~volumetric growth of~~ JDTW, in ~~the~~response ~~United~~to ~~Arab~~high ~~Emirates~~inflation, ~~and~~partially ~~Sub-Saharan Africa were~~ offset by ~~(a)~~ the ~~divestiture of Finlandia; (b) the~~ negative effect of foreign exchange ~~(reflecting the strengthening of the dollar primarily against the Turkish lira); and (c) and lower volumes across the Jack Daniel’s family of brands in Chile~~. ~~An estimated net increase in distributor inventories positively impacted net sales.~~

~~Travel~~•Net ~~Retail’s~~sales ~~net~~in ~~sales~~the ~~declined~~Rest 5of Emerging increased 27%, driven by ~~lower~~higher volumes ofacross the ~~other~~rest ~~super-premium~~of Latin America, led by el Jimador; higher volumes of Jack Daniel’s ~~expressions,~~family ~~the divestiture~~ of ~~Finlandia~~brands, ~~and~~led by the ~~negative~~United ~~effect~~Arab ofEmirates ~~foreign~~due ~~exchange.~~to ~~The~~an ~~decline~~estimated ~~was~~net ~~partially~~increase ~~offset~~in bydistributor ~~growth~~inventories; and the positive effect of ~~Diplomático~~foreign exchange.

~~Non-branded~~Travel ~~and bulk~~Retail’s net sales increased 388% ~~driven~~due byto higher ~~prices~~volumes ~~for~~of ~~used~~JDTW ~~barrels~~and Gin Mare, partially timing related, as well as the positive effect of foreign exchange.

29Non-branded and bulk’s net sales decreased 44% driven by the decline of used barrel sales as demand and pricing adjusted to levels that reflect the current challenging and uncertain operating environment for our industry.

Brand Highlights

The following table provides supplemental information for our largest brands. We discuss results of the brands most affecting our performance below the table. Unless otherwise indicated, all related commentary is on a reported basis and is for the three months ended July 31, 2025 compared to the same period last year.

Major Brands
Nine months ended January 31, 2025	Net Sales % Change vs. Prior Year Period
Three months ended July 31, 2025	Net Sales % Change vs. Prior Year Period
Product category / brand family / brand1	Reported		Acquisitions and Divestitures		~~JDCC2~~		Foreign Exchange		~~Organic3~~Organic2
Whiskey	—	%	—	%	—	%	1—	%	2—	%
JDTW	1(4	%)	—	%	—	%	2—	%	2(4	%)
JDTH	(13	%)	—	%	—	%	2(1	%)	2(4	%)
Gentleman Jack	28	%	—	%	—	%	13	%	311	%
JDTA	(418	%)	—	%	—	%	4(2	%)	—16	%
JDTF	(4	%)	—	%	—	%	1—	%	(34	%)
Woodford Reserve	10(2	%)	—	%	—	%	—	%	10(1	%)
Old Forester	128	%	—	%	—	%	—	%	128	%
Rest of Whiskey	~~(21~~33	%)	—	%	—	%	1	%	~~(20~~34	%)
Ready-to-Drink	(46	%)	—	%	6	%	53	%	69	%
JD RTD/RTP	(72	%)	—	%	8	%	2—	%	3(1	%)
New Mix	226	%	—	%	—	%	1110	%	1336	%
Tequila	(151	%)	—	%	—	%	21	%	~~(13~~1	%)
el Jimador	~~(13~~14	%)	—	%	—	%	1	%	~~(11~~16	%)
Herradura	(1316	%)	—	%	—	%	21	%	(1115	%)
Rest of Portfolio	(3127	%)	3144	%	—	%	—	%	—17	%
Non-branded and bulk	38(44	%)	1—	%	—	%	—	%	39(44	%)
Note: Results may differ due to rounding

1See “Definitions” above for definitions of brand aggregations presented here.

2See “Non-GAAP Financial Measures” above for details on our use of “organic change” in net sales, including how we calculate this measure and why we believe this information is useful to readers.

2“JDCC” is included in “other items”. See “Non-GAAP Financial Measures” above for additional details.

Whiskey

•Net sales for JDTW ~~increased~~declined 14% ~~driven~~led by ~~higher~~lower volumes in ~~Japan~~the ~~following~~United States, Germany, and the ~~transition~~United toKingdom, ~~owned-distribution~~partially ~~and~~offset by volumetric growth in Brazil along with higher prices in Türkiye in response to high inflation ~~and currency devaluation~~. ~~The~~An ~~growth~~estimated ~~was~~net ~~partially~~increase ~~offset~~in bydistributor ~~lower~~inventories ~~volumes~~ in ~~the~~our ~~United~~emerging ~~States.~~markets, Anled ~~estimated~~by ~~net~~the ~~increase~~United inArab ~~distributor~~Emirates, ~~inventories~~ positively impacted net sales.

•Net sales for JDTH declined 13% driven by ~~the negative effect of foreign exchange and~~ lower volumes in developed international markets and the United States, partially offset by ~~growth~~higher volumes in emerging ~~international~~ markets., Anled ~~estimated~~by ~~net~~Chile, ~~increase~~and inthe ~~distributor~~positive ~~inventories~~effect ~~positively~~of ~~impacted~~foreign ~~net sales~~exchange.

•Net sales for Gentleman Jack increased 28% led by higher prices and volumes in Türkiye and volumetric growth in Germany, partially offset by the negative effect of foreign exchange. ~~An estimated net increase in distributor inventories positively impacted net sales.~~

•Net sales for JDTA ~~decreased~~increased 418% driven by ~~South~~broad-based ~~Korea~~growth in emerging markets, led by Brazil, which was partially due to an estimated net increase in distributor inventories, and the ~~negative~~positive effect of foreign exchange,. These increases were partially offset by ~~higher~~declines ~~volumes~~ in ~~Brazil~~South ~~and higher prices in Türkiye~~Korea.

•~~Woodford~~Net ~~Reserve’s~~sales ~~net~~for ~~sales~~JDTF ~~increased~~declined 104% driven by ~~higher~~lower volumes, ~~partially reflecting an estimated net increase~~ in ~~distributor inventories, and favorable price/mix in~~ the United States.

•~~Old~~Woodford ~~Forester~~Reserve’s net sales ~~increased~~declined 122% driven by ~~favorable~~lower ~~product~~volumes in the United States, partially due to the distributor transitions, and the removal of American-made alcohol from retail shelves in most Canadian provinces. These declines were partially offset by favorable mix in the United States.

3027

•~~Net~~Old ~~sales~~Forester’s ~~for~~net ~~Rest~~sales ofincreased ~~Whiskey decreased 21~~8% driven by ~~the~~favorable ~~other~~product ~~super-premium~~mix ~~Jack~~and ~~Daniel's~~higher ~~expressions~~volumes ~~and~~in ~~The~~the ~~Glendronach~~United States, asreflecting ~~well~~the asdistributor ~~the~~inventory ~~absence~~build ofin ~~Glenglassaugh~~preparation ~~high-value~~for ~~cask~~the ~~sales~~the asdistributor ~~compared~~transitions to occur in the ~~same~~second ~~prior-year~~quarter ~~period~~of fiscal 2026.

•Net sales for Rest of Whiskey increased 33% driven by the distributor inventory build in preparation for the launch of JDTB, partially offset by lower volumes of other super-premium Jack Daniel’s expressions.

Ready-to-Drink

•Net sales for the JD RTD/RTP brands declined 72% driven by ~~the~~lower ~~impact~~volumes ofin ~~JDCC,~~Canada ~~the~~due ~~negative~~to ~~effect~~the removal of ~~foreign~~American-made ~~exchange,~~alcohol ~~and~~from ~~lower~~retail ~~volumes~~shelves in ~~Germany~~most of its provinces. ~~The~~These ~~decline~~declines ~~was~~were partially offset by higher volumes in the United States, along with growth of Jack Daniel’s bulk whiskey shipments for the production of Jack Daniel’s & Coca-Cola RTD products ~~along with higher volumes in the United States reflecting an estimated net increase in distributor inventories~~.

•New Mix net sales increased 226% driven by ~~higher~~strong ~~volumes~~growth in Mexico with market share gains in a growing category, partially offset by the negative effect of foreign exchange.

Tequila

•el Jimador’s net sales ~~declined~~increased 1314% driven by ~~lower~~higher volumes in the United States ~~and~~due ~~Mexico~~to the roll-out of the new bottle design, ~~partially~~inventory ~~offset~~build byahead ~~higher~~of ~~prices~~the distributor transitions in 13 states, and the ~~United~~new ~~States~~innovation launch of the Cristalino expression.

•Herradura’s net sales declined 1316% ~~led~~driven by lower volumes in ~~Mexico~~the United States.

Net sales for Rest of Portfolio declined 3127% driven by the ~~divestitures~~absence of ~~Finlandia and~~ Sonoma-Cutrer. ~~Positive~~and ~~contributions~~Finlandia ~~from~~prior-year ~~Diplomático~~TSAs and ~~Gin~~the ~~Mare~~net decrease in distributor inventories due to the end of the Korbel relationship. These declines were partially offset by ~~lower~~the ~~volumes~~distribution of ~~Korbel~~new ~~California~~agency ~~Champagnes~~brands in ~~the~~Japan ~~United~~and ~~States.~~Mexico, Analong ~~estimated~~with ~~net~~growth ~~increase~~of Gin Mare in ~~distributor~~Italy ~~inventories~~partially ~~positively~~due ~~impacted~~to ~~net~~the ~~sales~~transition to owned distribution.

Non-branded and bulk’s net sales ~~increased~~decreased 3844% driven by ~~higher~~the ~~prices~~decline ~~for~~of used ~~barrels~~barrel sales as demand and pricing adjusted to levels that reflect the current challenging and uncertain operating environment for our industry.

3128

Year-Over-Year Period Comparisons

Net Sales
	3 Months						9 Months
Percentage change versus the prior year period ended January 31	Volume		Price/mix		Total		Volume		Price/mix		Total
Change in reported net sales	(2	%)	(1	%)	(3	%)	(8	%)	4	%	(4	%)
Acquisitions and divestitures	7	%	(2	%)	4	%	5	%	(2	%)	3	%
JDCC1	4	%	(3	%)	1	%	5	%	(4	%)	1	%
Foreign exchange	—	%	4	%	4	%	—	%	2	%	2	%
Change in organic net sales	8	%	(2	%)	6	%	1	%	—	%	2	%
Note: Results may differ due to rounding

Unless otherwise indicated, all related commentary is on a reported basis and is for the three months ended July 31, 2025 compared to the same period last year.

1“JDCC” is included in “other items”. See “Non-GAAP Financial Measures” above for additional details.


Net Sales
	3 Months
Percentage change versus the prior year period ended July 31	Volume		Price/mix		Total
Change in reported net sales	3	%	(6	%)	(3	%)
Acquisitions and divestitures	3	%	—	%	3	%

Foreign exchange	—	%	—	%	—	%
Change in organic net sales	6	%	(5	%)	1	%
Note: Results may differ due to rounding

For the three months ended ~~January~~July 31, 2025, net sales were $~~1.0 billion~~924 million, a decrease of $3327 million, or 3%, ~~driven~~as unfavorable price/mix was partially offset by ~~(a)~~higher ~~the~~volumes. ~~negative~~Volume ~~effect~~increased 3% driven by higher volumes of ~~acquisitions~~New ~~and~~Mix ~~divestitures;~~as ~~(b)~~well as the ~~negative~~United ~~effect~~States ofdistributor ~~foreign~~inventory ~~exchange;~~build ~~(c)~~in ~~unfavorable~~preparation ~~price/mix;~~for both the launch of JDTB and ~~(d)~~the distributor transitions to occur in the ~~impact~~second quarter of ~~JDCC~~fiscal 2026, partially offset by ~~higher~~the divestiture of Sonoma-Cutrer and lower volumes of JDTW. ~~Higher~~Price/mix ~~volumes~~declined ~~were~~6% ~~led~~driven by unfavorable portfolio mix from New Mix, ~~JDTW,~~ and JDlower ~~RTDs.~~sales ~~Price/mix~~of ~~primarily~~used ~~reflects~~barrels, apartially offset by the positive portfolio mix ~~shift~~impact from JDTB. See “Results of Operations - Fiscal 2026 Year-to-Date ~~our~~Highlights” ~~lower~~above ~~priced~~for ~~brands~~further details on net sales for the three months ended July 31, 2025.

For the nine months ended January 31, 2025, net sales were $3.1 billion, a decrease of $133 million, or 4%, driven by (a) the negative effect of acquisitions and divestitures; (b) the negative effect of foreign exchange; and (c) the impact of JDCC, partially offset by higher volumes. Higher volumes were primarily led by New Mix and JDTW. Price/mix reflects an unfavorable portfolio mix shift offset by growth of the non-branded and bulk business (primarily used barrel sales). See “Results of Operations - Fiscal 2025 Year-to-Date Highlights” above for further details on net sales for the nine months ended January 31, 2025.


Cost of Sales
	3 Months
Percentage change versus the prior year period ended July 31	Volume		Cost/mix		Total
Change in reported cost of sales	3	%	(7	%)	(4	%)
Acquisitions and divestitures	3	%	6	%	9	%

Foreign exchange	—	%	(1	%)	(1	%)
Change in organic cost of sales	6	%	(1	%)	5	%
Note: Results may differ due to rounding

Cost of Sales
	3 Months						9 Months
Percentage change versus the prior year period ended January 31	Volume		Cost/mix		Total		Volume		Cost/mix		Total
Change in reported cost of sales	(2	%)	(2	%)	(4	%)	(8	%)	8	%	—	%
Acquisitions and divestitures	7	%	2	%	9	%	5	%	(1	%)	4	%
JDCC1	4	%	(2	%)	2	%	5	%	(3	%)	2	%
Foreign exchange	—	%	1	%	1	%	—	%	—	%	—	%
Change in organic cost of sales	8	%	(2	%)	7	%	1	%	5	%	6	%
Note: Results may differ due to rounding

For the three months ended July 31, 2025, cost of sales were $372 million, a decrease of $14 million, or 4%, as favorable cost/mix was partially offset by higher volumes. Volume increased 3% driven by higher volumes of New Mix as well as the United States distributor inventory build in preparation for both the launch of JDTB and the distributor transitions to occur in the second quarter of fiscal 2026, partially offset by the divestiture of Sonoma-Cutrer and lower volumes of JDTW. Cost/mix declined 7% driven by the divestiture of Sonoma-Cutrer and the favorable portfolio mix from New Mix, partially offset by the negative effect of foreign exchange, higher input costs, and unfavorable fixed cost absorption related to decreased production of our full-strength portfolio.

~~1“JDCC” is included in “other items”. See “Non-GAAP Financial Measures” above for additional details.~~29

For the three months ended January 31, 2025, cost of sales were $416 million, a decrease of $17 million, or 4%, driven by (a) the positive effect of the acquisitions and divestitures; (b) the impact of JDCC; (c) a shift in portfolio mix toward our lower-cost brands; and (d) the positive effect of foreign exchange. The declines were partially offset by higher input costs, unfavorable fixed cost absorption related to decreased production levels of our full-strength portfolio, and higher volumes of New Mix and JDTW.


Gross Profit
Percentage change versus the prior year period ended July 31	3 Months
Change in reported gross profit	(2	%)
Acquisitions and divestitures	(1	%)

Foreign exchange	1	%
Change in organic gross profit	(2	%)
Note: Results may differ due to rounding

For the nine months ended January 31, 2025, cost of sales were $1.3 billion, a decrease of $6 million, as the positive effect of acquisitions and divestitures and the impact of JDCC were offset by higher input costs, unfavorable fixed cost absorption related to decreased production levels of our full-strength portfolio, and higher volumes of New Mix and JDTW.


Gross Margin
For the period ended July 31	3 Months
Prior year gross margin	59.4	%
Price/mix	(0.5	%)
Cost	(0.9	%)
Acquisitions and divestitures	2.4	%


Foreign exchange	(0.5	%)
Change in gross margin	0.4	%
Current year gross margin	59.8	%
Note: Results may differ due to rounding	—

32For the three months ended July 31, 2025, gross profit totaled $552 million, a decrease of $12 million, or 2%. Gross margin increased 0.4 percentage points to 59.8% from 59.4% in the same period last year. The increase in gross margin was driven by the positive effect of acquisitions and divestitures, partially offset by higher costs, unfavorable price/mix, and the negative effect of foreign exchange.

Gross Profit
Operating Expenses
Percentage change versus the prior year period ended January 31	3 Months				9 Months
Percentage change versus the prior year period ended July 31
Change in reported gross profit	(3	%)			(6	%)
3 Months	Reported		Acquisitions and Divestitures		Other Items1		Foreign Exchange		Organic
Acquisitions and divestitures	2	%			3	%
Advertising	(4	%)	2	%	—	%	(1	%)	(3	%)
JDCC1	—	%			—	%
SG&A	(6	%)	—	%	(1	%)	(1	%)	(7	%)
Foreign exchange	6	%			3	%
Total operating expenses2	3	%	(3	%)	(3	%)	(2	%)	(5	%)
Change in organic gross profit	5	%			(1	%)
Note: Results may differ due to rounding
Note: Results may differ due to rounding

1“~~JDCC~~Other items” isincludes ~~included~~“substitution indrawback claims,” “~~other~~franchise ~~items~~tax refund,” and “restructuring initiative.” See “Non-GAAP Financial Measures” above for additional details.

Gross Margin
For the period ended January 31	3 Months		9 Months
Prior year gross margin	59.4	%	60.9	%
Price/mix	1.3	%	1.6	%
Cost	(1.6)	%	(3.2)	%
Acquisitions and divestitures	1.6	%	0.3	%
JDCC1	0.4	%	0.5	%
Foreign exchange	(1.3	%)	(0.7	%)
Change in gross margin	0.4	%	(1.5	%)
Current year gross margin	59.8	%	59.4	%
Note: Results may differ due to rounding	—		—

2Operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.

~~1“JDCC”~~For isthe ~~included~~three inmonths ~~“other~~ended ~~items”~~July 31, 2025, operating expenses totaled $292 million, an increase of $8 million, or 3%. ~~See~~The ~~“Non~~increase in operating expenses was primarily driven by (a) the absence of the prior-~~GAAP~~year ~~Financial~~franchise ~~Measures”~~tax ~~above~~refund, ~~for~~(b) ~~additional~~the ~~details~~absence of the prior-year gain on sale of the Alabama cooperage, (c) the impact of the restructuring initiative, and (d) the negative effect of foreign exchange, partially offset by the benefit of the substitution drawback claims and lower SG&A and advertising expenses.

~~For~~•Advertising expense decreased 4% for the three months ended ~~January~~July 31, 2025, ~~gross~~led ~~profit~~by oflower ~~$619 million~~JDTW ~~decreased~~spend ~~$16~~and ~~million,~~lower orspend ~~3%,~~resulting ~~compared to the same period last year. Gross margin increased to 59.8%~~ from ~~59.4% as compared to~~ the ~~same~~end ~~period last year. The increase in gross margin was largely driven by the positive effect~~ of ~~acquisitions and divestitures, favorable price/mix, and~~ the ~~impact~~Korbel ~~of JDCC~~relationship, partially offset by ~~higher costs and~~ the negative effect of foreign exchange.

~~For~~•SG&A ~~the~~expense ~~nine months ended January 31, 2025, gross profit of $1.8 billion~~ decreased ~~$127 million, or~~ 6%, ~~compared~~for to the ~~same~~three ~~period~~months ~~last~~ended ~~year.~~July ~~Gross~~31, ~~margin~~2025 ~~decreased~~driven toby ~~59.4%~~lower ~~from~~compensation-and-benefit-related ~~60.9%~~expenses, aspartially ~~compared~~offset ~~to the same period last year. The decrease in gross margin was largely driven~~ by ~~higher costs and~~ the negative effect of foreign exchange, ~~partially~~and ~~offset~~legal byfees ~~favorable~~related ~~price/mix,~~to the ~~impact~~substitution ofdrawback ~~JDCC, and the positive effect of acquisitions and divestitures~~claims.

3330

Operating Expenses
Operating Income
Percentage change versus the prior year period ended January 31
Percentage change versus the prior year period ended July 31	3 Months
3 Months	Reported		Acquisitions and Divestitures		Other Items1		Foreign Exchange		Organic
Change in reported operating income	(7	%)
Advertising	(13	%)	1	%	—	%	3	%	(9	%)
Acquisitions and divestitures	2	%
SG&A	(13	%)	3	%	—	%	3	%	(7	%)
Other items1	3	%
Total operating expenses2	(4	%)	3	%	(9	%)	1	%	(9	%)
Foreign exchange	5	%
9 Months
Change in organic operating income	2	%
Advertising	(9	%)	2	%	—	%	1	%	(6	%)
Note: Results may differ due to rounding
SG&A	(7	%)	2	%	—	%	1	%	(4	%)
Total operating expenses2	(8	%)	3	%	(2	%)	1	%	(6	%)
Note: Results may differ due to rounding

1“Other items” includes “~~restructuring~~substitution ~~and~~drawback ~~other charges~~claims,” ~~and~~ “franchise tax refund,” and “restructuring initiative.” See “Non-GAAP Financial Measures” above for additional details.

~~2Total~~For the three months ended July 31, 2025, operating ~~expenses~~income ~~include~~totaled ~~advertising~~$260 million, ~~expense~~a decrease of $21 million, ~~SG&A~~or ~~expense~~7%. Operating margin decreased 1.4 percentage points to 28.2% from 29.6% in the same period last year driven by (a) the negative effect of foreign exchange, ~~restructuring~~(b) ~~and~~the ~~other~~absence ~~charges~~of the prior-year franchise tax refund, ~~and~~(c) ~~other~~the ~~expense~~impact of the restructuring initiative, (~~income~~d) the decline in gross profit, ~~net~~and (e) the negative effect of acquisitions and divestitures. These declines were partially offset by the benefit of the substitution drawback claims and lower SG&A and advertising expenses.

~~For~~The effective tax rate for the three months ended ~~January~~July 31, 2025, ~~operating~~was ~~expenses totaled $339 million, a decrease of $13 million, or 4~~22.5%, compared to 23.1% for the same period last year. The decrease in ~~operating~~our ~~expenses~~effective ~~was~~tax ~~primarily~~rate was driven by the ~~decrease~~lower inimpact ~~SG&A~~of ~~and~~state ~~advertising~~taxes ~~expenses,~~and the ~~impact~~absence of ofthe ~~our~~impact ~~recently~~of ~~divested~~increased ~~brands,~~valuation ~~and~~allowances in the ~~positive~~prior ~~effect of foreign exchange~~period, partially offset by ~~restructuring~~the ~~and~~unfavorable ~~other~~year-over-year ~~charges~~impact of prior fiscal year true-ups.

~~•Advertising~~Diluted ~~expense~~earnings ~~decreased~~per ~~13%~~share of $0.36 for the three months ended ~~January~~July 31, 2025, ~~driven~~decreased by13% ~~timing~~from ofthe ~~lower~~$0.41 ~~JDTW~~reported ~~and~~for ~~JDTA~~the ~~spend,~~same asperiod ~~well~~last asyear ~~the~~driven ~~positive~~by ~~effect~~the ofdecrease ~~foreign~~in ~~exchange~~operating income and ~~the~~an ~~impact~~increase ofin ~~our~~non-operating ~~recently~~postretirement ~~divested brands~~expense.

~~•SG&A~~Fiscal ~~expense~~2026 decreased 13% for the three months ended January 31, 2025 reflecting (a) lower compensation-and-benefit-related expenses; (b) the absence of transaction-related expenses for the recent divestitures; (c) the positive effect of foreign exchange; and (d) lower discretionary spend.Outlook

~~For~~Below ~~the~~we ~~nine~~discuss ~~months~~our ~~ended~~outlook ~~January~~for ~~31,~~fiscal ~~2025~~2026, ~~operating~~which ~~expenses~~reflects ~~totaled~~the ~~$928 million~~trends, ~~a decrease of $80 million~~developments, ~~or 8%, compared to the same period last year. The decrease in operating expenses was primarily driven by (a) the decrease in SG&A~~ and ~~advertising~~uncertainties ~~expenses;~~ (b)including ~~the~~those ~~impact~~described ~~of our recently divested brands; (c~~above) ~~the~~that ~~positive~~we ~~effect~~expect ofto ~~foreign~~affect ~~exchange;~~our ~~(d) the franchise tax refund; and (e) the gain on sale of the Alabama cooperage, partially offset by restructuring and other charges~~business.

~~•Advertising~~We ~~expense~~continue ~~decreased~~to 9%anticipate ~~for~~ the ~~nine~~operating ~~months~~environment ~~ended~~for ~~January~~fiscal ~~31,~~2026 ~~2025~~to ~~driven~~be bychallenging, ~~(a)~~with ~~timing~~low ofvisibility ~~lower~~due ~~JDTW~~to macroeconomic and ~~JDTA~~geopolitical ~~spend;~~volatility ~~(b)~~as ~~lower~~we ~~Jack~~face ~~Daniel’s~~headwinds from consumer uncertainty, the potential impact from currently unknown tariffs, and ~~Coca~~lower non-~~Cola~~branded ~~RTD~~sales ~~spend~~of asused ~~compared~~barrels. toWe remain focused on building our business for the ~~prior-year~~long ~~period~~term ~~launch~~and innavigating the ~~United~~current ~~States;~~environment ~~(c)~~at pace with strategic initiatives in fiscal 2026 that we believe will unlock future growth led by the ~~impact~~significant evolution of our ~~recently~~U.S. ~~divested~~distribution, ~~brands;~~the restructuring initiative, and ~~(d)~~meaningful ~~the~~new ~~positive~~product ~~effect~~innovation. ofAccordingly, ~~foreign~~we ~~exchange.~~reiterate the following expectation for fiscal 2026:

•~~SG&A~~Organic ~~expense~~net ~~decreased~~sales 7%decline ~~for~~in the ~~nine months ended January 31, 2025 driven by (a) lower compensation~~low-~~and-benefit-related~~single ~~expenses;~~digit ~~(b) the absence of transaction-related expenses for the recent divestitures; (c) the positive effect of foreign exchange; and (d) lower discretionary spend~~range.

34•Organic operating income decline in the low-single digit range.

Operating Income
Percentage change versus the prior year period ended January 31	3 Months		9 Months
Change in reported operating income	(25	%)	(13	%)
Acquisitions and divestitures	24	%	11	%
Other items1	11	%	2	%
Foreign exchange	12	%	4	%
Change in organic operating income	23	%	5	%
Note: Results may differ due to rounding

•Our effective tax rate to be in the range of approximately 21% to 23%.

~~1“Other~~•Capital ~~items”~~expenditures ~~includes~~planned ~~“JDCC”,~~to ~~“restructuring~~be ~~and~~in ~~other~~the ~~charges”,~~range ~~and“franchise~~of ~~tax~~$125 ~~refund”.~~to ~~See~~$135 ~~“Non-GAAP Financial Measures” above for additional details~~million.

~~For the three months ended January~~ 31, 2025, operating income totaled $280 million, a decrease of $93 million, or 25%, compared to the same period last year. Operating margin decreased 7.8 percentage points to 27.1% from 34.9% in the same period last year driven by (a) the negative effect of acquisitions and divestitures (largely due to the absence of the gain on sale of the Finlandia vodka business); (b) restructuring and other charges; (c) the negative effect of foreign exchange; and (d) higher costs. The decrease was partially offset by lower SG&A and advertising expenses along with favorable price/mix.

For the nine months ended January 31, 2025, operating income totaled $902 million, a decrease of $137 million, or 13%, compared to the same period last year. Operating margin decreased 3.0 percentage points to 29.3% from 32.3% in the same period last year driven by (a) higher costs; (b) the negative effect of acquisitions and divestitures (largely due to the absence of the gain on sale of the Finlandia vodka business); (c) the negative effect of foreign exchange; and (d) restructuring and other charges. The decrease was partially offset by (a) lower SG&A and advertising expenses; (b) favorable price/mix; (c) the franchise tax refund; and (d) the gain on sale of the Alabama cooperage.

The effective tax rate for the three months ended January 31, 2025 was 18.7% compared to 16.5% for the same period last year. The increase in our effective tax rate was driven primarily by increased unfavorable tax effects of foreign earnings, the absence of the beneficial impact of tax rate differences on the sale of the Finlandia vodka business in the prior fiscal year, and higher state taxes, partially offset by the beneficial impact of prior fiscal year true-ups recorded in the current period and the beneficial impact of a change in tax status with respect to one of our foreign subsidiaries.

The effective tax rate for the nine months ended January 31, 2025 was 19.5% compared to 20.3% for the same period last year. The decrease in our effective tax rate was primarily due to the beneficial impact of prior fiscal year true-ups recorded in the current year, partially offset by higher state taxes, the increased unfavorable tax effects of foreign earnings, and the absence of the beneficial impact of tax rate differences on the sale of the Finlandia vodka business in the prior fiscal year.

Diluted earnings per share of $0.57 for the three months ended January 31, 2025, decreased 5% from the $0.60 reported for the same period last year driven primarily by the decrease in operating income, partially offset by the gain on sale of our investment in Duckhorn. Diluted earnings per share of $1.53 for the nine months ended January 31, 2025, decreased 4% from the $1.58 reported for the same period last year driven primarily by the decrease in operating income, partially offset by the gain on sale of our investment in Duckhorn and the benefit of the lower effective tax rate.

Fiscal 2025 Outlook

Below we discuss our outlook for fiscal 2025, which reflects the trends, developments, and uncertainties (including those described above) that we expect to affect our business.

The operating environment continues to be increasingly volatile due to geopolitical uncertainties and global macroeconomic conditions. Based on the currently known factors, we anticipate a return to organic net sales and organic operating income growth for fiscal 2025. Accordingly, we reaffirm the following expectations:

•Organic net sales growth in the 2% to 4% range.

•Organic operating income growth in the 2% to 4% range.

•Capital expenditures planned to be in the range of $180 to $190 million.

The forecasted effective tax rate range has been updated to approximately 20% to 22% from 21% to 23%.

Liquidity and Financial Condition

Liquidity. We generate strong cash flows from operations, which enable us to meet current obligations, fund capital expenditures, and return cash to our stockholders through regular dividends and, from time to time, through share repurchases and special dividends. We believe our investment-grade credit ratings (A1 by Moody’s and A- by Standard & Poor’s) provide us with financial flexibility when accessing global debt capital markets and allow us to reserve adequate debt capacity for investment opportunities and unforeseen events.

Our cash flows from operations are supplemented by our cash and cash equivalent balances, as well as access to other liquidity sources. Cash and cash equivalents were $~~446~~444 million at April 30, ~~2024~~2025, and $~~599~~471 million at ~~January~~July 31, 2025. As of ~~January~~July 31, 2025, approximately 3754% of our cash and cash equivalents were held by our foreign subsidiaries whose earnings we expect to reinvest indefinitely outside of the United States. We continue to evaluate our future cash requirements and may decide to repatriate additional cash held by our foreign subsidiaries, which may require us to provide for and pay additional taxes.

We have a $900 million commercial paper program that we use, together with our cash flows from operations, to fund our short-term operational needs. See Note 8 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for outstanding commercial paper balances, interest rates, and days to maturity at April 30, ~~2024~~2025, and ~~January~~July 31, 2025. The average balances, interest rates, and original maturities during the periods ended ~~January~~July 31, 2024 and 2025, are presented below.

Three Months Average

~~Nine Months Average~~

January 31,

July 31,

(Dollars in millions)

2024

2025

~~2024~~

~~2025~~

Average commercial paper (par amount)

$~~575~~438

$~~422~~288

~~$429~~

~~$463~~

Average interest rate

5.5152%

4.8060%

~~5.44%~~

~~5.16%~~

Average days to maturity at issuance

3329

5629

Our commercial paper program is supported by available commitments under our $900 million bank credit facility that expires on May 26, ~~2028~~2029. Although unlikely, under extreme market conditions, one or more participating banks may not be able to fund its commitments under our credit facility. To manage this counterparty credit risk, we partner with banks that have investment grade credit ratings, limit the amount of exposure we have with each bank, and monitor each bank’s financial conditions.

Our most significant short-term cash requirements relate primarily to funding our operations (such as expenditures for raw materials, production and distribution, advertising and promotion, and current taxes), repayment of our notes maturing in ~~April~~July ~~2025~~2026, dividend payments, and capital investments. We expect to meet our planned short-term liquidity needs through cash generated from operations and borrowings under our commercial paper program. If we have additional liquidity needs, we believe that we could access financing in the capital markets. Our most significant longer-term cash requirements primarily include payments related to our long-term debt, employee benefit obligations, and deferred tax liabilities.

We believe our current liquidity position, supplemented by our ability to generate positive cash flows from operations in the future, and our ample debt capacity enabled by our strong short-term and long-term credit ratings, will be sufficient to meet all of our expected future short- and long-term financial commitments.

Cash flows. Cash provided by operations of $~~446~~160 million during the ~~nine~~three months ended ~~January~~ July 31, 2025, increased $84143 million from the same period last year, reflecting lower working capital requirements, offset partially by lower earnings.

Cash provided by investing activities was $~~284~~2 million during the ~~nine~~three months ended ~~January~~ July 31, 2025, compared to $6310 million provided by investing activities during the same period last year. The $~~221~~8 million ~~increase~~decrease largely reflects ~~(a)~~an ~~proceeds of~~ $~~350~~18 million ~~from~~decrease ~~the sale of our equity method investment~~ in ~~Duckhorn in December 2024, (b) a $38 million increase in~~ proceeds from ~~other~~cooperage asset sales (~~primarily attributable to proceeds of~~ $51 million ~~received~~ from the sale of our Alabama cooperage assets in May 2024),; ~~and~~$33 ~~(c)~~million afrom ~~$31~~the ~~million~~sale ~~decline~~of our Brown-Forman Cooperage assets in ~~capital~~May ~~expenditures~~2025), partially offset by ~~(d)~~a ~~proceeds of~~ $~~194~~10 million ~~from~~decline ~~our divestiture of Finlandia~~ in ~~November~~capital ~~2023~~expenditures.

Cash used for financing activities was $~~546~~138 million during the ~~nine~~three months ended ~~January~~ July 31, 2025, compared to $~~212~~51 million in cash used for financing activities during the same prior-year period. The $~~334~~87 million increase largely reflects aan $~~719~~84 million increase in net repayments of short-term borrowings~~, partially offset by a $400 million decline in share repurchases~~.

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Dividends. See Note 9 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for information about cash dividends declared per share on our Class A and Class B common stock during fiscal ~~2025~~2026.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We face market risks arising from changes in foreign currency exchange rates, commodity prices, and interest rates. Foreign currency fluctuations affect our net investments in foreign subsidiaries and foreign currency-denominated cash flows. Commodity price changes can affect our production and supply chain costs. Interest rate changes affect (a) the fair value of our fixed-rate debt and (b) cash flows and earnings related to our variable-rate debt and interest-bearing investments. We manage market risks through procurement strategies as well as the use of derivative and other financial instruments. Our risk management program is governed by policies that authorize and control the nature and scope of transactions that we use to mitigate market risks. Since April 30, ~~2024~~2025, there have been no material changes to the market risks faced by us or to our risk management program as disclosed in our ~~2024~~2025 Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO) (our principal executive and principal financial officers), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)), as of the end of the period covered by this report. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures: (a) are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms; and (b) include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including the CEO and the CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting. There has been no change in our internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We operate in a litigious environment and we are sued in the normal course of business. We do not anticipate that any pending legal proceedings will have, individually or in the aggregate, a material adverse effect on our financial position, results of operations, or liquidity.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risks and uncertainties discussed in Part I, Item 1A. Risk Factors in our ~~2024~~2025 Form 10-K, which could materially adversely affect our business, financial condition, or future results. ~~The~~There ~~information presented below updates, and should be read in conjunction with, the risk factors disclosed in our 2024 Form 10-K. Otherwise, except as presented below, there~~ have been no material changes to the risk factors disclosed in our ~~2024~~2025 Form 10-K.

We are subject to risks from changes to the trade policies, tariffs and import and export regulations of the U.S. and foreign governments.

Changes in the import and export policies, including trade restrictions, new or increased tariffs or quotas, embargoes, sanctions and countersanctions, safeguards or customs restrictions by the U.S. and foreign governments, could require us to change the way we conduct business and negatively affect our business performance, financial condition, results of operations, and our relationships with customers, suppliers, and employees. Likewise, changes in laws and policies governing foreign trade, manufacturing, development, and investment in the territories or countries where we currently sell our products or conduct our business could adversely affect our business.

For example, the U.S. presidential administration has recently imposed tariffs on foreign imports into the United States, including an additional 20% tariff on all product imports from China and an additional 25% tariff on all product imports from Mexico and Canada. These actions have and are expected to continue to result in retaliatory measures on U.S. goods. If maintained, the newly announced tariffs and the potential escalation of trade disputes could pose a significant risk to our business, including an increase to the cost of our products and, to the extent we absorb the costs of tariffs and do not pass them through to our customers, higher cost of goods sold and lower gross profit and margins. The extent and duration of the tariffs and the resulting impact on general economic conditions on our business are uncertain and depend on various factors, including negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets. Further, actions we take to adapt to new tariffs or trade restrictions may cause us to modify our operations or forgo business opportunities. Likewise, tariffs and import and export regulations could also limit the availability of our products, prompt consumers to seek alternative products and provide an opportunity for competitors not subject to such tariffs to establish a presence in markets where we conduct our business.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended ~~January~~ July 31, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

The following documents are filed with this report:

Exhibit Index
10.1			~~Agreement~~Fiscal ~~dated~~2026 ~~November~~Form ~~15,~~of ~~2024, by and between Brown~~Performance-~~Forman~~Based ~~Corporation~~Restricted ~~and~~Stock ~~Matias~~Unit ~~Bentel.~~Award Agreement*
10.2			Fiscal 2026 Form of Employee Stock-Settled Stock Appreciation Right Award Agreement*
10.3			Brown-Forman Corporation 2025 Amended and Restated Supplemental Executive Retirement Plan*
10.4			Brown-Forman Corporation Amended and Restated Non-Employee Director Deferred Stock Unit Program*
31.1			CEO Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
31.2			CFO Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
32			CEO and CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (not considered to be filed).
101			The following materials from Brown-Forman Corporation's Quarterly Report on Form 10-Q for the quarter ended ~~January~~July 31, 2025, in Inline XBRL (eXtensible Business Reporting Language) format: (a) Condensed Consolidated Statements of Operations, (b) Condensed Consolidated Statements of Comprehensive Income, (c) Condensed Consolidated Balance Sheets, (d) Condensed Consolidated Statements of Cash Flows, and (e) Notes to the Condensed Consolidated Financial Statements.
104			Cover Page Interactive Data File in Inline XBRL format (included in Exhibit 101).

* Indicates management contract, compensatory plan, or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		BROWN-FORMAN CORPORATION
		(Registrant)
Date:	~~March~~August 528, 2025	By:	/s/ Leanne D. Cunningham
			Leanne D. Cunningham
			Executive Vice Presidentand Chief Financial Officer
			(On behalf of the Registrant andas Principal Financial Officer)

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