Brown-Forman Corporation
12/04/2025 | Press release | Distributed by Public on 12/04/2025 15:09
Quarterly Report for Quarter Ending October 31, 2025 (Form 10-Q)
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, 2025 (2025 Form 10-K). Note that the results of operations for the six months ended October 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 and second quarters of fiscal 2026, we had the following acquisitions and divestitures adjustments:
During fiscal 2023, we acquired Gin Mare Brand, S.L.U. and Mareliquid Vantguard, S.L.U., which owned the Gin Mare brand (Gin Mare). This adjustment removes the fair value adjustments to Gin Mare's contingent consideration liability that is payable in cash no later than July 2027 from our other expense (income), net and operating income.
During fiscal 2024, we sold our Finlandia vodka and Sonoma-Cutrer wine businesses and entered into related transition services agreements (TSAs) for these businesses. This adjustment removes the net sales, cost of sales, operating expenses, and operating income recognized pursuant to the TSAs related to distribution services in certain markets for the non-comparable period, which is activity from the first and second quarters of fiscal 2025.
During the first quarter of fiscal 2025, we recognized a gain of $12 million on the sale of the Alabama cooperage. This adjustment removes the gain from our other expense (income), net and operating income.
During the first quarter of fiscal 2026, we ended our sales, marketing, and distribution relationship with Korbel Champagne Cellars (Korbel relationship), effective June 30, 2025. This adjustment removes the net sales, cost of sales, operating expenses, and operating income for the non-comparable period, which is July through October of fiscal 2025 and 2026.
•"Other items." Other items include the additional items outlined below.
"Franchise tax refund."During the first quarter of fiscal 2025, we recognized a $13 million franchise tax refund due to a change in franchise tax calculation methodology for the state of Tennessee. This modification lowered our annual franchise tax obligation and was retroactively applied to franchise taxes paid during fiscal 2020 through fiscal 2023. This adjustment removes the franchise tax refund from our other expense (income), net and operating income.
"Restructuring initiative." During the third quarter of fiscal 2025, our Board of Directors approved a plan to reduce our structural cost base and realign resources toward future sources of growth. This included reducing our workforce by approximately 12% and closing the Louisville-based Brown-Forman Cooperage. We also offered a special, one-time early retirement benefit to qualifying U.S. employees. During the first and second quarters of fiscal 2026, we incurred $16 million in restructuring and other charges associated with this initiative and completed the sale of the
1Operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.
Brown-Forman Cooperage facility and related assets. Comparatively, we incurred $2 million in related restructuring and other charges in the second quarter of fiscal 2025, prior to the restructuring initiative's announcement. This adjustment removes the restructuring initiative impact from our operating expenses and operating income for the second quarter of fiscal 2025 and the first half of fiscal 2026. 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 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 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, and Canada. This aggregation represents our net sales of branded products to these markets.
•"Emerging" markets are "emerging and developing economies" as 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.
•"Brazil" includes Brazil, Paraguay, Uruguay, 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 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.
•"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, Benriach, Glenglassaugh, and Slane Irish Whiskey.
•"American whiskey"includes the Jack Daniel's family of brands (excluding the "Ready-to-Drink" products defined below), Woodford Reserve, and Old 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 & Cola, Jack Daniel's Double Jack, Jack Daniel's Country 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), Finlandia Vodka (which was divested on November 1, 2023), Korbel Brandy1, Fords 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.
•"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 Blackberry (JDTB), Jack Daniel's Tennessee Fire (JDTF), Jack Daniel's Single Barrel Collection (JDSB), Jack Daniel's Sinatra Select, Jack Daniel's Bonded Tennessee Whiskey, Jack Daniel's Bonded Rye Tennessee Whiskey, Jack Daniel's Triple Mash Blended Straight Whiskey, Jack Daniel's American Single Malt, Jack Daniel's 12 Year Old, Jack Daniel's 14 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.
•"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
1Ended the Korbel relationship effective June 30, 2025.
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.
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
•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 cannabis, hemp-derived products or other similar products; 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
•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 2025 Form 10-K, and those described from time to time in our reports on Form 10-Q filed with the SEC.
Overview
Unless otherwise indicated, all related commentary is on a reported basis and is for the six months ended October 31, 2025 compared to the same period last year.
Divestitures
During the fourth quarter of fiscal 2024, we sold the Sonoma-Cutrer wine business and entered into a TSA, which ended in August 2024. The absence of this brand negatively impacted our net sales and operating income, though positively impacted our gross margin for the three months and six months ended October 31, 2025.
During the first quarter of fiscal 2026, we ended the Korbel relationship, effective June 30, 2025. The absence of this brand negatively impacted our net sales and operating income, though positively impacted our gross margin for the three months and six months ended October 31, 2025.
Restructuring Initiative
During the third quarter of fiscal 2025, our Board of Directors approved a plan to reduce our structural cost base and realign resources toward future sources of growth. This included reducing our workforce by approximately 12% and closing the Louisville-based Brown-Forman Cooperage. We also offered a special, one-time early retirement benefit to qualifying U.S. employees. During the first half 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 six months ended October 31, 2025. See Note 6 to the Condensed Consolidated Financial Statements for more information.
United States Distributor Evolution
During the first half of fiscal 2026, we transitioned our portfolio distribution in the state of California, effective May 1, 2025, and in 13 additional markets across the United States, effective August 1, 2025. Our net sales in the first quarter of fiscal 2026 were positively impacted by the distributor inventory build in preparation for the transition, which largely subsided in the second quarter of fiscal 2026 as the new distributors became integrated in the markets. Our net sales for the three months and six months ended October 31, 2025, benefited from higher net pricing across the portfolio as a result of changes to our distributor relationship terms.
Fiscal 2026 Year-to-Date Highlights
During the six months ended October 31, 2025, the operating environment remained 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 net sales of $2.0 billion for the six months ended October 31, 2025, a decrease of 4%. The decrease was driven by the negative effect of acquisitions and divestitures and unfavorable portfolio mix, partially offset by higher volumes.
◦From a brand perspective, net sales declines were driven by the end of the Korbel relationship and the absence of the Sonoma-Cutrer prior-year TSA, as well as lower sales of JDTW and used barrels, partially offset by the launch of JDTB and higher volumes of New Mix.
◦From a geographic perspective, the declines in net sales in the United States and developed international markets were partially offset by growth in emerging markets and Travel Retail.
•We delivered gross profit of $1.2 billion for the six months ended October 31, 2025, a decrease of 4%. Gross margin increased 0.3 percentage points to 59.5% from 59.2% 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 and unfavorable price/mix.
•We delivered operating income of $565 million for the six months ended October 31, 2025, a decrease of 9%. Operating margin decreased 1.5 percentage points to 28.9% from 30.4% in the same period last year. The decrease was driven by (a) the decline in gross profit, (b) the impact of the restructuring initiative, (c) the absence of the prior-year franchise tax refund, and (d) the negative effect of foreign exchange. These declines were partially offset by the benefit of the substitution drawback claims, lower SG&A and advertising expenses, as well as the positive effect of acquisitions and divestitures.
•We delivered diluted earnings per share of $0.83 for the six months ended October 31, 2025, a decrease of 13% from the $0.96 reported for the same period last year, driven by the decrease in operating income and an increase in non-operating postretirement expense.
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Summary of Operating Performance
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| Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | 2024 | 2025 | Reported Change |
Organic Change1
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2024 | 2025 | Reported Change |
Organic Change1
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| Net sales | $ | 1,095 | $ | 1,036 | (5 | %) | (2 | %) | $ | 2,046 | $ | 1,960 | (4 | %) | - | % | |||||||||||||||||||||||||||||||||||||
| Cost of sales | 449 | 421 | (6 | %) | 3 | % | 835 | 793 | (5 | %) | 4 | % | |||||||||||||||||||||||||||||||||||||||||
| Gross profit | 646 | 615 | (5 | %) | (4 | %) | 1,211 | 1,167 | (4 | %) | (3 | %) | |||||||||||||||||||||||||||||||||||||||||
| Advertising | 126 | 126 | - | % | 1 | % | 252 | 246 | (2 | %) | (1 | %) | |||||||||||||||||||||||||||||||||||||||||
| SG&A | 185 | 187 | - | % | (1 | %) | 373 | 364 | (3 | %) | (4 | %) | |||||||||||||||||||||||||||||||||||||||||
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Restructuring and other charges
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2 | 4 |
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2 | 16 |
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| Other expense (income), net | (8) | (7) |
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(38) | (24) |
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| Operating income | 341 | 305 | (10 | %) | (9 | %) | 622 | 565 | (9 | %) | (4 | %) | |||||||||||||||||||||||||||||||||||||||||
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Total operating expenses2
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$ | 305 | $ | 310 | 1 | % | - | % | $ | 589 | $ | 602 | 2 | % | (2 | %) | |||||||||||||||||||||||||||||||||||||
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As a percentage of net sales3
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| Gross profit | 59.1 | % | 59.3 | % | 0.3 | pp | 59.2 | % | 59.5 | % | 0.3 | pp | |||||||||||||||||||||||||||||||||||||||||
| Operating income | 31.1 | % | 29.4 | % | (1.7) | pp | 30.4 | % | 28.9 | % | (1.5) | pp | |||||||||||||||||||||||||||||||||||||||||
| Non-operating postretirement expense | $ | 1 | $ | 3 |
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$ | 1 | $ | 22 |
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| Interest expense, net | $ | 29 | $ | 23 | (24 | %) | $ | 57 | $ | 44 | (24 | %) | |||||||||||||||||||||||||||||||||||||||||
| Effective tax rate | 17.6 | % | 20.2 | % | 2.6 | pp | 20.1 | % | 21.2 | % | 1.1 | pp | |||||||||||||||||||||||||||||||||||||||||
| Diluted earnings per share | $ | 0.55 | $ | 0.47 | (14 | %) | $ | 0.96 | $ | 0.83 | (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.
Results of Operations - Fiscal 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 six months ended October 31, 2025 compared to the same period last year.
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Top Markets
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| Six months ended October 31, 2025 |
Net Sales % Change vs. Prior Year Period
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Geographic area1
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Reported | Acquisitions and Divestitures | Foreign Exchange |
Organic2
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| United States | (9 | %) | 8 | % | - | % | - | % | |||||||||
| Developed International | (4 | %) | - | % | (2 | %) | (6 | %) | |||||||||
| Germany | (5 | %) | - | % | (4 | %) | (8 | %) | |||||||||
| Australia | (2 | %) | - | % | 3 | % | 1 | % | |||||||||
| United Kingdom | (13 | %) | 1 | % | - | % | (13 | %) | |||||||||
| France | 2 | % | - | % | (4 | %) | (2 | %) | |||||||||
| Canada | (62 | %) | 1 | % | - | % | (61 | %) | |||||||||
| Rest of Developed International | 5 | % | - | % | (3 | %) | 3 | % | |||||||||
| Emerging | 10 | % | 1 | % | 1 | % | 12 | % | |||||||||
| Mexico | 17 | % | - | % | 1 | % | 18 | % | |||||||||
| Poland | 4 | % | 6 | % | (9 | %) | - | % | |||||||||
| Brazil | 22 | % | - | % | (1 | %) | 21 | % | |||||||||
| Türkiye | (16 | %) | - | % | 23 | % | 8 | % | |||||||||
| Rest of Emerging | 10 | % | 1 | % | (1 | %) | 9 | % | |||||||||
| Travel Retail | 7 | % | - | % | (1 | %) | 6 | % | |||||||||
| Non-branded and bulk | (61 | %) | - | % | - | % | (61 | %) | |||||||||
| Total | (4 | %) | 4 | % | - | % | - | % | |||||||||
| Note: Results may differ due to rounding | |||||||||||||||||
1See "Definitions" above for definitions of market 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.
The United States'net sales declined 9% driven by the end of the Korbel relationship and the absence of the Sonoma-Cutrer prior-year TSA, as well as lower volumes of JDTW, Herradura, and JDTH. These declines were partially offset by the launch of JDTB, higher volumes of Woodford Reserve due in part to an estimated net increase in distributor inventories, and higher net pricing across the portfolio as a result of changes to our distributor relationship terms.
Developed International
•In a challenging economic environment, Germany'snet sales declined 5% driven by lower volumes of JDTW and JDTA, lower net pricing of JD RTD/RTP products, and unfavorable timing of retailer ordering patterns. These declines were partially offset by the positive effect of foreign exchange, higher volumes of Diplomático, and the launch of JDTB.
•Australia'snet sales declined 2% driven by the negative effect of foreign exchange, partially offset by favorable timing of retailer ordering patterns.
•TheUnited Kingdom'snet sales decreased 13% led by JDTW and JDTH declines reflecting soft consumer demand for the whiskey category impacted by macroeconomic and geopolitical uncertainty, as well as the absence of wholesaler and retailer purchases from the prior-year period. These declines were partially offset by the launch of JDTB.
•France'snet sales increased 2% driven by the positive effect of foreign exchange and higher volumes of Gin Mare, partially offset by JDTW declines impacted by soft consumer demand for the whiskey category.
•Canada'snet sales declined 62% driven by volumetric declines of our American whiskey portfolio and JD RTDs due to the continued absence of American-made beverage alcohol from retail shelves in most of its provinces.
•Net sales in the Rest of Developed International increased 5% led by the distribution of new agency brands in Japan, growth in Italy due to the transition to owned distribution, and the positive effect of foreign exchange. These increases were partially offset by lower volumes of JDTW, led by Belgium and South Korea, as well as changes in prior-year distributor ordering patterns in Italy ahead of the transition to owned distribution.
Emerging
•Mexico'snet sales increased 17% driven by higher volumes and prices of New Mix and the distribution of new agency brands. This growth was partially offset by declines of our tequilas as consumer preferences shifted to lower-priced products.
•Poland'snet sales increased 4% driven by the positive effect of foreign exchange, partially offset by the absence of the Finlandia prior-year TSA.
•Brazil'snet sales increased 22% driven by higher volumes of JDTA and JDTW, reflecting continued distribution expansion and favorable timing of retailer ordering patterns.
•Türkiye'snet sales declined 16% driven by the negative effect of foreign exchange and the discontinuation of an agency brand. These declines were partially offset by JDTW increases due to higher prices in response to inflation and volumetric gains.
•Net sales in the Rest of Emergingincreased 10%, primarily due to higher volumes of the Jack Daniel's family of brands and el Jimador across the rest of Latin America, as well as an estimated net increase in distributor inventories, led by the United Arab Emirates.
Travel Retail's net sales increased 7% due to higher volumes of JDTW, the favorable timing of ordering patterns, and the positive effect of foreign exchange.
Non-branded and bulk's net sales decreased 61% 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 six months ended October 31, 2025 compared to the same period last year.
| Major Brands | ||||||||||||||||||||
| Six months ended October 31, 2025 |
Net Sales % Change vs. Prior Year Period
|
|||||||||||||||||||
|
Product category / brand family / brand1
|
Reported | Acquisitions and Divestitures | Foreign Exchange |
Organic2
|
||||||||||||||||
| Whiskey | - | % | - | % | - | % | - | % | ||||||||||||
| JDTW | (6 | %) | - | % | - | % | (6 | %) | ||||||||||||
| JDTH | (6 | %) | - | % | (1 | %) | (6 | %) | ||||||||||||
| Gentleman Jack | (1 | %) | - | % | 1 | % | - | % | ||||||||||||
| JDTA | 16 | % | - | % | (2 | %) | 14 | % | ||||||||||||
| JDTF | (7 | %) | - | % | - | % | (8 | %) | ||||||||||||
| Woodford Reserve | 6 | % | - | % | - | % | 6 | % | ||||||||||||
| Old Forester | 2 | % | - | % | - | % | 2 | % | ||||||||||||
| Rest of Whiskey | 54 | % | - | % | - | % | 54 | % | ||||||||||||
| Ready-to-Drink | 5 | % | - | % | - | % | 5 | % | ||||||||||||
| JD RTD/RTP | (4 | %) | - | % | - | % | (4 | %) | ||||||||||||
| New Mix | 28 | % | - | % | 2 | % | 30 | % | ||||||||||||
| Tequila | (3 | %) | - | % | - | % | (3 | %) | ||||||||||||
| el Jimador | 1 | % | - | % | - | % | 2 | % | ||||||||||||
| Herradura | (11 | %) | - | % | - | % | (11 | %) | ||||||||||||
| Rest of Portfolio | (35 | %) | 59 | % | (2 | %) | 22 | % | ||||||||||||
| Non-branded and bulk | (61 | %) | - | % | - | % | (61 | %) | ||||||||||||
| 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.
Whiskey
•Net sales for JDTWdeclined 6% driven by lower volumes in the United States, Germany, and the United Kingdom. The declines were partially offset by volumetric growth in Brazil. An estimated net decrease in distributor inventories negatively impacted net sales, led by the United States, as we returned to more normal levels of inventory following the distributor transitions that were completed as of the second quarter of fiscal 2026.
•Net sales forJDTHdeclined 6% driven by lower volumes in the United States.
•Net sales forGentleman Jackdeclined 1% driven by the negative effect of foreign exchange. In addition, lower volumes in the United States were partially offset by higher volumes in Australia and Türkiye.
•Net sales for JDTA increased 16% driven by growth in Brazil, partially due to favorable timing of retailer ordering patterns as well as the continued distribution expansion.
•Net sales for JDTFdeclined 7% driven by lower volumes in the United States.
•Woodford Reserve's net sales increased 6% driven by the United States, which benefited from higher net pricing related to the distributor transitions and an estimated net increase in distributor inventories, partially offset by the continued absence of American-made beverage alcohol from retail shelves in most Canadian provinces.
•Old Forester'snet sales increased 2% driven by the United States, which benefited from higher net pricing related to the distributor transitions and an estimated net increase in distributor inventories.
•Net sales for Rest of Whiskeyincreased 54% driven by the launch of JDTB and the growth of The GlenDronach, both of which benefited from an estimated net increase in distributor inventories in the United States. This growth was partially offset by lower volumes of other super-premium Jack Daniel's expressions and Glenglassaugh.
Ready-to-Drink
•Net sales for theJD RTD/RTP brands declined 4% driven by lower volumes in Canada, due to the continued absence of American-made beverage alcohol from retail shelves in most of its provinces, and declines in the United States.
•New Mix net sales increased 28% driven by strong growth in Mexico with market share gains in a growing category.
Tequila
•el Jimador's net sales increased 1% led by higher volumes in the rest of Latin America, partially offset by declines in Mexico as consumer preferences shifted to lower-priced products. An estimated net increase in distributor inventories, primarily attributed to distributor transitions and buying patterns in the United States, positively impacted net sales.
•Herradura'snet sales declined 11% driven by lower volumes in the United States and unfavorable price/mix in Mexico.
Net sales for Rest of Portfolio declined 35% driven by the end of the Korbel relationship and the absence of Sonoma-Cutrer and Finlandia prior-year TSAs. These declines were partially offset by the distribution of new agency brands in Japan and Mexico, along with broad-based growth of Gin Mare, led by Italy due in part to the transition to owned distribution.
Non-branded and bulk's net sales decreased 61% 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.
Year-Over-Year Period Comparisons
|
Net Sales
|
||||||||||||||||||||||||||
| 3 Months | 6 Months | |||||||||||||||||||||||||
| Percentage change versus the prior year period ended October 31 | Volume | Price/mix | Total | Volume | Price/mix | Total | ||||||||||||||||||||
| Change in reported net sales | (2 | %) | (4 | %) | (5 | %) | - | % | (5 | %) | (4 | %) | ||||||||||||||
| Acquisitions and divestitures | 5 | % | - | % | 5 | % | 4 | % | - | % | 4 | % | ||||||||||||||
| Foreign exchange | - | % | (1 | %) | (1 | %) | - | % | - | % | - | % | ||||||||||||||
| Change in organic net sales | 3 | % | (5 | %) | (2 | %) | 4 | % | (5 | %) | - | % | ||||||||||||||
| Note: Results may differ due to rounding | ||||||||||||||||||||||||||
For the three months ended October 31, 2025, net sales were $1.0 billion, a decrease of $59 million, or 5%, driven by unfavorable price/mix and lower volumes. Volume declined 2% driven by the end of the Korbel relationship and lower volumes of JDTW and JD RTDs, partially offset by higher volumes of New Mix and the launch of JDTB, due in part to a net increase in distributor inventories in the United States. Price/mix declined 4% driven by unfavorable portfolio mix from New Mix and lower sales of used barrels, partially offset by the positive portfolio mix from JDTB and higher net pricing across the portfolio in the United States as a result of the changes to our distributor relationship terms.
For the six months ended October 31, 2025, net sales were $2.0 billion, a decrease of $86 million, or 4%, driven by unfavorable price/mix, while volume was flat. Volume was flat as the end of the Korbel relationship and the Sonoma-Cutrer prior-year TSA, as well as lower volumes of JDTW, were offset by higher volumes of New Mix and the launch of JDTB, due in part to a net increase in distributor inventories in the United States. Price/mix declined 5% driven by unfavorable portfolio mix from New Mix and lower sales of used barrels, partially offset by the positive portfolio mix impact from JDTB. See "Results of Operations - Fiscal 2026 Year-to-Date Highlights" above for further details on net sales for the six months ended October 31, 2025.
|
Cost of Sales
|
||||||||||||||||||||||||||
| 3 Months | 6 Months | |||||||||||||||||||||||||
| Percentage change versus the prior year period ended October 31 | Volume | Cost/mix | Total | Volume | Cost/mix | Total | ||||||||||||||||||||
| Change in reported cost of sales | (2 | %) | (4 | %) | (6 | %) | - | % | (5 | %) | (5 | %) | ||||||||||||||
| Acquisitions and divestitures | 5 | % | 4 | % | 8 | % | 4 | % | 5 | % | 9 | % | ||||||||||||||
| Foreign exchange | - | % | - | % | - | % | - | % | - | % | - | % | ||||||||||||||
| Change in organic cost of sales | 3 | % | - | % | 3 | % | 4 | % | (1 | %) | 4 | % | ||||||||||||||
| Note: Results may differ due to rounding | ||||||||||||||||||||||||||
For the three months ended October 31, 2025, cost of sales were $421 million, a decrease of $27 million, or 6%, driven by favorable cost/mix and lower volumes. Volume declined 2% driven by the end of the Korbel relationship and lower volumes of JDTW and JD RTDs, partially offset by higher volumes of New Mix and the launch of JDTB, due in part to a net increase in distributor inventories in the United States. Cost/mix declined 4% driven by the end of the Korbel relationship and favorable portfolio mix from New Mix. The decline was partially offset by unfavorable fixed cost absorption related to decreased production of our full-strength portfolio, inflation on our input costs, and timing of cost fluctuations.
For the six months ended October 31, 2025, cost of sales were $793 million, a decrease of $42 million, or 5%, driven by favorable cost/mix, while volume was flat. Volume was flat as the end of the Korbel relationship and the Sonoma-Cutrer prior-year TSA, as well as lower volumes of JDTW, were offset by higher volumes of New Mix and the launch of JDTB, due in part to a net increase in distributor inventories in the United States. Cost/mix declined 5% driven by the end of the Korbel relationship, the absence of the Sonoma-Cutrer prior-year TSA, and favorable portfolio mix from New Mix. The decline was partially offset by unfavorable fixed cost absorption related to decreased production of our full-strength portfolio, inflation on our input costs, and timing of cost fluctuations.
|
Gross Profit
|
|||||||||||
| Percentage change versus the prior year period ended October 31 | 3 Months | 6 Months | |||||||||
| Change in reported gross profit | (5 | %) | (4 | %) | |||||||
| Acquisitions and divestitures | 2 | % | 1 | % | |||||||
| Foreign exchange | (2 | %) | - | % | |||||||
| Change in organic gross profit | (4 | %) | (3 | %) | |||||||
| Note: Results may differ due to rounding | |||||||||||
|
Gross Margin
|
|||||||||||
| For the period ended October 31 | 3 Months | 6 Months | |||||||||
| Prior year gross margin | 59.1 | % | 59.2 | % | |||||||
| Price/mix | (0.7) | % | (0.5) | % | |||||||
| Cost | (1.0) | % | (1.1) | % | |||||||
| Acquisitions and divestitures | 1.5 | % | 1.9 | % | |||||||
| Foreign exchange | 0.4 | % | - | % | |||||||
| Change in gross margin | 0.3 | % | 0.3 | % | |||||||
| Current year gross margin | 59.3 | % | 59.5 | % | |||||||
| Note: Results may differ due to rounding | 0.001000 | - | |||||||||
For the three months ended October 31, 2025, gross profit totaled $615 million, a decrease of $32 million, or 5%. Gross margin increased to 59.3% from 59.1% in the same period last year. The increase in gross margin was driven by the positive effect of acquisitions and divestitures and the positive effect of foreign exchange, partially offset by higher costs and unfavorable price/mix.
For the six months ended October 31, 2025, gross profit totaled $1.2 billion, a decrease of $45 million, or 4%. Gross margin increased to 59.5% from 59.2% 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 and unfavorable price/mix.
|
Operating Expenses
|
||||||||||||||||||||
| Percentage change versus the prior year period ended October 31 | ||||||||||||||||||||
| 3 Months | Reported | Acquisitions and Divestitures |
Other Items1
|
Foreign Exchange | Organic | |||||||||||||||
| Advertising | - | % | 3 | % | - | % | (1 | %) | 1 | % | ||||||||||
| SG&A | - | % | - | % | - | % | (1 | %) | (1 | %) | ||||||||||
|
Total operating expenses2
|
1 | % | 1 | % | - | % | (1 | %) | - | % | ||||||||||
| 6 Months | ||||||||||||||||||||
| Advertising | (2 | %) | 3 | % | - | % | (1 | %) | (1 | %) | ||||||||||
| SG&A | (3 | %) | - | % | - | % | (1 | %) | (4 | %) | ||||||||||
|
Total operating expenses2
|
2 | % | (1 | %) | (2 | %) | (2 | %) | (2 | %) | ||||||||||
| Note: Results may differ due to rounding | ||||||||||||||||||||
1"Other items" includes "substitution drawback claims," "franchise tax refund," and "restructuring initiative." See "Non-GAAP Financial Measures" above for additional details.
2Total operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.
For the three months ended October 31, 2025, operating expenses totaled $310 million, an increase of $5 million, or 1%, compared to the same period last year. The increase in operating expenses was led by the negative effect of foreign exchange and the impact of the restructuring initiative, partially offset by lower advertising spend resulting from the end of the Korbel relationship.
•Advertising expense was flat for the three months ended October 31, 2025, as the increased investment for the new "That's What Makes Jack, JACK" global campaign, the launch of JDTB, and the negative effect of foreign exchange were offset by lower spend across the rest of our portfolio and the end of the Korbel relationship.
•SG&A expense was flat for the three months ended October 31, 2025, as lower compensation-and-benefit-related expenses following our restructuring initiative were offset by the negative effect of foreign exchange.
For the six months ended October 31, 2025, operating expenses totaled $602 million, an increase of $13 million, or 2%. The increase in operating expenses was primarily driven by (a) the impact of the restructuring initiative, (b) the absence of the prior-year franchise tax refund, (c) the absence of the prior-year gain on the sale of the Alabama cooperage, 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.
•Advertising expense decreased 2% for the six months ended October 31, 2025, as the increased investment for the new "That's What Makes Jack, JACK" global campaign, the launch of JDTB, and the negative effect of foreign exchange were more than offset by lower spend across the rest of our portfolio and the end of the Korbel relationship.
•SG&A expense decreased 3% for the six months ended October 31, 2025, driven by lower compensation-and-benefit-related expenses following our restructuring initiative, partially offset by the negative effect of foreign exchange.
|
Operating Income
|
|||||||||||
| Percentage change versus the prior year period ended October 31 | 3 Months | 6 Months | |||||||||
| Change in reported operating income | (10 | %) | (9 | %) | |||||||
| Acquisitions and divestitures | 3 | % | 3 | % | |||||||
|
Other items1
|
- | % | 1 | % | |||||||
| Foreign exchange | (2 | %) | 1 | % | |||||||
| Change in organic operating income | (9 | %) | (4 | %) | |||||||
| Note: Results may differ due to rounding | |||||||||||
1"Other items" includes "substitution drawback claims," "franchise tax refund," and "restructuring initiative." See "Non-GAAP Financial Measures" above for additional details.
For the three months ended October 31, 2025, operating income totaled $305 million, a decrease of $36 million, or 10%, compared to the same period last year. Operating margin decreased 1.7 percentage points to 29.4% from 31.1% in the same period last year driven by the decline in gross profit, partially offset by the positive effect of acquisitions and divestitures and the positive effect of foreign exchange.
For the six months ended October 31, 2025, operating income totaled $565 million, a decrease of $57 million, or 9%. Operating margin decreased 1.5 percentage points to 28.9% from 30.4% in the same period last year driven by (a) the decline in gross profit, (b) the impact of the restructuring initiative, (c) the absence of the prior-year franchise tax refund, and (d) the negative effect of foreign exchange. These declines were partially offset by the benefit of the substitution drawback claims, lower SG&A and advertising expenses, as well as the positive effect of acquisitions and divestitures.
The effective tax ratefor the three months ended October 31, 2025 was 20.2% compared to 17.6% for the same period last year. The increase in our effective tax rate was driven primarily by the unfavorable year-over-year impact of prior fiscal year true-ups, which was partially offset by lower state taxes.
The effective tax rate for the six months ended October 31, 2025 was 21.2% compared to 20.1% for the same period last year. The increase in our effective tax rate was driven primarily by the unfavorable year-over-year impact of prior fiscal year true-ups, which was partially offset by lower state taxes and the absence of valuation allowance increases in the current period compared to the prior period.
Diluted earnings per share of $0.47 for the three months ended October 31, 2025, decreased 14% from the $0.55 reported for the same period last year driven primarily by the decrease in operating income. Diluted earnings per share of $0.83 for the six months ended October 31, 2025, decreased 13% from the $0.96 reported for the same period last year driven by the decrease in operating income and an increase in non-operating postretirement expense.
Fiscal 2026 Outlook
Below we discuss our outlook for fiscal 2026, which reflects the trends, developments, and uncertainties (including those described above) that we expect to affect our business.
We continue to anticipate the operating environment for fiscal 2026 to be challenging, with low visibility due to macroeconomic and geopolitical volatility as we face headwinds from consumer uncertainty and lower non-branded sales of used barrels. We remain focused on building our business for the long term and navigating the current environment at pace with strategic initiatives in fiscal 2026 that we believe will unlock future growth led by the significant evolution of our U.S. distribution, the restructuring initiative, and meaningful new product innovation.
Accordingly, we reiterate the following expectation for fiscal 2026:
•Organic net sales decline in the low-single digit range.
•Organic operating income decline in the low-single digit range.
•Our effective tax rate to be in the range of approximately 21% to 23%.
The estimated capital expenditures range has been updated to $110 to $120 million from $125 to $135 million.
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 (A2 by Moody's, which was subsequently downgraded from A1 in November 2025, 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 $444 million at April 30, 2025, and $319 million at October 31, 2025. As of October 31, 2025, approximately 53% 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, 2025, and October 31, 2025. The average balances, interest rates, and original maturities during the periods ended October 31, 2024 and 2025, are presented below.
| Three Months Average | Six Months Average | |||||||||||||||||||||||||
| October 31, | October 31, | |||||||||||||||||||||||||
| (Dollars in millions) | 2024 | 2025 | 2024 | 2025 | ||||||||||||||||||||||
|
Average commercial paper (par amount)
|
$529 | $252 | $484 | $270 | ||||||||||||||||||||||
| Average interest rate | 5.34% | 4.47% | 5.41% | 4.55% | ||||||||||||||||||||||
| Average days to maturity at issuance | 40 | 24 | 35 | 27 | ||||||||||||||||||||||
Our commercial paper program is supported by available commitments under our $900 million bank credit facility that expires on May 26, 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 July 2026, dividend payments, share repurchases, 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 operating activities of $292 million during the six months ended October 31, 2025, increased $163 million from the same period last year, reflecting lower working capital requirements, partially offset by lower earnings.
Cash used for investing activities was $23 million during the six months ended October 31, 2025, compared to $21 million used for investing activities during the same period last year. The $2 million increase largely reflects an $18 million decrease in proceeds from cooperage asset sales ($51 million from the sale of our Alabama cooperage assets in May 2024; $33 million from the sale of our Brown-Forman Cooperage assets in May 2025), partially offset by a $16 million decline in capital expenditures.
Cash used for financing activities was $399 million during the six months ended October 31, 2025, compared to $129 million in cash used for financing activities during the same prior-year period. The $270 million increase largely reflects a $167 million increase in net repayments of short-term borrowings, a $99 million increase in share repurchases, and an $8 million increase in dividend payments.
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 2026.
Share repurchases. On October 1, 2025, the Board of Directors authorized the repurchase of up to $400 million (excluding brokerage fees and excise taxes) of outstanding shares of Class A and Class B common stock from October 1, 2025, through October 1, 2026 (the Repurchase Program), subject to market and other conditions. Under the Repurchase Program, we can repurchase shares of Class A and Class B common stock for cash in open market purchases, block transactions, purchases made in accordance with Rule 10b5-1 under the Exchange Act, and privately negotiated transactions, in accordance with applicable laws and regulations. The Repurchase Program does not obligate us to repurchase a minimum number of shares of common stock, and the Repurchase Program may be modified, suspended, or terminated by us at any time without prior notice.
Under the Repurchase Program, in October 2025, we repurchased 226,600 Class A shares at an average price of $27.86 per share and 3,292,906 Class B shares at an average price of $28.08 per share, for a total cost of $99 million. Subsequent to the end of the quarter through November 30, 2025, we repurchased 302,431 Class A shares at an average price of $27.50 per share, and 5,721,293 Class B shares at an average price of $27.74 per share, for a total cost of $167 million. As of November 30, 2025, approximately $134 million remained available under the program.
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