June 4 (Reuters) - Whiskey maker Brown-Forman on Thursday warned of strained consumer spending behavior for the year even as the Jack Daniel's maker reported better-than-expected quarterly sales on the back of steady demand for premium spirits.
Shares of the Kentucky-based company rose 3% in morning trading after the company also forecast organic sales for fiscal 2027 to be flat, in line with fiscal 2026.
Brown-Forman's results, its first since rejecting Sazerac's $15-billion approach and ending separate
merger talks with Pernod Ricard, shift investor focus back to the company's underlying performance amid a tough demand environment for spirits.
Shares of the company, which also makes Tequila Herradura, were trading at $25.50, still below the intraday high of $28.46 in March when merger talks with Pernod first emerged.
The company is executing a restructuring plan it announced in 2025, which includes cost-control measures such as job cuts, at a time when spirits makers are battling a multi-year sales slump due to slowing demand and tariff pressures.
"We anticipate the operating environment for fiscal 2027 to remain challenging, as macroeconomic pressures and geopolitical instability continue to negatively impact consumer behavior and beverage alcohol consumption, particularly within developed markets," the company said in a statement, adding that it continues to expect "a challenging cost cycle in the year."
For the quarter ended April 30, the company's selling, general and administrative expenses rose about 34% to $259 million, driving its profit per share down 62% to 12 cents, well below analysts' estimates of 32 cents, according to data compiled by LSEG.
Still the company posted a 2% rise in fourth-quarter sales to $912 million, beating the average of analysts' estimates of $879.6 million, helped by strong demand for its premium offering, Jack Daniel’s Tennessee Blackberry whiskey.
(Reporting by Koyena Das in Bengaluru; Editing by Leroy Leo)
