Sept 2 (Reuters) - Jack Daniel's Brown-Forman missed first-quarter sales estimates and stuck to its annual targets, joining other spirits makers in warning of a weak consumer environment in the United States and Europe.
U.S. consumers have become more discerning in their spending patterns as concerns about still-high inflation and jobs strain household budgets.
For alcohol makers, the slowdown has been reflected in lower drinking frequency as consumers focus more on health and calorie intake, and fewer
casual purchases, including bar visits and impulse buys at retailers. The growing use of GLP-1 weight-loss drugs has further reinforced those behaviors.
"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," Brown-Forman said in a statement.
The shift in consumption pattern has made conditions tougher for traditional spirits companies, which are increasingly relying on flavored products, ready-to-drink cocktails and other innovations to attract consumers. While such offerings appeal to consumers seeking convenience and value, they have yet to fully offset weaker demand across the broader spirits category.
Momentum from new mix, ready-to-drink portfolio and Jack Daniel's Tennessee Blackberry helped offset pressures elsewhere in the business, CEO Lawson Whiting said.
Brown-Forman posted quarterly sales decline of 1% to $911 million, compared with analysts' average estimate of $914.9 million, according to data compiled by LSEG. Its shares were largely unchanged in choppy premarket trading.
Net sales for the ready-to-drink portfolio increased 20%, while whiskey sales were flat.
The company earned 38 cents per share, narrowly beating the estimate of 37 cents.
It maintained annual organic net sales forecast of flat growth.
(Reporting by Shania S Thomas in Bengaluru; Editing by Shilpi Majumdar)
