Shares of alcohol giant Brown-Forman ($BF.B) are down 18% on June 5 after the maker of Jack Daniel’s whiskey reported disappointing financial results and warned of tariff risks and weak consumer spending.
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“While our results did not meet our long-term growth aspirations, we made important progress in an exceptionally challenging macroeconomic environment,” said CEO Lawson Whiting in the company’s earnings release.
Brown-Forman reported earnings per share (EPS) of $0.31, which was below the $0.34 estimated on Wall Street. Revenue in what was the company’s Fiscal fourth quarter totaled $894 million, which was also short of the $967.4 million expected among analysts.
Challenging Environment
While the company’s print came up short, it was management’s warnings related to tariffs and declining consumer spending that really sunk the stock. “We face headwinds from consumer uncertainty, the potential impact from currently unknown tariffs, and lower non-branded sales of used barrels,” said the company.
While Brown-Forman says it’s unable to measure potential tariff impacts, analysts at Bernstein estimate that a 50% tariff on U.S. whiskey sold in Europe would result in a 10% hit to the company’s earnings. In recent months, Canadian liquor stores have removed Jack Daniel’s products and other U.S. alcohol from store shelves in response to President Donald Trump’s tariffs.
BF.B stock has declined 28% this year.
Is BF.B Stock a Buy?
The stock of Brown-Forman has a consensus Hold rating among 12 Wall Street analysts. That rating is based on three Buy, seven Hold, and two Sell recommendations issued in the last three months. The average BF.B price target of $38.59 implies 42.08% upside from current levels.
