Jack Daniel's maker misses sales estimates on weak consumer spending

Traditional spirits companies are increasingly relying on flavored products, ready-to-drink cocktails and other innovations to attract consumers, particularly those who seek convenience and value.

While Brown-Forman's whiskey sales were flat, its ready-to-drink portfolio posted a 20% increase in net sales. The company earned 38 cents per share, slightly above the estimate of 37 cents.

Quarterly gross margin expanded 40 basis points, driven by lower costs, especially in advertising, and the end of its long-running sales and distribution relationship with Korbel California Champagnes.

Its shares rose about 4%.

Consumers have become more discerning in their spending as concerns about inflation and jobs tighten household budgets. For alcohol makers, that has translated into lower consumption levels as health-conscious consumers watch their calorie intake amid growing use of GLP-1 drugs, and fewer casual purchases.

Brown-Forman said: "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, the maker of Jack Daniel's, missed first-quarter sales estimates on Wednesday and stuck to its annual targets, joining other spirits makers in warning of a challenging consumer environment in the U.S. and Europe.

The company's quarterly sales declined 1% to , below analysts' average estimate of , according to data compiled by LSEG.