Brown-Forman Advances on Strong Brands and Premiumization

Brown-Forman Corporation’s BF.B progress is being driven by the strength of its core brands and a strategic shift toward premium and higher-value offerings. By focusing on well-established, globally recognized labels and expanding premium expressions, the company is reinforcing pricing power, supporting margins and prioritizing value-led growth.

Brown-Forman’s premiumization strategy centers on elevating its portfolio by prioritizing high-quality, premium brands to drive growth, strengthen margins and align with consumers’ increasing preference for upscale, authentic spirits. This strategy is gaining traction, as reflected in the continued growth of its premium and super-premium brands. 

The premium and super-premium portfolio is anchored by iconic brands such as Jack Daniel’s and Woodford Reserve. The Jack Daniel’s & Coca-Cola RTD has emerged as a strong portfolio addition, underscoring Brown-Forman’s progress in premiumizing through innovation and partnerships. Additionally, the successful integration of super-premium brands Gin Mare and Diplomático into the Rest of Portfolio category further enhances its premium positioning.

Brown-Forman has been seeing momentum across its Emerging markets for a while. Net sales in the Emerging markets increased 10% on a reported basis and 12% on an organic basis, backed by solid double-digit growth of New Mix, increased volumes across the Jack Daniel’s family of brands in Brazil and Türkiye, and an expected net increase in distributor inventories. The results also benefited from distributor inventory builds and solid consumer uptake in expanding middle-class markets.

Looking ahead, Brown-Forman remains committed to long-term growth through strategic actions in fiscal 2026. Enhancements to its U.S. distribution framework, cost and organizational restructuring, and sustained innovation should underpin growth and advance its premiumization strategy.

BF.B’s Price Performance, Valuation and Estimates

Brown-Forman shares have lost 9.9% in the past six months compared with the industry’s 5.2% drop.

From a valuation standpoint, BF.B trades at a forward price-to-earnings ratio of 15.74X compared with the industry’s average of 14.89X.

The Zacks Consensus Estimate for BF.B’s fiscal 2026 earnings per share (EPS) indicates a year-over-year decline of 9.2% while that of fiscal 2027 shows growth of 4.7%. The company’s EPS estimate for fiscal 2026 and fiscal 2027 has increased in the past 30 days.

Brown-Forman currently carries a Zacks Rank #3 (Hold).

Stocks to Consider in the Consumer Staples Space 

United Natural Foods UNFI is a key distributor of natural, organic and specialty food and non-food products. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

The Zacks Consensus Estimate for United Natural Foods' current financial-year sales and earnings indicates growth of 1.4% and 197.2%, respectively, from the prior-year levels. UNFI delivered a trailing four-quarter earnings surprise of 52.1%, on average.

Celsius Holdings, Inc. CELH, which specializes in nutritional functional foods, beverages and dietary supplements, starches and nutrition ingredients, currently carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for Celsius’ current financial-year earnings is expected to rise 77.1% from the corresponding year-ago reported figure. CELH delivered a trailing four-quarter earnings surprise of 42.9%, on average.

McCormick & Company MKC, which is a leading manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavors, currently carries a Zacks Rank of 2. MKC delivered a trailing four-quarter earnings surprise of 2.2%, on average. 

The Zacks Consensus Estimate for McCormick’s current financial-year earnings indicates growth of 2.2% from the year-ago number. 

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This article originally published on Zacks Investment Research (zacks.com).

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