Brown-Forman Q3 Earnings: Is It Likely to Surpass Estimates?

Brown-Forman Corporation BF.B is slated to release third-quarter fiscal 2026 results on March 4. The alcoholic beverage bigwig’s revenues and earnings are expected to have declined year over year in the quarter under review. The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $999.7 million, indicating a decline of 3.4% from the year-ago quarter’s actual.

The consensus mark for earnings is pegged at 48 cents per share, indicating a decrease of 15.8% from the year-ago period’s reported number. Earnings estimates for the fiscal third quarter have been unchanged in the past 30 days.

In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 2.1%. In the trailing four quarters, BF.B delivered an earnings surprise of 0.7%, on average.

Brown-Forman Corporation Price and EPS Surprise

 

Brown-Forman Corporation price-eps-surprise | Brown-Forman Corporation Quote

Key Factors Likely to Affect BF.B’s Q3 Results

Brown-Forman has been grappling with a volatile and competitive operating landscape, owing to geopolitical uncertainties and global macroeconomic conditions. A tepid macroeconomic landscape, including softened consumer demand and dampened discretionary spending across key markets, has been weighing on Brown-Forman’s quarterly performance. The company has been witnessing lower volumes across brands and regions. Soft industry trends, led by the absence of the Finlandia and Sonoma-Cutrer brands, and the adverse impacts of currency, have been concerning.

Lower volumes of Jack Daniel’s Tennessee Whiskey, Herradura and Jack Daniel’s Tennessee Honey, and the conclusion of the Korbel relationship and the absence of the Sonoma-Cutrer prior-year TSA, have been acting as deterrents. Brown-Forman’s performance reflects cost pressures and evolving portfolio dynamics. 

Higher costs due mainly to inflation on input costs, and a reduction in production levels and an unfavorable price mix have been headwinds. Brown-Forman has been contending with consumer caution, the looming threat of tariffs and other related concerns. On its last reported quarter’s earnings call, management had expected organic operating expenses to continue reflecting investments in brands. The impacts of these trends are expected to be evident in the company’s results in the to-be-reported quarter.

On the flip side, Brown-Forman’s premiumization strategy, pricing efforts, global expansion and revenue-growth management initiatives appear encouraging. The company has been gaining traction from portfolio evolution and a global diversification strategy. Jack Daniel's and Coca-Cola RTD have been strong additions to the portfolio, reflecting progress on its commitment to the premiumization of its portfolio.

Strength in emerging markets has been a bright spot. The company integrated the two super-premium brands — Gin Mare and Diplomatico — in the Rest of the Portfolio category. These are likely to have aided BF.B’s performance in the to-be-reported quarter.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Brown-Forman this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Brown-Forman has an Earnings ESP of 0.00% and a Zacks Rank of 3 at present.

BF.B’s Valuation Picture & Price Performance

From a valuation perspective, Brown-Forman’s shares trade at a premium relative to the industry benchmarks. It has a forward 12-month price-to-earnings ratio of 16.56X, which is slightly lower than the Beverages - Alcohol industry’s average of 16.58X. The stock has a five-year high of 42.22X.

The recent market movements show that BF.B shares have lost 4.1% in the past three months against the industry's 17.2% growth.

Stocks With the Favorable Combination

Here are some companies, which, according to our model, have the right combination of elements to post an earnings beat:

Conagra Brands CAG currently has an Earnings ESP of +1.49% and a Zacks Rank of 3. The company is likely to register declines in its top and bottom lines when it reports third-quarter fiscal 2026 numbers. The Zacks Consensus Estimate for CAG’s quarterly revenues is pegged at $2.8 billion, which indicates a 2.6% rise from the prior-year quarter’s actual. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Conagra Brands’ quarterly earnings per share is pegged at 40 cents, indicating a 21.6% increase from that reported in the year-ago period. CAG has a trailing four-quarter earnings surprise of 3.4%, on average.

Colgate-Palmolive Company CL currently has an Earnings ESP of +0.26% and a Zacks Rank of 3. The company is likely to register growth in its top and bottom lines when it reports first-quarter 2026 numbers. The Zacks Consensus Estimate for Colgate’s quarterly revenues is pegged at $5.2 billion, which indicates growth of 5.6% from the prior-year quarter’s reported number.

The consensus estimate for Colgate’s quarterly earnings per share is pegged at 95 cents, suggesting 4.4% year-over-year growth. CL has a trailing four-quarter earnings surprise of 4%, on average.

Celsius CELH currently has an Earnings ESP of +2.91% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports first-quarter 2026 numbers. The Zacks Consensus Estimate for quarterly earnings per share is pegged at 27 cents, indicating a 50% jump from the year-ago period’s reported number.

The consensus estimate for Celsius’ quarterly revenues is pegged at $718.3 million, which implies an upsurge of 118.2% from the prior-year quarter’s actual. CELH has a trailing four-quarter earnings surprise of 45.3%, on average.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research