Brown-Forman's Q1 Earnings on the Deck: Is a Beat in the Cards?

Brown-Forman Corporation BF.B is slated to release first-quarter fiscal 2027 results on Sept. 2. The alcoholic beverage bigwig’s earnings are expected to have increased. The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $921.2 million, indicating a drop of 0.3% from the year-ago quarter.

The consensus mark for earnings is pegged at 38 cents per share, indicating an increase of 5.6% from the year-ago period’s number. Earnings estimates for the fiscal first quarter have been unchanged in the past 30 days.

In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 63.6%. In the trailing four quarters, BF.B delivered a negative earnings surprise of 11.9%, on average.

Key Factors Likely to Affect BF.B’s Q1 Results

Brown-Forman has been benefiting from its premiumization strategy and strong brand investments. BF.B is advancing its pricing strategy, global expansion and revenue-growth management initiatives. The company is gaining traction from portfolio evolution, Jack Daniel's Country cocktail business model change and strong price mix.

Brown-Forman is focusing on expanding its geographic presence, strengthening its core brands, accelerating innovation and premiumization, and expanding its ready-to-drink portfolio. The company is also working to improve its route-to-consumer model, streamline operations and enhance cost efficiency. In international markets, Brown-Forman is increasing distribution and scale, particularly in Japan and other emerging markets. It continues to invest in key brands such as Jack Daniel’s, while using new products, pricing, revenue growth management and targeted marketing to drive organic growth. All such aforesaid efforts are likely to have aided the company’s performance in the quarter under review. The Zacks Consensus Estimate for Emerging markets’ revenues is pegged at $251 million for the quarter under review, up 12.1% year over year.

However, Brown-Forman has been grappling with a volatile operating landscape including geopolitical uncertainties and softening consumer demand. Consumer demand has remained muted across key markets, as inflationary pressures and cautious discretionary spending continue to weigh on premium alcohol purchases. 

The company’s results have also been pressured by portfolio-related headwinds, including the absence of Finlandia and Sonoma-Cutrer, the conclusion of the Korbel relationship and the lack of benefits from the prior-year Sonoma-Cutrer transition services agreement. Weaknesses in Jack Daniel’s Tennessee Whiskey, Herradura and Jack Daniel’s Tennessee Honey are expected to have further weighed on sales trends. These factors are expected to have hurt its first-quarter fiscal 2027 performance, with the company witnessing lower volumes across several brands and regions.

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 chances of an earnings beat. However, that’s not the case here. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Brown-Forman has an Earnings ESP of -1.09% and a Zacks Rank #4 (Sell) at present.

Valuation Picture of BF.B Stock

From a valuation perspective, Brown-Forman stock is trading at a premium relative to the industry benchmarks. It has a forward 12-month price-to-earnings of 16.54X, above the Beverages - Alcohol industry’s average of 15.05X.

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Brown-Forman shares have lost 2% in the past six months against the industry’s growth of 0.4%.

Stocks With the Favorable Combination

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

Sysco SYY currently has an Earnings ESP of +1.90% and a Zacks Rank of 3. The company is likely to register an increase in the top and bottom lines when it reports first-quarter fiscal 2027 numbers. The Zacks Consensus Estimate for quarterly earnings per share is pegged at $1.17, up 1.7% from the year-ago period. SYY has a trailing four-quarter earnings surprise of 1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Sysco’s quarterly revenues is pegged at $22.2 billion, which implies an increase of 4.8% from the prior-year quarter.

Constellation Brands STZ currently has an Earnings ESP of +0.09% and a Zacks Rank of 3. The company is likely to register a decline in its top and bottom lines when it reports second-quarter fiscal 2027 numbers. The Zacks Consensus Estimate for STZ’s quarterly revenues is pegged at $2.6 billion, which indicates a 3.7% rise from the prior-year quarter. 

The consensus estimate for Constellation Brands’ quarterly earnings per share is pegged at $3.63, remaining in line with the year-ago period. STZ has a trailing four-quarter earnings surprise of 9.6%, on average.

Simply Good Foods SMPL currently has an Earnings ESP of +0.02% and a Zacks Rank of 3. The company is likely to register declines in its top and bottom lines when it reports fourth-quarter fiscal 2026 numbers. The Zacks Consensus Estimate for Simply Good Foods’ quarterly revenues is pegged at $330.5 million, which indicates a decrease of 10.4% from the prior-year quarter.

The consensus estimate for Simply Good Foods’ quarterly earnings per share is pegged at 40 cents, down 13% year over year. SMPL has a trailing four-quarter earnings surprise of 9.2%, on average.

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

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