Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis in conjunction with both our unaudited Condensed Consolidated Financial Statements and related notes included in Part I, Item 1 of this Quarterly Report and our Annual Report on Form 10-K for the fiscal year ended April 30, 2025 (2025 Form 10-K). Note that the results of operations for the nine months ended January 31, 2026, are not necessarily indicative of future or annual results. In this Item, “we,” “us,” “our,” “Brown-Forman,” and the “Company” refer to Brown-Forman Corporation and its consolidated subsidiaries, collectively.

Presentation Basis

Non-GAAP Financial Measures

We report our financial results in accordance with U.S. generally accepted accounting principles (GAAP). Additionally, we use some financial measures in this report that are not measures of financial performance under GAAP. These non-GAAP measures, defined below, should be viewed as supplements to (not substitutes for) our results of operations and other measures reported under GAAP. Other companies may define or calculate these non-GAAP measures differently.

“Organic change” in measures of statements of operations. We present changes in certain measures, or line items, of the statements of operations that are adjusted to an “organic” basis. We use “organic change” for the following measures: (a) organic net sales; (b) organic cost of sales; (c) organic gross profit; (d) organic advertising expenses; (e) organic selling, general, and administrative (SG&A) expenses; (f) organic other expense (income), net; (g) organic operating expenses1; and (h) organic operating income. To calculate these measures, we adjust, as applicable, for (1) acquisitions and divestitures, (2) other items, and (3) foreign exchange. We explain these adjustments below.

• “Acquisitions and divestitures.” This adjustment removes (a) the gain or loss recognized on sale of divested brands and certain assets, (b) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction, transition, and integration costs), (c) the effects of operating activity related to acquired and divested brands, including certain divested agency brands, for periods not comparable year over year (non-comparable periods), and (d) fair value changes to contingent consideration liabilities. Excluding non-comparable periods allows us to include the effects of acquired and divested brands only to the extent that results are comparable year over year. For the first, second, and third quarters of fiscal 2026, we had the following acquisitions and divestitures adjustments:

During fiscal 2023, we acquired Gin Mare Brand, S.L.U. and Mareliquid Vantguard, S.L.U., which owned the Gin Mare brand (Gin Mare). This adjustment removes the fair value adjustments to Gin Mare’s contingent consideration liability that is payable in cash no later than July 2027 from our other expense (income), net and operating income.

During fiscal 2024, we sold our Finlandia vodka and Sonoma-Cutrer wine businesses and entered into related transition services agreements (TSAs) for these businesses. This adjustment removes the net sales, cost of sales, operating expenses, and operating income recognized pursuant to the TSAs related to distribution services in certain markets for the non-comparable period, which is activity from the first, second, and third quarters of fiscal 2025.

During the first quarter of fiscal 2025, we recognized a gain of $12 million on the sale of the Alabama cooperage. This adjustment removes the gain from our other expense (income), net and operating income.

During the first quarter of fiscal 2026, we ended our sales, marketing, and distribution relationship with Korbel Champagne Cellars (Korbel relationship), effective June 30, 2025. This adjustment removes the net sales, cost of sales, operating expenses, and operating income for the non-comparable period, which is July through January of fiscal 2025 and fiscal 2026.

• “Other items.” Other items include the additional items outlined below.

“Franchise tax refund.” During the first quarter of fiscal 2025, we recognized a $13 million franchise tax refund due to a change in franchise tax calculation methodology for the state of Tennessee. This modification lowered our annual franchise tax obligation and was retroactively applied to franchise taxes paid during fiscal 2020 through fiscal 2023. This adjustment removes the franchise tax refund from our other expense (income), net and operating income.

“Restructuring initiative.” During the third quarter of fiscal 2025, our Board of Directors approved a plan to reduce our structural cost base and realign resources toward future sources of growth. This included reducing our workforce by approximately 12% and closing the Louisville-based Brown-Forman Cooperage. We also offered a special, one-time early retirement benefit to qualifying U.S. employees. During the first nine months of fiscal 2026, we incurred

1Operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.

$19 million in restructuring and other charges associated with this initiative and completed the sale of the Brown-Forman Cooperage facility and related assets. Comparatively, we incurred $33 million in related restructuring and other charges in the second and third quarters of fiscal 2025. This adjustment removes the restructuring initiative impact from our operating expenses and operating income for the second and third quarters of fiscal 2025 and the first nine months of fiscal 2026. See Note 6 to the Condensed Consolidated Financial Statements for more information.

“Substitution drawback claims.” During the first quarter of fiscal 2026, we recognized a net benefit of $18 million related to the collection of substitution drawback claims filed with the U.S. Government between fiscal 2016 and 2019. As of the first quarter of fiscal 2026, all claims have been collected. This adjustment removes the benefit from our other expense (income), net and operating income.

• “Foreign exchange.” We calculate the percentage change in certain line items of the statements of operations in accordance with GAAP and adjust to exclude the cost or benefit of currency fluctuations. Adjusting for foreign exchange allows us to understand our business on a constant-dollar basis, as fluctuations in exchange rates can distort the organic trend both positively and negatively. (In this report, “dollar” means the U.S. dollar unless stated otherwise.) To eliminate the effect of foreign exchange fluctuations when comparing across periods, we translate current-year results at prior-year rates and remove transactional and hedging foreign exchange gains and losses from current- and prior-year periods.

We use the non-GAAP measure “organic change,” along with other metrics, to: (a) understand our performance from period to period on a consistent basis; (b) compare our performance to that of our competitors; (c) calculate components of management incentive compensation; (d) plan and forecast; and (e) communicate our financial performance to the Board of Directors, stockholders, and investment community. We provide reconciliations of the “organic change” in certain line items of the statements of operations to their nearest GAAP measures in the tables under “Results of Operations - Fiscal 2026 Year-to-Date Highlights” and “Results of Operations - Year-Over-Year Period Comparisons.” We have consistently applied the adjustments within our reconciliations in arriving at each non-GAAP measure. We believe these non-GAAP measures are useful to readers and investors because they enhance the understanding of our historical financial performance and comparability between periods. When we provide guidance for organic change in certain measures of the statements of operations we do not provide guidance for the corresponding GAAP change, as the GAAP measure will include items that are difficult to quantify or predict with reasonable certainty, such as foreign exchange, which could have a significant impact to our GAAP income statement measures.

Definitions

Aggregations.

From time to time, to explain our results of operations or to highlight trends and uncertainties affecting our business, we aggregate markets according to stage of economic development as defined by the International Monetary Fund (IMF), and we aggregate brands by beverage alcohol category. Below, we define the geographic and brand aggregations used in this report.

Geographic Aggregations.

In “Results of Operations - Fiscal 2026 Year-to-Date Highlights,” we provide supplemental information for our top markets ranked by percentage of net sales. In addition to markets listed by country name, we include the following aggregations:

•**“Developed International” markets are “advanced economies” as defined by the IMF, excluding the United States. Our top developed international markets were Germany, Australia, the United Kingdom, France, and Canada. This aggregation represents our net sales of branded products to these markets.

• “Emerging” markets are “emerging and developing economies” as defined by the IMF. Our top emerging markets were Mexico, Poland, Brazil, and Türkiye. This aggregation represents our net sales of branded products to these markets.

• “Brazil” includes Brazil, Paraguay, Uruguay, and certain other surrounding territories.

•**“Travel Retail” represents our net sales of branded products to global duty-free customers, other travel retail customers, and the U.S. military, regardless of customer location.

•**“Non-branded and bulk” includes net sales of used barrels, contract bottling services, and non-branded bulk whiskey, regardless of customer location.

Brand Aggregations.

In “Results of Operations - Fiscal 2026 Year-to-Date Highlights,” we provide supplemental information for our top brands ranked by percentage of net sales. In addition to brands listed by name, we include the following aggregations outlined below.

•**“Whiskey” includes all whiskey spirits and whiskey-based flavored liqueurs. The brands included in this category are the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below), the Woodford Reserve family of brands (Woodford Reserve), the Old Forester family of brands (Old Forester), The Glendronach, Benriach, Glenglassaugh, and Slane Irish Whiskey.

•**“American whiskey” includes the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below), Woodford Reserve, and Old Forester.

•**“Super-premium American whiskey” includes Woodford Reserve, Gentleman Jack, and other super-premium Jack Daniel’s expressions.

•**“Ready-to-Drink” includes all ready-to-drink (RTD) and ready-to-pour (RTP) products. The brands included in this category are Jack Daniel’s RTD and RTP products (JD RTD/RTP), New Mix, and other RTD/RTP products.

•**“Jack Daniel’s RTD/RTP” products include all RTD line extensions of Jack Daniel’s, such as Jack Daniel’s & Coca-Cola RTD, Jack Daniel’s & Cola, Jack Daniel’s Double Jack, Jack Daniel’s Country Cocktails (JDCC)1, and other malt- and spirit-based Jack Daniel’s RTDs, along with Jack Daniel’s Winter Jack RTP.

• “Jack Daniel’s & Coca-Cola RTD” includes all Jack Daniel’s & Coca-Cola RTD products and Jack Daniel’s bulk whiskey shipments for the production of these products.

•**“Tequila” includes el Jimador, the Herradura family of brands (Herradura), and other tequilas.

• “Rest of Portfolio” includes Korbel California Champagnes2, Diplomático, Chambord, Gin Mare, Sonoma-Cutrer (which was divested on April 30, 2024), Finlandia Vodka (which was divested on November 1, 2023), Korbel Brandy2, Fords Gin, and other agency brands (brands we do not own, but sell in certain markets).

•**“Non-branded and bulk” includes net sales of used barrels, contract bottling services, and non-branded bulk whiskey.

• “Jack Daniel’s family of brands” includes Jack Daniel’s Tennessee Whiskey (JDTW), JD RTD/RTP, Jack Daniel’s Tennessee Honey (JDTH), Gentleman Jack, Jack Daniel’s Tennessee Apple (JDTA), Jack Daniel’s Tennessee Blackberry (JDTB), Jack Daniel’s Tennessee Fire (JDTF), Jack Daniel’s Single Barrel Collection (JDSB), Jack Daniel’s Bonded Tennessee Whiskey, Jack Daniel’s Sinatra Select, Jack Daniel’s Bonded Rye Tennessee Whiskey, Jack Daniel’s American Single Malt, Jack Daniel’s Triple Mash Blended Straight Whiskey, Jack Daniel’s 10 Year Old, Jack Daniel’s 14 Year Old, Jack Daniel’s 12 Year Old, and other Jack Daniel’s expressions.

Other Metrics.

• “Shipments.” We generally record revenues when we ship or deliver our products to our customers. In this report, unless otherwise specified, we refer to shipments when discussing volume.

•**“Depletions.” This metric is commonly used in the beverage alcohol industry to describe volume. Depending on the context, depletions usually means either (a) where Brown-Forman is the distributor, shipments directly to retail or wholesale customers or (b) where Brown-Forman is not the distributor, shipments from distributor customers to retailers and wholesalers. We believe that depletions measure volume in a way that more closely reflects consumer demand than our shipments to distributor customers do.

• “Consumer takeaway.” When discussing trends in the market, we refer to consumer takeaway, a term commonly used in the beverage alcohol industry that refers to the purchase of product by consumers from retail outlets, including products purchased through e-commerce channels, as measured by volume or retail sales value. This information is provided by outside parties, such as Nielsen and the National Alcohol Beverage Control Association (NABCA). Our estimates of

1As announced on March 2, 2026, we agreed to conclude our relationship with Pabst Brewing Company for flavored malt beverages within the United States. We will assume management of the supply, sales, marketing, and distribution of JDCC, effective July 7, 2026.

2Ended the Korbel relationship effective June 30, 2025.

market share or changes in market share are derived from consumer takeaway data using the retail sales value metric. We believe consumer takeaway is a leading indicator of consumer demand trends.

• “Estimated net change in distributor inventories.” We generally recognize revenue when our products are shipped or delivered to customers. In the United States and certain other markets, our customers are distributors that sell downstream to retailers and consumers. We believe that our distributors’ downstream sales more closely reflect actual consumer demand than do our shipments to distributors. Our shipments increase distributors’ inventories, while distributors’ depletions (as described above) reduce their inventories. Therefore, it is possible that our shipments do not coincide with distributors’ downstream depletions and merely reflect changes in distributors’ inventories. Because changes in distributors’ inventories could affect our trends, we believe it is useful for investors to understand those changes in the context of our operating results.

We perform the following calculation to determine the “estimated net change in distributor inventories”:

• For both the current-year period and the comparable prior-year period, we calculate a “depletion-based” amount by (a) dividing the organic dollar amount (e.g. organic net sales) by the corresponding shipment volumes to arrive at a shipment per case amount, and (b) multiplying the resulting shipment per case amount by the corresponding depletion volumes. We subtract the year-over-year percentage change of the “depletion-based” amount from the year-over-year percentage change of the organic amount to calculate the “estimated net change in distributor inventories.”

• A positive difference is interpreted as a net increase in distributors’ inventories, which implies that organic trends could decrease as distributors reduce inventories; whereas, a negative difference is interpreted as a net decrease in distributors’ inventories, which implies that organic trends could increase as distributors rebuild inventories.

Important Information on Forward-Looking Statements:

This report contains statements, estimates, and projections that are “forward-looking statements” as defined under U.S. federal securities laws. Words such as “aim,” “ambition,” “anticipate,” “aspire,” “believe,” “can,” “continue,” “could,” “envision,” “estimate,” “expect,” “expectation,” “intend,” “may,” “might,” “plan,” “potential,” “project,” “pursue,” “see,” “seek,” “should,” “will,” “would,” and similar words indicate forward-looking statements, which speak only as of the date we make them. Except as required by law, we do not intend to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from those expressed in or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to:

• Our substantial dependence upon the continued growth of the Jack Daniel’s family of brands

• Substantial competition from new entrants, consolidations by competitors and retailers, and other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free goods), marketing, category expansion, product introductions, or entry or expansion in our geographic markets or distribution networks

• Disruption of our distribution network or inventory fluctuations in our products by distributors, wholesalers, or retailers

• Risks from changes to the trade policies, tariffs and import and export regulations of the U.S. or foreign governments and the effectiveness of our actions to mitigate the negative impact on our margins, sales, and/or distributors

• Changes in consumer preferences, consumption, or purchase patterns – particularly away from larger producers in favor of small distilleries or local producers, or away from brown spirits, our premium products, or spirits generally, and our ability to anticipate or react to them; further legalization of cannabis, hemp-derived products or other similar products; bar, restaurant, travel, or other on-premise declines; shifts in demographic or health and wellness trends; or unfavorable consumer reaction to new products, line extensions, package changes, product reformulations, or other product innovation

• Route-to-consumer changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, or result in higher fixed costs

• Production facility, aging warehouse, or supply chain disruption

• Imprecision in supply/demand forecasting

• Higher costs, lower quality, or unavailability of energy, water, raw materials, product ingredients, or labor

• Risks associated with acquisitions, dispositions, business partnerships, or investments – such as acquisition integration, termination difficulties or costs, or impairment in recorded value

• Unfavorable global or regional economic conditions and related economic slowdowns or recessions, low consumer confidence, high unemployment, weak credit or capital markets, budget deficits, burdensome government debt, austerity measures, higher interest rates, higher taxes, political instability, higher inflation, deflation, lower returns on pension assets, or lower discount rates for pension obligations

• Impact of health epidemics and pandemics, and the risk of the resulting negative economic impacts and related governmental actions

• Product recalls or other product liability claims, product tampering, contamination, or quality issues

• Negative publicity related to our company, products, brands, marketing, executive leadership, employees, Board of Directors, family stockholders, operations, business performance, or prospects

• Failure to attract or retain key executive or employee talent

• Risks associated with being a U.S.-based company with a global business, including commercial, political, and financial risks; local labor policies and conditions; compliance with local trade practices and other regulations; terrorism, kidnapping, extortion, or other types of violence; and health pandemics

• Failure to comply with anti-corruption laws, trade sanctions and restrictions, or similar laws or regulations

• Fluctuations in foreign currency exchange rates, particularly due to a stronger U.S. dollar

• Changes in laws, regulatory measures, or governmental policies, especially those affecting production, importation, marketing, labeling, pricing, distribution, sale, or consumption of our beverage alcohol products

• Tax rate changes (including excise, corporate, sales or value-added taxes, property taxes, payroll taxes, import and export duties, and tariffs) or changes in related reserves, changes in tax rules or accounting standards, and the unpredictability and suddenness with which they can occur

• Decline in the social acceptability of beverage alcohol in significant markets

• Significant additional labeling or warning requirements or limitations on availability of our beverage alcohol products

• Counterfeiting and inadequate protection of our intellectual property rights

• Significant legal disputes and proceedings, or government investigations

• Cyber breach or failure or corruption of our key information technology systems or those of our suppliers, customers, or direct and indirect business partners, or failure to comply with personal data protection laws

• Our status as a family “controlled company” under New York Stock Exchange rules, and our dual-class share structure

For further information on these and other risks, please see the risks and uncertainties described in Part I, Item 1A. Risk Factors of our 2025 Form 10-K, and those described from time to time in our reports on Form 10-Q filed with the SEC.

Overview

Unless otherwise indicated, all related commentary is on a reported basis and is for the nine months ended January 31, 2026, compared to the same period last year.

Divestitures

During the fourth quarter of fiscal 2024, we sold the Sonoma-Cutrer wine business and entered into a TSA, which ended in August 2024. The absence of this brand negatively impacted our net sales and operating income, though positively impacted our gross margin for the nine months ended January 31, 2026.

During the first quarter of fiscal 2026, we ended the Korbel relationship, effective June 30, 2025. The absence of this brand negatively impacted our net sales and operating income, though positively impacted our gross margin for the three months and nine months ended January 31, 2026.

Restructuring Initiative

During the third quarter of fiscal 2025, our Board of Directors approved a plan to reduce our structural cost base and realign resources toward future sources of growth. This included reducing our workforce by approximately 12% and closing the Louisville-based Brown-Forman Cooperage. We also offered a special, one-time early retirement benefit to qualifying U.S. employees. During the first nine months of fiscal 2026, we incurred additional restructuring charges associated with this initiative and completed the sale of the Brown-Forman Cooperage facility and related assets. While these actions negatively impacted our operating expenses and operating income for the three months and nine months ended January 31, 2026, we benefitted from lower restructuring costs when compared to the same prior-year period. See Note 6 to the Condensed Consolidated Financial Statements for more information.

United States Distributor Evolution

During the first half of fiscal 2026, we transitioned our portfolio distribution in the state of California, effective May 1, 2025, and in 13 additional markets across the United States, effective August 1, 2025. In the third quarter of fiscal 2026, net sales were positively impacted by the timing of distributor ordering patterns in our transition markets. Additionally, our net sales for the three and nine months ended January 31, 2026, benefited from higher net pricing across the portfolio as a result of changes to our distributor relationship terms.

Fiscal 2026 Year-to-Date Highlights

During the nine months ended January 31, 2026, the operating environment remained challenging due to ongoing macroeconomic and geopolitical uncertainties, which we believe negatively impacted consumer confidence and reduced discretionary spending in many of our top markets.

• We delivered net sales of $3.0 billion for the nine months ended January 31, 2026, a decrease of 2%. The decrease was driven by the negative effect of acquisitions and divestitures and unfavorable portfolio mix, partially offset by higher volumes and the positive effect of foreign exchange.

**◦**From a brand perspective, net sales declines were driven by the end of the Korbel relationship and the absence of the Sonoma-Cutrer prior-year TSA, as well as lower sales of used barrels and JDTW, partially offset by the launch of JDTB and growth of New Mix.

◦From a geographic perspective, the declines in net sales in the United States and developed international markets were partially offset by growth in emerging markets and Travel Retail.

*•*We delivered gross profit of $1.8 billion for the nine months ended January 31, 2026, a decrease of 1%. Gross margin increased 0.5 percentage points to 59.9% from 59.4% in the same period last year. The increase in gross margin was driven by the positive effect of acquisitions and divestitures and the positive effect of foreign exchange, partially offset by higher costs and unfavorable price/mix.

*•*We delivered operating income of $905 million for the nine months ended January 31, 2026. Operating margin increased 0.7 percentage points to 30.0% from 29.3% in the same period last year. The increase was driven by (a) the benefit of the substitution drawback claims, (b) the impact of lower restructuring initiative costs, (c) lower SG&A and advertising expenses, (d) the positive effect of acquisitions and divestitures, and (e) the positive effect of foreign exchange. These increases were partially offset by the decline in gross profit and the absence of the prior-year franchise tax refund.

• We delivered diluted earnings per share of $1.41 for the nine months ended January 31, 2026, a decrease of 8% from the $1.53 reported for the same period last year, driven by the absence of gain on sale of our investment in Duckhorn and an increase in non-operating postretirement expense, partially offset by lower interest expense, net.

Summary of Operating Performance
			Three Months Ended January 31,																											Nine Months Ended January 31,
(Dollars in millions)			2025						2026									Reported Change						Organic Change****1									2025						2026									Reported Change						Organic Change****1
Net sales			$	1,035					$	1,056								2		%				1		%							$	3,081					$	3,016								(2		%)				—		%
Cost of sales			416						416									—		%				3		%							1,251						1,209									(3		%)				3		%
Gross profit			619						640									4		%				(1		%)							1,830						1,807									(1		%)				(2		%)
Advertising			125						120									(4		%)				(5		%)							377						366									(3		%)				(2		%)
SG&A			178						184									3		%				—		%							551						548									(1		%)				(2		%)
Restructuring and other charges			31						3									(91		%)				nm4									33						19									(45		%)				nm4
Other expense (income), net			5						(7)									nm4						nm4									(33)						(31)									nm4						nm4
Operating income			280						340									21		%				—		%							902						905									—		%				(3		%)
Total operating expenses**2			$	339					$	300								(11		%)				(2		%)							$	928					$	902								(3		%)				(2		%)
As a percentage of net sales**3
Gross profit			59.8		%				60.6		%							0.9		pp													59.4		%				59.9		%							0.5		pp
Operating income			27.1		%				32.1		%							5.0		pp													29.3		%				30.0		%							0.7		pp
Non-operating postretirement expense			$	3					$	3								nm4															$	4					$	25								nm4
Interest expense, net			$	26					$	22								(14		%)													$	83					$	66								(21		%)
Effective tax rate			18.7		%				14.9		%							(3.8)		pp													19.5		%				18.7		%							(0.8)		pp
Diluted earnings per share			$	0.57					$	0.58								1		%													$	1.53					$	1.41								(8		%)
Note: Totals may differ due to rounding

1See “Non-GAAP Financial Measures” above for details on our use of “organic change,” including how we calculate these measures and why we believe this information is useful to readers.

2Operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.

3Year-over-year changes in percentages are reported in percentage points (pp).

4Percentage change is not meaningful.

Results of Operations – Fiscal 2026 Year-to-Date Highlights

Market Highlights

The following table provides supplemental information for our largest markets. We discuss results of the markets most affecting our performance below the table. Unless otherwise indicated, all related commentary is on a reported basis and is for the nine months ended January 31, 2026, compared to the same period last year.

Top Markets
Nine months ended January 31, 2026			Net Sales % Change vs. Prior Year Period
Geographic area****1			Reported			Acquisitions and Divestitures						Foreign Exchange						Organic****2
United States			(8		%)	7		%				—		%				(1		%)
Developed International			(2		%)	—		%				(4		%)				(6		%)
Germany			(1		%)	—		%				(6		%)				(7		%)
Australia			(2		%)	—		%				1		%				(1		%)
United Kingdom			(6		%)	—		%				(4		%)				(10		%)
France			(1		%)	—		%				(6		%)				(7		%)
Canada			(60		%)	1		%				—		%				(59		%)
Rest of Developed International			8		%	—		%				(5		%)				3		%
Emerging			16		%	1		%				(2		%)				15		%
Mexico			19		%	—		%				(4		%)				15		%
Poland			9		%	6		%				(11		%)				4		%
Brazil			23		%	—		%				(2		%)				22		%
Türkiye			(7		%)	—		%				24		%				18		%
Rest of Emerging			18		%	1		%				(3		%)				16		%
Travel Retail			9		%	—		%				(2		%)				7		%
Non-branded and bulk			(64		%)	—		%				—		%				(64		%)
Total			(2		%)	4		%				(2		%)				—		%
Note: Results may differ due to rounding

1See “Definitions” above for definitions of market aggregations presented here.

2See “Non-GAAP Financial Measures” above for details on our use of “organic change” in net sales, including how we calculate this measure and why we believe this information is useful to readers.

The United States’ net sales declined 8% driven by the end of the Korbel relationship and the absence of the Sonoma-Cutrer prior-year TSA, as well as lower volumes, led by JDTW, Herradura, and JDTH. These declines were partially offset by (a) new product launches, including JDTB, Jack Daniel’s Single Barrel Heritage Barrel, and New Mix, (b) higher net pricing across the portfolio as a result of changes to our distributor relationship terms, and (c) higher volumes of Woodford Reserve due to timing of distributor ordering patterns in our transition markets.

Developed International

• In a challenging economic environment, Germany’s net sales declined 1% driven by lower volumes of JDTW, unfavorable timing of retailer ordering patterns, and lower net pricing of JD RTD/RTP products. These declines were partially offset by the positive effect of foreign exchange and the launch of JDTB.

• Australia’s** net sales declined 2% driven by the negative effect of foreign exchange and lower volumes of JD RTD/RTP products.

• The United Kingdom’s net sales declined 6% led by JDTW and JDTH declines reflecting soft consumer demand for the whiskey category impacted by macroeconomic and geopolitical uncertainty, as well as the absence of wholesaler and retailer purchases from the prior-year period. These declines were partially offset by the positive effect of foreign exchange and the launch of JDTB.

• France’s net sales declined 1% driven by lower volumes of JDTW and Diplomático, partially offset by the positive effect of foreign exchange and the launch of JDTB.

• Canada’s** net sales declined 60% driven by volumetric declines of our American whiskey portfolio and JD RTD/RTP products due to the continued absence of American-made beverage alcohol from retail shelves in most of its provinces.

• Net sales in the Rest of Developed International increased 8% driven by the positive effect of foreign exchange, growth in Italy due to the transition to owned distribution, and the distribution of new agency brands in Japan. These increases were partially offset by lower volumes of JDTW in the rest of Europe.

Emerging

• Mexico’s net sales increased 19% driven by higher volumes and prices of New Mix, the positive effect of foreign exchange, and the distribution of new agency brands.

• Poland’s** net sales increased 9% driven by the positive effect of foreign exchange, growth of JDTW due to increased consumer-led demand, and the launch of JDTB. This growth was partially offset by the absence of the Finlandia prior-year TSA.

• Brazil’s net sales increased 23% driven by higher volumes of JDTA and JDTW, reflecting continued distribution expansion and favorable timing of retailer ordering patterns.

• Türkiye’s** net sales declined 7% driven by the negative effect of foreign exchange, partially offset by higher prices in response to inflation and volumetric gains of JDTW.

• Net sales in the Rest of Emerging increased 18%, due to broad-based volume gains of the Jack Daniel’s family of brands, led by the rest of Latin America and the United Arab Emirates, reflecting an estimated net increase in distributor inventories, as well as the positive effect of foreign exchange.

Travel Retail’s net sales increased 9% due to higher volumes of JDTW, the favorable timing of ordering patterns, and the positive effect of foreign exchange.

Non-branded and bulk’s net sales decreased 64% driven by the decline of used barrel sales as demand and pricing adjusted to levels that reflect the current challenging and uncertain operating environment for our industry.

Brand Highlights

The following table provides supplemental information for our largest brands. We discuss results of the brands most affecting our performance below the table. Unless otherwise indicated, all related commentary is on a reported basis and is for the nine months ended January 31, 2026, compared to the same period last year.

Major Brands
Nine months ended January 31, 2026									Net Sales % Change vs. Prior Year Period
Product category / brand family / brand****1									Reported			Acquisitions and Divestitures						Foreign Exchange						Organic****2
Whiskey									2		%	—		%				(1		%)				1		%
JDTW									(2		%)	—		%				(2		%)				(3		%)
JDTH									(3		%)	—		%				(2		%)				(5		%)
Gentleman Jack									1		%	—		%				(1		%)				—		%
JDTA									18		%	—		%				(3		%)				15		%
JDTF									(7		%)	—		%				(1		%)				(8		%)
Woodford Reserve									3		%	—		%				—		%				2		%
Old Forester									2		%	—		%				—		%				2		%
Rest of Whiskey									53		%	—		%				(1		%)				51		%
Ready-to-Drink									8		%	—		%				(2		%)				6		%
JD RTD/RTP									(3		%)	—		%				(2		%)				(5		%)
New Mix									37		%	—		%				(4		%)				34		%
Tequila									(6		%)	—		%				(1		%)				(7		%)
el Jimador									(3		%)	—		%				(1		%)				(4		%)
Herradura									(11		%)	—		%				(1		%)				(12		%)
Rest of Portfolio									(34		%)	55		%				(4		%)				16		%
Non-branded and bulk									(64		%)	—		%				—		%				(64		%)
Note: Results may differ due to rounding

1See “Definitions” above for definitions of brand aggregations presented here.

2See “Non-GAAP Financial Measures” above for details on our use of “organic change” in net sales, including how we calculate this measure and why we believe this information is useful to readers.

Whiskey

• Net sales for JDTW declined 2% driven by lower volumes in our developed international markets, led by Germany and Canada, as well as the United States. These declines were partially offset by broad-based growth across our emerging markets, led by Türkiye and Brazil, as well as the positive effect of foreign exchange. An estimated net increase in distributor inventories in our emerging markets, led by the United Arab Emirates, positively impacted net sales.

• Net sales for JDTH declined 3% driven by lower volumes in the United States, partially offset by the positive effect of foreign exchange.

• Net sales for Gentleman Jack increased 1% driven by the positive effect of foreign exchange. In addition, lower volumes in the United States were offset by higher volumes in Poland.

• Net sales for JDTA increased 18% driven by growth in Brazil due to the continued distribution expansion and favorable timing of retailer ordering patterns, as well as the positive effect of foreign exchange.

• Net sales for JDTF declined 7% driven by lower volumes in the United States, partially offset by the positive effect of foreign exchange.

• Woodford Reserve’s net sales increased 3% driven by the United States, which benefited from higher net pricing related to the distributor transitions and an estimated net increase in distributor inventories, partially offset by the continued absence of American-made beverage alcohol from retail shelves in most Canadian provinces.

• Old Forester’s net sales increased 2% driven by the United States due to timing of the distributor ordering patterns in our transition markets.

• Net sales for Rest of Whiskey increased 53% driven by new products launches, including JDTB, which benefited from an estimated net increase in distributor inventories, and Jack Daniel’s Single Barrel Heritage Barrel in the United States. Growth of The GlenDronach in our developed international markets also contributed to the increase. These gains were partially offset by lower volumes of the rest of other super-premium Jack Daniel’s expressions and Glenglassaugh.

Ready-to-Drink

• Net sales for the JD RTD/RTP brands declined 3% driven by lower volumes in Canada due to the continued absence of American-made beverage alcohol from retail shelves in most of its provinces, lower volumes in the United States, and declines in Germany. These declines were partially offset by the positive effect of foreign exchange.

• New Mix’s net sales increased 37% driven by strong growth in Mexico with market share gains in a growing category.

Tequila

• el Jimador’s net sales decreased 3% driven by declines in the United States and Mexico, partially offset by higher volumes in the rest of Latin America and the positive effect of foreign exchange. An estimated net increase in distributor inventories, led by the United States, positively impacted net sales.

• Herradura’s net sales declined 11% driven by lower volumes in the United States.

Net sales for Rest of Portfolio declined 34% driven by the end of the Korbel relationship and the absence of Sonoma-Cutrer and Finlandia prior-year TSAs. These declines were partially offset by the distribution of new agency brands in Japan and Mexico, growth of Gin Mare and Diplomático in Italy, and the positive effect of foreign exchange.

Non-branded and bulk’s net sales decreased 64% driven by the decline of used barrel sales as demand and pricing adjusted to levels that reflect the current challenging and uncertain operating environment for our industry.

Year-Over-Year Period Comparisons

Net Sales
			3 Months															9 Months
Percentage change versus the prior year period ended January 31			Volume			Price/mix			Total									Volume			Price/mix			Total
Change in reported net sales			3		%	(1		%)	2		%							2		%	(4		%)	(2		%)
Acquisitions and divestitures			3		%	—		%	3		%							3		%	—		%	4		%
Foreign exchange			—		%	(4		%)	(4		%)							—		%	(2		%)	(2		%)
Change in organic net sales			6		%	(5		%)	1		%							5		%	(5		%)	—		%
Note: Results may differ due to rounding

For the three months ended January 31, 2026, net sales were $1.1 billion, an increase of $21 million, or 2%, driven by higher volumes, partially offset by unfavorable price/mix. Volume increased 3% driven by New Mix, the launch of JDTB, and JDTW, due in part to a net increase in distributor inventories in the United States, partially offset by the end of the Korbel relationship and lower volumes of JD RTD/RTP. Price/mix declined 1% driven by unfavorable portfolio mix from New Mix and lower sales of used barrels, partially offset by the positive effect of foreign exchange and the favorable portfolio mix impact from JD RTD/RTP.

For the nine months ended January 31, 2026, net sales were $3.0 billion, a decrease of $65 million, or 2%, driven by unfavorable price/mix, partially offset by higher volumes. Volume increased 2% driven by higher volumes of New Mix and the launch of JDTB, due in part to a net increase in distributor inventories in the United States, partially offset by the end of the Korbel relationship and the Sonoma-Cutrer prior-year TSA, as well as lower volumes of JD RTD/RTP and JDTW. Price/mix declined 4% driven by unfavorable portfolio mix from New Mix and lower sales of used barrels, partially offset by the positive effect of foreign exchange and the positive portfolio mix impact from JDTB and JD RTD/RTP. See “Results of Operations - Fiscal 2026 Year-to-Date Highlights” above for further details on net sales for the nine months ended January 31, 2026.

Cost of Sales
			3 Months															9 Months
Percentage change versus the prior year period ended January 31			Volume			Cost/mix			Total									Volume			Cost/mix			Total
Change in reported cost of sales			3		%	(4		%)	—		%							2		%	(5		%)	(3		%)
Acquisitions and divestitures			3		%	2		%	5		%							3		%	4		%	8		%
Foreign exchange			—		%	(2		%)	(2		%)							—		%	(1		%)	(1		%)
Change in organic cost of sales			6		%	(3		%)	3		%							5		%	(2		%)	3		%
Note: Results may differ due to rounding

For the three months ended January 31, 2026, cost of sales were $416 million, a decrease of $1 million, or flat, as favorable cost/mix was offset by higher volumes. Volume increased 3% driven by New Mix, the launch of JDTB, and JDTW, due in part to a net increase in distributor inventories in the United States, partially offset by the end of the Korbel relationship and lower volumes of JD RTD/RTP. Cost/mix declined 4% driven by the end of the Korbel relationship, favorable portfolio mix from New Mix, and lower agave costs. The decline was partially offset by unfavorable fixed cost absorption related to decreased production of our full-strength portfolio, inflation on our input costs, and the negative effect of foreign exchange.

For the nine months ended January 31, 2026, cost of sales were $1.2 billion, a decrease of $42 million, or 3%, driven by favorable cost/mix, partially offset by higher volumes. Volume increased 2% driven by New Mix and the launch of JDTB, due in part to a net increase in distributor inventories in the United States, partially offset by the end of the Korbel relationship and the Sonoma-Cutrer prior-year TSA, as well as lower volumes of JD RTD/RTP and JDTW. Cost/mix declined 5% driven by the end of the Korbel relationship, the absence of the Sonoma-Cutrer prior-year TSA, favorable portfolio mix from New Mix, as well as lower agave costs. These declines were partially offset by unfavorable fixed cost absorption related to decreased production of our full-strength portfolio, inflation on our input costs, timing of cost fluctuations, and the negative effect of foreign exchange.

Gross Profit
Percentage change versus the prior year period ended January 31			3 Months						9 Months
Change in reported gross profit			4		%				(1		%)
Acquisitions and divestitures			1		%				1		%
Foreign exchange			(5		%)				(2		%)
Change in organic gross profit			(1		%)				(2		%)
Note: Results may differ due to rounding

Gross Margin
For the period ended January 31			3 Months						9 Months
Prior year gross margin			59.8		%				59.4		%
Price/mix			(0.5)		%				(0.4)		%
Cost			(0.3)		%				(0.9)		%
Acquisitions and divestitures			0.9		%				1.6		%
Foreign exchange			0.8		%				0.3		%
Change in gross margin			0.9		%				0.5		%
Current year gross margin			60.6		%				59.9		%
Note: Results may differ due to rounding			0.001000						—

For the three months ended January 31, 2026, gross profit totaled $640 million, an increase of $22 million, or 4%. Gross margin increased to 60.6% from 59.8% in the same period last year. The increase in gross margin was driven by the positive effect of acquisitions and divestitures and the positive effect of foreign exchange, partially offset by unfavorable price/mix and higher costs.

For the nine months ended January 31, 2026, gross profit totaled $1.8 billion, a decrease of $23 million, or 1%. Gross margin increased to 59.9% from 59.4% in the same period last year. The increase in gross margin was driven by the positive effect of acquisitions and divestitures and the positive effect of foreign exchange, partially offset by higher costs and unfavorable price/mix.

Operating Expenses
Percentage change versus the prior year period ended January 31
3 Months			Reported			Acquisitions and Divestitures			Other Items****1						Foreign Exchange												Organic
Advertising			(4		%)	3		%	—		%				(4		%)										(5		%)
SG&A			3		%	—		%	—		%				(3		%)										—		%
Total operating expenses****2			(11		%)	2		%	10		%				(2		%)										(2		%)
9 Months
Advertising			(3		%)	3		%	—		%				(2		%)										(2		%)
SG&A			(1		%)	—		%	—		%				(2		%)										(2		%)
Total operating expenses****2			(3		%)	—		%	2		%				(1		%)										(2		%)
Note: Results may differ due to rounding

1“Other items” includes “substitution drawback claims,” “franchise tax refund,” and “restructuring initiative.” See “Non-GAAP Financial Measures” above for additional details.

2Total operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.

For the three months ended January 31, 2026, operating expenses totaled $300 million, a decrease of $39 million, or 11%, compared to the same period last year. The decrease in operating expenses was driven by the impact of lower restructuring initiative costs as compared to the same prior-year period, and lower advertising expense. These decreases were partially offset by the negative effect of foreign exchange.

• Advertising expense decreased 4% for the three months ended January 31, 2026, driven by lower JDTW and other super-premium Jack Daniel’s expressions spend, as well as the end of the Korbel relationship. These decreases were partially offset by the negative effect of foreign exchange and the increased investment for the launch of JDTB.

• SG&A expense increased 3% for the three months ended January 31, 2026, driven by the negative effect of foreign exchange and higher costs in Italy related to the transition to owned distribution, partially offset by lower compensation-and-benefit-related expenses.

For the nine months ended January 31, 2026, operating expenses totaled $902 million, a decrease of $26 million, or 3%. The decrease in operating expenses was driven by the benefit of the substitution drawback claims, lower SG&A and advertising expenses, and the impact of lower restructuring initiative costs as compared to the same prior-year period. These decreases were partially offset by the absences of the prior-year franchise tax refund and gain on the sale of the Alabama cooperage, as well as the negative effect of foreign exchange.

• Advertising expense decreased 3% for the nine months ended January 31, 2026, driven by the end of the Korbel relationship and lower spend across the other super-premium Jack Daniel’s expressions, JDTA, and JDTH. These decreases were partially offset by the launch of JDTB and the negative effect of foreign exchange.

• SG&A expense decreased 1% for the nine months ended January 31, 2026, driven by lower compensation-and-benefit-related expenses following our restructuring initiative, partially offset by the negative effect of foreign exchange.

Operating Income
Percentage change versus the prior year period ended January 31			3 Months						9 Months
Change in reported operating income			21		%				—		%
Acquisitions and divestitures			1		%				2		%
Other items1			(11		%)				(2		%)
Foreign exchange			(10		%)				(3		%)
Change in organic operating income			—		%				(3		%)
Note: Results may differ due to rounding

1“Other items” includes “substitution drawback claims,” “franchise tax refund,” and “restructuring initiative.” See “Non-GAAP Financial Measures” above for additional details.

For the three months ended January 31, 2026, operating income totaled $340 million, an increase of $60 million, or 21%, compared to the same period last year. Operating margin increased 5.0 percentage points to 32.1% from 27.1% in the same period last year driven by the impact of lower restructuring initiative costs, the positive effect of foreign exchange, the positive effect of acquisitions and divestitures, and lower advertising expense. These increases were partially offset by the decline in gross profit.

For the nine months ended January 31, 2026, operating income totaled $905 million, an increase of $3 million, or flat. Operating margin increased 0.7 percentage points to 30.0% from 29.3% in the same period last year driven by (a) the benefit of the substitution drawback claims, (b) the impact of lower restructuring initiative costs, (c) lower SG&A and advertising expenses, (d) the positive effect of acquisitions and divestitures, and (e) the positive effect of foreign exchange. These increases were partially offset by the decline in gross profit and the absence of the prior-year franchise tax refund.

The effective tax rate for the three months ended January 31, 2026 was 14.9% compared to 18.7% for the same period last year. The decrease in our effective tax rate was driven primarily by the favorable year-over-year impacts of tax rate changes, tax credits, lower state taxes, the effects of foreign taxes and changes in unrecognized tax benefits, which were partially offset by the unfavorable year-over-year impact of prior fiscal year true-ups.

The effective tax rate for the nine months ended January 31, 2026 was 18.7% compared to 19.5% for the same period last year. The decrease in our effective tax rate was driven primarily by the favorable year-over-year impacts of tax rate changes, lower state taxes, tax credits and changes in valuation allowances, which were partially offset by the unfavorable year-over-year impact of prior fiscal year true-ups.

Diluted earnings per share of $0.58 for the three months ended January 31, 2026, increased 1% compared to the $0.57 reported for the same period last year, as the increase in operating income, the benefit of lower effective tax rate, and lower interest expense, net was partially offset by the absence of gain on sale of our investment in Duckhorn. Diluted earnings per share of $1.41 for the nine months ended January 31, 2026, decreased 8% from the $1.53 reported for the same period last year, driven by the absence of gain on sale of our investment in Duckhorn and an increase in non-operating postretirement expense, partially offset by lower interest expense, net.

Fiscal 2026 Outlook

Below we discuss our outlook for fiscal 2026, which reflects the trends, developments, and uncertainties (including those described above) that we expect to affect our business.

We continue to anticipate the operating environment for fiscal 2026 to be challenging, with low visibility due to macroeconomic and geopolitical volatility as we face headwinds from consumer uncertainty and lower non-branded sales of used barrels. We remain focused on building our business for the long term and navigating the current environment at pace with strategic initiatives in fiscal 2026 that we believe will unlock future growth led by the significant evolution of our U.S. distribution, the restructuring initiative, and meaningful new product innovation.

Accordingly, we reiterate the following expectation for fiscal 2026:

• Organic net sales decline in the low-single digit range.

• Organic operating income decline in the low-single digit range.

• Capital expenditures planned to be in the range of $110 to $120 million.

The forecasted effective tax rate range has been updated to approximately 19% to 21% from 21% to 23%.

Liquidity and Financial Condition

Liquidity. We generate strong cash flows from operations, which enable us to meet current obligations, fund capital expenditures, and return cash to our stockholders through regular dividends and, from time to time, through share repurchases and special dividends. We believe our investment-grade credit ratings (A2 by Moody’s and A- by Standard & Poor’s) provide us with financial flexibility when accessing global debt capital markets and allow us to reserve adequate debt capacity for investment opportunities and unforeseen events.

Our cash flows from operations are supplemented by our cash and cash equivalent balances, as well as access to other liquidity sources. Cash and cash equivalents were $444 million at April 30, 2025, and $383 million at January 31, 2026. As of January 31, 2026, approximately 48% of our cash and cash equivalents were held by our foreign subsidiaries whose earnings we expect to reinvest indefinitely outside of the United States. We continue to evaluate our future cash requirements and may decide to repatriate additional cash held by our foreign subsidiaries, which may require us to provide for and pay additional taxes.

We have a $900 million commercial paper program that we use, together with our cash flows from operations, to fund our short-term operational needs. See Note 8 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for outstanding commercial paper balances, interest rates, and days to maturity at April 30, 2025, and January 31, 2026. The average balances, interest rates, and original maturities during the periods ended January 31, 2025 and 2026, are presented below.

									Three Months Average																		Nine Months Average
																					January 31,																		January 31,
(Dollars in millions)																					2025						2026																		2025						2026
Average commercial paper (par amount)																					$422						$315																		$463						$285
Average interest rate																					4.80%						3.99%																		5.16%						4.32%
Average days to maturity at issuance																					56						32																		42						29

Our commercial paper program is supported by available commitments under our $900 million bank credit facility that expires on May 26, 2029. Although unlikely, under extreme market conditions, one or more participating banks may not be able to fund its commitments under our credit facility. To manage this counterparty credit risk, we partner with banks that have investment grade credit ratings, limit the amount of exposure we have with each bank, and monitor each bank’s financial condition.

Our most significant short-term cash requirements relate primarily to funding our operations (such as expenditures for raw materials, production and distribution, advertising and promotion, and current taxes), repayment of our notes maturing in July 2026, dividend payments, share repurchases, and capital investments. We expect to meet our planned short-term liquidity needs through cash generated from operations and borrowings under our commercial paper program. If we have additional liquidity needs, we believe that we could access financing in the capital markets. Our most significant longer-term cash requirements primarily include payments related to our long-term debt, employee benefit obligations, and deferred tax liabilities.

We believe our current liquidity position, supplemented by our ability to generate positive cash flows from operations in the future, and our ample debt capacity enabled by our strong short-term and long-term credit ratings, will be sufficient to meet all of our expected future short- and long-term financial commitments.

Cash flows. Cash provided by operating activities of $709 million during the nine months ended January 31, 2026, increased $263 million from the same period last year, reflecting lower working capital requirements, partially offset by lower earnings.

Cash used for investing activities was $48 million during the nine months ended January 31, 2026, compared to $284 million in cash provided by investing activities during the same period last year. The $332 million decrease largely reflects (a) the absence of $350 million in proceeds from the sale of our equity method investment in Duckhorn in December 2024 and (b) an $18 million decrease in proceeds from cooperage asset sales ($51 million from the sale of our Alabama cooperage assets in May 2024; $33 million from the sale of our Brown-Forman Cooperage assets in May 2025), partially offset by (c) a $36 million decline in capital expenditures.

Cash used for financing activities was $737 million during the nine months ended January 31, 2026, compared to $546 million in cash used for financing activities during the same prior-year period. The $191 million increase largely reflects a $400 million increase in share repurchases and an $8 million increase in dividend payments, partially offset by a $214 million decrease in net repayments of short-term borrowings.

Dividends. See Note 9 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for information about cash dividends declared per share on our Class A and Class B common stock during fiscal 2026.

Share repurchases. On October 1, 2025, the Board of Directors authorized the repurchase of up to $400 million (excluding brokerage fees and excise taxes) of outstanding shares of Class A and Class B common stock from October 1, 2025, through October 1, 2026 (the Repurchase Program), subject to market and other conditions. Under the Repurchase Program, we could repurchase shares of Class A and Class B common stock for cash in open market purchases, block transactions, purchases made in accordance with Rule 10b5-1 under the Exchange Act, and privately negotiated transactions, in accordance with applicable laws and regulations. The Repurchase Program did not obligate us to repurchase a minimum number of shares of common stock and prior to its completion, could be modified, suspended, or terminated by us at any time without prior notice.

Under the Repurchase Program, we repurchased 705,139 Class A shares at an average price of $28.10 per share and 13,348,510 Class B shares at an average price of $28.48 per share, for a total cost (excluding brokerage fees and excise taxes) of $400 million. The program was completed in December 2025.