So Brown-Forman just posted their Q3 numbers and they actually beat on both earnings and sales, which is solid given how rough things have been for consumer staples lately. EPS came in at 58 cents, up 1% year over year and better than the 48 cent consensus estimate. Revenue hit 1.056 billion, jumping 2% and clearing the 1 billion mark that analysts were expecting.

The interesting part is that organic sales only grew 1%, so a lot of that top-line beat came from acquisitions and divestitures. Gross margins expanded 80 basis points to 60.6%, which helped offset some of the higher costs they're dealing with. Operating income surged 21% on a reported basis though it fell 9% organically, so again the acquisitions are doing heavy lifting here.

Geographically it's a mixed bag. US sales are down 8% reported and 1% organic, mainly from losing the Korbel relationship and weakness in Jack Daniel's volumes. But emerging markets are firing on all cylinders with 16% reported growth and 15% organic, driven by strong performance in Brazil and Türkiye. Travel retail also marked solid gains, up 9% reported and 7% organic.

On the brand side, their tequila portfolio is struggling down 6-7% organically, with Herradura taking a particularly hard hit down 12%. But their New Mix RTD brand is absolutely crushing it with 34% organic growth, gaining share in Mexico and now rolling out stateside. Jack Daniel's as a whole is holding steady with 1% organic growth in whiskey.

Management is staying cautious though, still guiding for low-single digit organic sales declines in fiscal 2026 overall. They're banking on distribution changes, restructuring, and innovation to drive growth, but acknowledging the macro environment remains challenging. The stock is rated a Sell by Zacks right now and down over 12% in the past three months, so the market isn't particularly impressed despite the earnings beat.