Brown-Forman's Q2 Earnings on the Deck: Is a Beat Likely in the Cards?

Brown-Forman Corporation BF.B is slated to release second-quarter fiscal 2026 results on Dec. 4. The alcoholic beverage bigwig’s revenues and earnings are expected to decrease year over year in the quarter under review. The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $1.03 billion, indicating a drop of 6.3% from the year-ago quarter.The consensus mark for earnings is pegged at 48 cents per share, indicating a decrease of 12.7% from the year-ago period’s number. Earnings estimates for the fiscal second quarter have been unchanged in the past 30 days.In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 2.7%. In the trailing four quarters, BF.B delivered an earnings surprise of 3.1%, on average.Key Factors Likely to Affect BF.B’s Q2 ResultsBrown-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 foreign exchange remain concerning.Lower volumes of Jack Daniel’s Tennessee Whiskey and Herradura, and the conclusion of the Korbel relationship have been acting as deterrents. Additionally, Brown-Forman’s performance reflects both cost pressures and evolving portfolio dynamics. Higher costs, mainly owing to inflation on input costs and reduction in production levels and unfavorable price mix, have been headwinds. Brown-Forman is contending with consumer caution, the looming threat of tariffs and other related concerns. On its last 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 a strong addition to the portfolio, which reflects progress on its commitment to premiumization of its portfolio. Strength in emerging markets has been a bright spot. The Zacks Consensus Estimate for emerging markets’ revenues is pegged at $250 million, indicating a rise of 13.6% year over year.What the Zacks Model UnveilsOur 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’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 -4.84% and a Zacks Rank of 2 at present.Brown-Forman Corporation Price and EPS Surprise Brown-Forman Corporation price-eps-surprise | Brown-Forman Corporation QuoteBF.B’s Valuation Picture & Price PerformanceFrom 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 16.82X, which is higher than the Beverages - Alcohol industry’s average of 14.30X. The stock has a high of 18.12X. The recent market movements show that BF.B’s shares have lost 1.2% in the past three months compared with the industry's 5.1% drop.Stocks With the Favorable CombinationHere are some companies, which according to our model, have the right combination of elements to post an earnings beat:Ollie's Bargain Outlet OLLI currently has an Earnings ESP of +6.54% and a Zacks Rank of 2.  You can see the complete list of today’s Zacks #1 Rank stocks here.The company is likely to register an increase in its top and bottom lines when it reports third-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for OLLI’s quarterly revenues is pegged at $615.7 million, which indicates a 19% rise from the prior-year quarter. The consensus estimate for Ollie's Bargain Outlet’s quarterly earnings per share is pegged at 71 cents, indicating a 22.4% increase from the year-ago period. OLLI has a trailing four-quarter earnings surprise of 4.2%, on average.Simply Good Foods SMPL currently has an Earnings ESP of +3.50% and a Zacks Rank of 3. The company is likely to register a decrease in its top line when it reports first-quarter fiscal 2026 numbers. The Zacks Consensus Estimate for Simply Good Foods’ quarterly revenues is pegged at $336.1 million, which indicates a drop of 1.5% from the prior-year quarter.The consensus estimate for Simply Good Foods’ quarterly earnings per share is pegged at 36 cents, down 26.5% year over year. SMPL has a trailing four-quarter earnings surprise of 5.1%, on average.Sysco SYY currently has an Earnings ESP of +0.05% 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 2026 numbers. The Zacks Consensus Estimate for quarterly earnings per share is pegged at 98 cents, up 5.4% from the year-ago period. SYY has a trailing four-quarter earnings surprise of 0.4%, on average.The consensus estimate for Sysco’s quarterly revenues is pegged at $20.82 billion, which implies an increase of 3.3% from the prior-year quarter.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>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 Brown-Forman Corporation (BF.B): Free Stock Analysis Report Sysco Corporation (SYY): Free Stock Analysis Report The Simply Good Foods Company (SMPL): Free Stock Analysis Report Ollie's Bargain Outlet Holdings, Inc. (OLLI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks