What Happened?
Shares of alcohol company Brown-Forman (NYSE:BF.B) jumped 1.9% in the morning session after the company's Board of Directors approved a $400 million share repurchase program.
A share repurchase, often called a buyback, reduces the number of a company's shares available on the market, which can increase the value of the remaining shares. The program was scheduled to run from October 1, 2025, through October 1, 2026. In a statement, Brown-Forman's President and CEO, Lawson Whiting, noted the company's confidence in its ability to generate strong cash flow despite a competitive environment. The repurchase plan was presented as part of the company's commitment to returning capital to shareholders while also maintaining the ability to invest in future growth.
After the initial pop the shares cooled down to $27.88, up 1.2% from previous close.
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What Is The Market Telling Us
Brown-Forman’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 24 days ago when the stock dropped 4.7% after the stock continued to decline as the company reported a 3% sales drop for the first quarter of fiscal year 2026, citing significant headwinds from an ongoing trade dispute with Canada.
This follows a 7% sales decline in the previous quarter and a 5% drop for the full prior year. A key factor in the latest quarter's performance was a nearly 60% plunge in Canadian sales, attributed to a countrywide boycott in response to U.S. tariffs. CEO Lawson Whiting stated the dispute "created significant headwinds to our first quarter organic net sales results." Broader industry challenges are also at play, including general economic weakness, overproduction by distillers, and what Whiting described as a "flat" market for American whiskey, raising concerns about potential price drops due to excess supply.
Brown-Forman is down 25% since the beginning of the year, and at $27.88 per share, it is trading 43.7% below its 52-week high of $49.54 from October 2024. Investors who bought $1,000 worth of Brown-Forman’s shares 5 years ago would now be looking at an investment worth $368.57.
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