The company anticipates a return to growth for organic net sales and organic operating income in fiscal 2025 driven by gains in international markets and the benefit of normalizing inventory trends.

The divestitures of Finlandia vodka and Sonoma-Cutrer wine businesses negatively impacted net sales and gross margin for the three months ended July 31, 2024, due to lost sales and transition service agreements.

Despite current challenges, the company reiterates its expectation for organic net sales growth in the 2% to 4% range and organic operating income growth in the 2% to 4% range for fiscal 2025, tempered by global macroeconomic and geopolitical uncertainties.

The company's outlook is tempered by management's belief that global macroeconomic and geopolitical uncertainties will continue to create a challenging operating environment.

The company manages market risks, including foreign currency exchange rates and commodity prices, through procurement strategies as well as the use of derivative and other financial instruments.

There has been no change in the company's internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

The company's substantial dependence upon the continued growth of the Jack Daniel's family of brands is listed as a risk factor that could cause actual results to differ materially from current expectations.

Disruption of the company's distribution network or inventory fluctuations in its products by distributors, wholesalers, or retailers is identified as a risk factor.

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 are listed as a risk factor.

Substantial competition from new entrants, consolidations by competitors and retailers, and other competitive activities, such as pricing actions, marketing, category expansion, product introductions, or entry or expansion in geographic markets or distribution networks is listed as a risk factor.

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 is listed as a risk factor.

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 is listed as a risk factor.

SG&A expense decreased 6% for the three months ended July 31, 2024 driven by lower compensation-related expenses, discretionary spend, and benefit-related expenses.

Production facility, aging warehouse, or supply chain disruption is listed as a risk factor.

Higher costs, lower quality, or unavailability of energy, water, raw materials, product ingredients, or labor is listed as a risk factor.

Substantial competition from new entrants, consolidations by competitors and retailers, and other competitive activities, such as product introductions, or entry or expansion in geographic markets or distribution networks is listed as a risk factor.

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 is listed as a risk factor.

Counterfeiting and inadequate protection of our intellectual property rights is listed as a risk factor.

The company's capital expenditures are planned to be in the range of $195 to $205 million.

The company believes its investment-grade credit ratings provide it with financial flexibility when accessing global debt capital markets and allow it to reserve adequate debt capacity for investment opportunities and unforeseen events.

The company generates strong cash flows from operations, which enable it to meet current obligations, fund capital expenditures, and return cash to its stockholders through regular dividends and, from time to time, through share repurchases and special dividends.

Negative publicity related to our company, products, brands, marketing, executive leadership, employees, Board of Directors, family stockholders, operations, business performance, or prospects is listed as a risk factor.

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 is listed as a risk factor.

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 is listed as a risk factor.

Decline in the social acceptability of beverage alcohol in significant markets is listed as a risk factor.