Brown-Forman has warned that consumer spending will remain under pressure over the coming year, despite posting stronger-than-expected quarterly sales.

The Jack Daniel’s maker said it expects the trading environment in fiscal 2027 to remain challenging, with macroeconomic pressure and geopolitical instability continuing to weigh on consumer behaviour and alcohol consumption, particularly in developed markets.

The update comes as spirits makers continue to face weaker demand following a multi-year slowdown, alongside ongoing tariff and cost pressures.

Brown-Forman, which also owns Tequila Herradura, said organic sales in fiscal 2027 are expected to be flat, broadly in line with fiscal 2026.

The forecast follows a period of deal speculation for the Kentucky-based drinks group, which recently rejected a $15bn approach from Sazerac and ended separate merger talks with Pernod Ricard.

For the quarter ended 30 April, Brown-Forman reported a 2 per cent rise in sales to $912m, ahead of analyst expectations of $879.6m.

The company said performance was supported by steady demand for premium products, including Jack Daniel’s Tennessee Blackberry whiskey.

However, profits came under pressure as selling, general and administrative expenses rose by around 34 per cent to $259m.

Profit per share fell 62 per cent to 12 cents, missing analyst expectations of 32 cents.

Brown-Forman is currently carrying out a restructuring plan announced in 2025, which includes cost control measures and job cuts as it looks to navigate softer demand across the spirits market.

Shares in the company rose three per cent in morning trading following the update, although they remain below the highs reached earlier this year when merger talks with Pernod Ricard first emerged.