Nadine Sarwat

Jim: Q1 GM 60.2% is likely the year's high point as costlier barreled whiskey flows through later. Lawson: Pernod terms were not mutually agreeable; focus stays on standalone value creation.

Peters declined to split out the components but identified barreled-whiskey cost as the largest, most predictable headwind, calling other items (energy, transportation) more variable. Whiting added that U.S. pricing is holding (TDS down about 1%, Brown-Forman down about half a point) so price/mix should not be a significant fiscal 2027 drag.

Whiting confirmed a roughly two-year cost headwind implying 100-150 basis points of gross-margin compression, of which 0.4 point is mix and the rest pure cost. On Blackberry he and Cunningham argued the multiyear phased global launch (additional U.S. sizes, European and emerging markets still to come) mitigates the year-two comp risk.

Leanne attributed gap to Blackberry launch flow-through (shipments → depletions → takeaway) and U.S. distributor term benefits. Expected to narrow through H2. Lawson confirmed pricing philosophy unchanged: low and slow. Brown-Forman portfolio pricing down 0.3%, near flat. TDS slightly worse but big players holding rational.

Lawson gave extended cyclical vs structural analysis. Cited TDS swing from +6% to -2% in 6-8 months as evidence structural factors alone cannot explain. GLP-1 growth has moderated, cannabis impact limited, Gen Z headwinds likely cyclical (wallet-driven). Acknowledged moderation trend and hemp-beverage loophole as emerging factors. Leanne noted U.S. depletion deceleration near Aug 1 transition date with gap between takeaway and depletions in some states.

Leanne detailed FY2026 assumptions: consumer behavior and trade inventory largely unchanged, Canada products off shelf (~1% of sales), 14 distributor transitions causing potential H1 disruption, used barrel decline >50%. Tariff guide reflects only currently known impacts. Lawson acknowledged long-term mid-single-digit algorithm doesn't work when TDS is declining 4-5% but pointed to 3/5/10-year CAGRs all in mid-single digits.

Lawson noted tequila pricing down 1.7% but TDS pricing only -0.5%, calling it still rational. Highlighted small sizes driving momentum as evidence of cyclical consumer pressure. Leanne added Herradura repositioning into $20-30 price tier.

Leanne confirmed U.S. sequential improvement from -4% in Q1 to -3% in H1 but noted slight market share losses driven by tequila. Lawson was candid about tariff uncertainty with many unknowns.

Fink gave a substantive answer on the saliency/relevance playbook for scaled brands and cited Corona non-alc as a white-space example.

Garth confirmed low-20s wine margin target still structurally achievable over medium term, but taking longer due to category headwinds, Canada ban, and cost deleverage timing.

Garth deferred FY27+ guidance to April call but signaled prior targets were set under better conditions. Bill noted December came in as expected with a very strong Christmas week for their brands.

Garth said FY26 CapEx is committed on longer-lead items, but they are reviewing ways to slow or avoid CapEx beyond FY26. Will provide FY27 guidance later this year.

Bill provided detailed Hispanic consumer research: 2/3 concerned about inflation, 50%+ about immigration, many about job losses. Social gatherings declining, directly impacting beer occasions. Garth said no material macro improvement assumed in forecast period.

Rahul cited easier comps, improved trips and household purchasing, and healthier above-premium consumer segment. Noted continued pressure on small/medium packs while singles and large packs performed well. Geographic variation with West significantly stronger this year. Monaco's singles/convenience model fits well with current consumer trends.

Rahul distinguished longstanding structural trends (health/wellness, generational change) producing ~-1 to -3% historically from 2025 added macro pressure (tariffs, immigration, economic impacts) producing -4.7%. Believes once macro issues pass, industry returns to pre-2025 baseline. Did not share specific internal analytics.

Gavin detailed U.K. declines in both channels with some Q2-to-date trend improvement aided by Easter shift and good weather, but expects June data to show greater decline cycling Euro 2024. Competitors pricing 20% below Carling on shelf. Madri up mid-single digits in Q2. CEE impacted by consumer confidence decline and geopolitical tensions with higher promotional activity across most markets. Premiumization drove almost 490bps positive mix.