Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Brown-Forman First Half Fiscal 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Sue Perram, Vice President and Director of Investor Relations. Ma'am, please begin.

Thank you and good morning, everyone. I would like to thank each of you for joining us today for Brown-Forman's second quarter and first half of fiscal year 2025 earnings call. Joining me today are Lawson Whiting, President and Chief Executive Officer; and Leanne Cunningham, Executive Vice President and Chief Financial Officer. This morning's conference call contains forward-looking statements based on our current expectations. Numerous risks and uncertainties may cause actual results to differ materially from those anticipated, or projected in these statements. Many of the factors that will determine future results are beyond the company's ability to control or predict. You should not place undue reliance on any forward-looking statements and except as required by law, the company undertakes no obligation to update any of these statements, whether due to new information, future events or otherwise. This morning, we issued a press release containing our results for the second quarter and first half of fiscal year 2025, in addition to posting presentation materials that Lawson and Leanne will walk through momentarily. Both the release and the presentation can be found on our website under the section titled Investors, Events and Presentations. In the press release, we have listed a number of the risk factors you should consider in conjunction with our forward-looking statements. Other significant risk factors are described in our Form 10-K and Form 10-Q reports filed with the Securities and Exchange Commission. During this call, we will be discussing certain non-GAAP financial measures. These measures are reconciliation to the most directly-comparable GAAP financial measures and the reasons management believes they provide useful information to investors regarding the company's financial condition and results of operations are contained in the press release and investor presentation. Before we transition to our results, we have two very special guests with us. As you may recall, on November 25th, we announced a change in our Board of Directors Chair. Here to speak about this upcoming transition is Campbell Brown, Brown-Forman Chair of the Board; and his successor, Marshall Farrer, Executive Vice President and Chief Strategic Growth Officer and Brown-Forman Board Director. Both are great, great grandsons of the company's Founder. Campbell and Marshall have a few remarks they would like to share. After that, we will review our financial results and then Lawson, Leanne and I will be available for Q&A. Campbell, I would now like to turn the call over to you.

Thank you, Sue, and good morning. I'm delighted to join you today as this is just the second time I've spoken on one of these quarterly calls. The first time was the third quarter of fiscal 2021 when it was announced that I would become the next Chair of the Board. Like then, I'm here today to discuss succession planning. As we know, it is not by chance that Brown-Forman has been a family-controlled organization for 154 years. Rather, we understand the company's independence has been enabled by intentional family connections spanning multiple generations as well as purposeful and productive relationships between the family, Brown-Forman's executive leadership team and Board of Directors. As you may have seen, at the recent meeting of the Brown-Forman Board of Directors, I announced my decision to step-down as Chair when my term ends in July 2025. While this decision may have come as a surprise to some, let me assure you that even before assuming the role of Board of Chair in 2021, I knew that my time in the position would be thoughtfully measured. My timeline was always well-aligned with our Board's succession planning process. At the same time, being true to who I am and what I believe is best for the company that I love so dearly. While I am stepping down from my role as Chair, I am thrilled to have the opportunity to stand for re-election in July as a Board member and continue to help steward Brown-Forman's future in that capacity. It has been an honor to serve as Chair of the Board alongside such a talented collection of directors and a dedicated executive leadership team, but most of all, I continue to be impressed by the skill, dedication and resilience of our employees. Since I became Chair,…

Thank you, Campbell, and hello, everyone. First, I'd like to thank the Board for the confidence it is placing in me as the next Chair of our Board of Directors. I started my career at Brown-Forman in 1998 as a marketing manager in the wine division. I was based in California back then and over the years have held a variety of roles in a number of regions around the globe, including positions that took me to Sydney, Amsterdam and London before recently relocating back to our hometown of Louisville, Kentucky. As Campbell mentioned, in addition to the various operational roles I have had over my 26-plus years with Brown-Forman as well as my nearly nine years of Board service, I've also enjoyed working with members of my family since 2000, when the fifth generation began evolving and formalizing our governance initiatives. I am very honored to accept this new responsibility as we enter the company's 155th year of operation, and I am deeply grateful for the trust placed in me by my fellow Board members and Brown family. I look forward to building on the strong foundation laid by Campbell, Garvin and all those who have previously served as Chair of this great company. Please note that the Board and I understand our responsibilities to you, our public partners, as you look to Brown-Forman to deliver long-term sustainable growth achieved responsibly over decades and generations. I have greatly enjoyed meeting some of you at our more recent investor events and look forward to meeting those I have not met at future investor meetings and events. With that, I would like to turn the call over to Lawson to take us through the first half of fiscal 2025 results.

Thank you, Campbell and Marshall, and good morning, everyone. I hope that Campbell and Marshall's remarks are a reminder that Brown-Forman believes deeply in building our business to pass on to the next generation. This belief has been ingrained in our culture since 1870 by the six generations of Brown family members who have upheld the legacy of our founder, George Garvin Brown. I've enjoyed working closely with Campbell in his role as Board Chair, his deep understanding of our business and gift for building trust and confidence in those around him have made a lasting mark on Brown-Forman and our Board of Directors. While I've worked closely with Marshall as a member of the executive leadership team, I'm excited about the opportunity to work with him in his new capacity as Board Chair. In Marshall, we welcome a visionary thinker with excellent strategic acumen. Please join me in congratulating both of them on this transition. Also, before I share our second quarter and first half results for fiscal '25, I want to express my appreciation to each of our 5,700 employees for their contributions to these results. They've remained dedicated to our brands and our business through the challenging operating environment and in doing so, remind me why we often say that there's nothing better in the market than Brown-Forman. Now to our results. As a reminder, we expected fiscal 2025 to be a year of two halves. We anticipated that the second half of our fiscal year would be stronger than our first half as in the first half, we compared against strong shipments related to the replenishment of inventory in a few emerging international markets and buy-ins ahead of planned price increases. This year has largely unfolded as we anticipated. The top and bottom line results that…

Thank you, Lawson, and good morning, everyone. As Lawson mentioned, I will provide additional details on our geographic performance, other financial highlights, and our fiscal 2025 outlook. From a geographic perspective, as expected, we saw sequential organic net sales improvement in each of our geographic clusters as we move through the first half. Our emerging international markets returned to growth and collectively delivered 6% organic net sales growth in the first half. This growth was fueled by the very strong double-digit growth of Jack Daniel's Tennessee Whiskey, Jack Daniel's Tennessee Honey, and Jack Daniel's Tennessee Apple in Turkiye and Brazil. Our business in Turkiye benefited from the continued growth of the premium whiskey category. In Brazil, the economy has remained resilient as our results were driven by the growth of the premium-plus whiskey category, where we are gaining share, our geographic expansion strategy, and the launch of an additional package size for Jack Daniel's Tennessee Whiskey. Brazil has consistently grown nine-liter depletions for the full-strength Jack Daniel's family of brands at a double-digit rate over the past four years and has joined the US, the UK, and Germany as a million case market where the trailing 12-month depletions exceeded 1 million nine-liter cases. In Mexico, organic net sales of el Jimador and Herradura declined as the challenging economic environment is impacting discretionary spending and consumers are trading down. Despite the decelerating conditions in Mexico, we continued to outperform and gained market share across the channels, driven by strong takeaway in RTDs and whiskey. In addition, Herradura is driving innovation in tequilas with the launch of Herradura Cristal in Mexico, which builds upon the region's Cristalino trend and addresses the consumers' need for a versatile tequila across occasions. Organic net sales in the travel retail channel declined 3% in the first…

[Operator Instructions] Our first question or comment comes from the line of Lauren Lieberman from Barclays. Ms. Lieberman, your line is open.

Great. Thanks so much. Good morning, everyone. I was just curious if you could talk a little bit more about inventory levels. I know, Leanne, you touched on it in your prepared remarks, but I think as always, key topic of conversation among investors before your call. So if you could just give us an update maybe on absolute inventory levels, particularly in the US, I think you had commented last quarter that they were generally holding steady on an absolute basis. So just curious if that was still the case. And then how you would sort of characterize distributor and retailer attitude towards the category overall and expectations for growth around the holiday season? Thanks.

Okay. Great. Thanks, Lauren. Just to reiterate what we said, we continue to believe that the distributors are targeting the low-end of their normal range and that retailers have adjusted their inventory levels in response to that lower consumer takeaway trend and the interest rate environment, similar as what we would have said in the first quarter. As you can see on our Schedule B in our first half, our shipments this quarter tend to be slightly ahead of our depletions, and that's reflecting our normal supply chain now from the supplier to the distributor to the retailer to the consumer. But as we prepare for the important holiday selling season, we have increased some shipments for specific brands such as Jack Daniel's Tennessee Whiskey, Woodford Reserve and Korbel to ensure that we've got product there to meet the consumer demand and protect against any out of stocks. And in the US, we're just continuing to work really closely with our partners and we're not forecasting any significant changes in trade inventory levels. And then I think every -- around the world, it continues to be really similar to where we were at the end of Q1 as well, which is in Europe where we own the majority of our distribution, our stock levels are normal. We have clear insight into our two largest markets in Latin America, which are Mexico and Brazil. And in Mexico, specifically, our RTDs are kind of below normal. I would say whiskeys are kind of in line with the long-term trends and tequilas are a bit above that. And again, that's more about how tequilas are performing in the Mexico market. And Brazil, overall, they're at the low-end of theirs. So we continue to believe our inventories are well-positioned with our distributors. But I would say in the US, we are being specific on some brands to support the holiday season and to ensure that we've got cases there to meet the consumer demand. And then, I'm sorry, what was the second part of your question?

Holidays, the holiday environment.

The holiday environment. Lawson, do you want to speak to that a little bit?

We talked about that a little bit. I mean, okay. Look, we don't have a lot of data yet on the holidays. So, we're obviously going to have to see. I think if you step back and look at total distilled spirits, now I'm going to talk about the US here for a second, then we can go to the rest of the world. But look, let's even back up a little more than that. Go back 18 months ago, I know many of you know this story, but I think it's important to reiterate what we think has been driving a lot of the trends over the last 18 months. So we had said, Lauren, it was actually in Boston with you at your conference of, when was that, 15, 16 months ago, the US market was still running in that [5% or 6%] (ph) range. So, an elevated number, which was true for the first half of '23 and then '22, even in '21. So, we've been dealing with that elevated level for quite some time. And between -- that time between sort of Labor Day and Christmas of last year, the market truly fell off a cliff and caught everyone by surprise. And we've been making the argument now for, I don't know, ever since then really that it was driven by economics and inflation and a consumer who has been pinched. And I think that's proven itself out across a whole lot of different consumer categories really over the last year. And to be honest, it's not really getting a lot better. So we are relatively muted in our expectations for Christmas this year. If you look at TDS in the US, as I said, it went from the [6%] (ph) range in the summer of '23 to about zero at Christmas and it's been running negative all year. If you want to find -- if you're looking for green shoots or some -- something positive on a consumer takeaway perspective, the NABCA data is getting better. And that consumer takeaway, particularly for Jack Daniel's Tennessee Whiskey, I would say that is one of the more positive things we're looking at right now is over the last six months, those numbers have improved. They're not improving in Nielsen, and they're still pretty kind of ugly, sort of down low single digits for sure. So we still are -- we'll make and continue to make the argument that it is driven by a consumer pinched and that will eventually work itself out. But I would say we're relatively cautious on what this Christmas is going to look like.

Thank you. Our next question or comment comes from the line of Bonnie Herzog from Goldman Sachs. Ms. Herzog, your line is now open.

All right. Thank you. Good morning, everyone. I was actually hoping for a little bit more color on the divergence in trends between US consumer takeaways and your reported whiskey depletions. I guess I'm trying to reconcile the negative, I don't know, 3% to 4% sales trends we've been seeing in the scanner data for the last few months versus your reported flat depletion growth in the quarter. Maybe you could touch on where you're seeing some strength? Is it non-tracked channels, possibly on-premise? And then love to hear your growth expectation for American Whiskey category this fiscal year? And does your guidance assume that Jack Daniel's will take share? Thank you.

All right. So for the US, I mean the -- you're right, there's been a divergence between NABCA and Nielsen, but I would argue right now that we're sort of running in the US around minus 3%, which is -- and that is about what we have reported on an organic basis. It's an around -- that's about what we're seeing on a consumer takeaway basis. So I don't think the disconnect is all that big. What you have seen is a change between Q1 and Q2. It has certainly improved on a -- on an organic basis. But at the end of the day, we're still down sort of, I'll call it, low single digits. So as far as on and off, they're not too far apart. I think on is about a point weaker. So I think we would say the US market is running about a minus 2 in the off, minus 3 in the overall on. So, not too far apart, but not too much different than it was six months ago. So that's why we were saying we're not really expecting a dramatic swing, say, over Christmas.

And then Bonnie, to the second part of your question about what's built into the guidance. For us, it's about a full-year benefit from having Gin Mare and Diplomatico in our results, the continued growth of Japan and then Jack Daniel's Tennessee Whiskey largely outside of the United States.

Thank you. Our next question or comment comes from the line of Nadine Sarwat from Bernstein. Ms. Sarwat, your line is open.

Thank you, Lawson, Leanne. Two for me. While we're on the US, first question, can you just elaborate maybe on the performance in October exiting the quarter? Any commentaries in November in particular? It sounds like it's more of the same from your comments, but if you could just confirm that. And then second question, you touched on tariffs in your prepared remarks. Obviously, top of mind, whether that's from imports from Mexico for your tequila business, exports to Europe. Can you talk a little bit more about how Brown-Forman is thinking about these potential risks and levers at your disposal? Should they come into play? You called out proactively preparing and implementing mitigation strategies. Could you elaborate on that? Thank you.

Thank you, Nadine. I'll start with the US to your question. We did see sequential improvement from Q1 to Q2. Q1 in the US, we were at a negative 4% and at the end of our first half, we are at a negative 3%. So, we are seeing sequential improvement in this market along with several of our other markets. We would say for the US, one detail I would share is our market share where we were holding in the first quarter, we're slightly declining market share now and that's largely based on our tequila performance. And I'll turn it over to Lawson for the tariffs.

For our favorite conversation on tariff. So yeah, I know you said it, Nadine, but let me make sure everybody is clear, we've got one tariff conversation around retaliatory tariffs from Europe based on steel and aluminum, which is what we suffered through in 2018 through 2021. And just as sort of a reminder, that was really all about exports of American whiskey. And as the clearly the market leader in that, it was a very painful and challenging time for us. That is scheduled to come back at the end of March. So it's still a few months out and there's a whole lot that can happen over that time. And the range is big. So it could further be suspended, which we think there's a decent chance for that. They can be removed altogether or the most drastic scenario would be coming back at 50%. And I'm sure there's other scenarios in the middle that we could come up with. We're working with all the government stakeholders that you would imagine we would be and we're obviously advocating for a solution that brings stability to all these trade relationships. But now having said that, we have learned from our prior experience with tariffs. We have been proactively preparing for a number of these scenarios and implementing risk mitigation strategies for our portfolio really around the world. But at this point, there are so many unknowns and potential scenarios. And it really, it's just difficult to figure out how it's all going to play out. Now more recently, the conversation clearly in the media and basically everywhere has been more about Canada and Mexico and the plans for a 25% tariff there. So now -- that now we're obviously talking imports, welcome to the party the rest of our industry. We have been suffering alone essentially for all these years on the threat of tariffs and now it's got a much, much broader and we're talking about lots of different categories within alcohol. But our business, the spirits business, given categories like tequila, like scotch, like Irish whiskey and bourbon and Tennessee whiskey, they're called distinctive products. They must be made in their designated country or even state. And look, we're a proud US headquartered company. We're hoping that the administration is going to realize that any growth in sales or production on those distinctive products made outside of the US helps us to grow and brings more investment and capital here. And so, we'll see how this all plays out, whether or not these negotiating tactics are real and how big they're going to be. Obviously, American whiskey is much bigger than tequila for us, but neither one is good for us. So at this point, Nadine, I wish I could -- we don't have any insight or information on this. There's so many potential scenarios and unknowns, it's just difficult to see how it's going to play out.

Thank you. Our next question or comment comes from the line of Robert Ottenstein from Evercore ISI. Mr. Ottenstein, your line is open.

Thank you very much. Let me go in a little bit of a different direction. Can you talk about Jack Daniel's Tennessee Whiskey in the US and the sort of measures that you're taking to, I don't know, if renovate the brand is too strong a word, but kind of restore it back to growth what your brand health indicators are suggesting? And maybe what we should be modeling or what we should be thinking about for that brand in the US going forward in terms of both volume and pricing? Thank you.

Yeah. So I mean that's a key question for us. And believe me, it's something the company is obviously very, very focused on. So a few things. One, realizing pre the last 18 months, so basically the years of COVID and everything that came after that, the brand was very healthy. I mean, the growth rates in the US were solid and good. So, it's only been in the last sort of 18 months that has gotten much more difficult. I think it's not really what we would think of as a brand health metric that is a problem. Having said that, we are working hard to recruit a new LDA to sort of 30 consumer. And some of the things that we're doing, which we briefly mentioned on the call at least, McLaren Racing has become a bigger and bigger part of our mix of spend and it's not that we do get some decent visibility on the car, on the racing and all that kind of stuff, but even just as important, if not more important, is the amount of activations we're doing around it and they often include music. So we're bringing music and McLaren together a little bit. We do something called Jack's Garage. And we're bringing in big acts. Shaboozey is one of them, but there's others also that we bring in and put on these concerts essentially around these races. And I think that is -- that's not an overnight fix, but it is something special, unique, and something we can own a little bit and there's a lot more going into that. You know the Shaboozey's Bar Song, we've all heard it a million times by now. It is at every football game and it is on the radio still all the time,…

Thank you. Our next question or comment comes from the line of Chris Pitcher from Redburn Atlantic. Mr. Pitcher, your line is now open.

Hi. Thank you, everyone. Could you just dig in a bit more detail into how big a contribution that the return of shipments to Japan was in the period? Because on my calculations, probably used barrel sales plus Japan added about 2 percentage points to growth on -- I would imagine on quite high drop-through margins. And then just on the used barrel sales, is that a function of price or volume that's helping that drive-through because it was much higher-than-expected? Thanks.

Yeah. So, for used barrels specifically, that you can see that in our non-branded and bulk and you can see it on Schedule B and Schedule C, it's really a combination of just supply-demand and it can even be customer mix at the time. It's volatile. It is just really based off supply and demand. And it is up this year from previous years because of the mix of those combination of things. From Japan, we've said from the very beginning, I think we've never disclosed specifically what we think that one unique piece of growth is. We've called it out the entire year as a source of growth for us in this year. Even as it related to -- there was disruption in F '24 as we were preparing for the transition. And now that we have the transition and the brands in our hands, we are being successful in establishing our business, taking price and capturing the margin. So we are happy with the growth that market and that team is able to deliver for us this year.

Thank you. Our next question or comment comes from the line of Filippo Falorni from Citi. Mr. Falorni, your line is now open.

Hi. Good morning, everyone. So I wanted to go back to the distributor inventory comments. If I look at your Schedule D, it seems like it was a pretty significant contributor to organic sales in this quarter. And if I look on a segment basis, it looks -- it was mainly in emerging markets. So maybe can you give us some sense of what happened, particularly in emerging markets? And then in terms of -- in the context of your guidance of 2% to 4% for the full year, what are your assumptions in terms of distributor inventories in the back half? Should we expect a continued positive trend in the back half, especially as you cycle easier comps, or how should we think about that particular item? Thank you.

Yes. So what you're seeing in the emerging international market is really a prior year where we were refilling the inventory. So for F '25, it is the absence of the refilling of the inventory in the United Arab Emirates, which we've mentioned before. And then to your question on the role it plays in our guidance, what we've talked about is in our second half, the majority of the movements in inventories across the distributor, retailer, consumer supply chain are behind us, and we believe that our trends are going to more closely reflect total distilled spirits. We've been intentional to say that we anticipate the benefit of normalizing inventory trends on a year-over-year basis as we begin to compare against the softening of total distilled spirits trends in the year ago and trade inventory reductions in the year to go, again, similar to what we said in our prepared remarks.

Thank you. Our next question or comment comes from the line of Bill Kirk from ROTH. Mr. Kirk, your line is now open.

Thank you. Good morning, everybody. Related to the tariff discussion, what's your ability to pre-ship into countries? And maybe how does that ability vary by countries where you own your own distribution? And how much of that were you able to do last time European retaliatory tariffs were looming?

Yeah. Look, I'm going to kind of punt a little bit on that one and tell you, it's pretty competitively sensitive how we are handling that. And so, we're going to be quiet on that particular topic. We are making some decisions and some tough decisions, but it's a very difficult situation no matter what we do. It's still going to be a very painful situation -- painful outcome.

Thank you. Our next question or comment comes from the line of Peter Grom from UBS. Mr. Grom, your line is now open.

Thanks, operator. Good morning, everyone. Hope you are all doing well. So maybe just two quick housekeeping items to Leanne. I think you mentioned that you maintain the outlook for both the top and bottom line for the year, but you kind of touched on weaker gross margin expectations versus exiting the first quarter. So would it be fair to assume operating profit growth at the lower-end of the range, or is there an offset elsewhere that maybe I'm not thinking through? And then I guess it sounds like we're still early on kind of the holiday season. But I just would be curious going back over time, if there's one fewer week between Thanksgiving and kind of Christmas, is there any sort of dynamic in terms of demand or drinking occasions that we need to kind of think through on a year-over-year basis? Thanks.

Okay. So to your top and bottom line guide question. So our guidance, like as we said in our prepared remarks, the low and the high -- the high-end are based on various scenarios. It's going to -- and if there's varying levels of consumer demand that we have modeled across key markets such as the US and we've also modeled various net change -- estimated net change in distributor inventories. There are scenarios that will fall all across the range that we have provided to you. And what we would say is, though we'll have -- we're currently planning now for a slight contraction in gross margin, we are being very diligent and tightly controlling our SG&A to make sure that we're balancing the short-term pressures on our gross margin. And then from a holiday perspective...

Yeah. I have -- to be honest, I've not had any conversations with anyone on fewer selling days between Thanksgiving and Christmas. So I don't -- we hadn't even debated that internally. So I'm -- we've certainly not talked about it like it's a problem.

Yeah. And then as we are continuing to look at performance, it is too early yet to get a look into even the month of November, because we are just now in the process of closing out that month and we don't have visibility into those results yet. December, of course, then we don't have either, but we do feel like we will have consumer demand across the entire holiday selling season and it will net out across all of the holidays that fall inside of November through January.

Thank you. We have one more question. That is from Eric Serotta from Morgan Stanley. Sir, your line is now open.

Great. Thanks for squeezing me in. Actually, a couple of questions around the supply side. First, earlier this year or late last fiscal year, you did talk about reducing your production to get your finished goods inventory down. Where do you stand today versus your target? And then the next two parts of the question are kind of about industry supply. We have noticed an increase in supply for some allocated bourbons. I'm not talking things in the hundreds of dollars at retail, the things in the, call it, high-$20s to $40 range. Are you seeing or expecting any impact on your high-end bourbons from the increased industry supply or on Jack? And lastly, on the supply side, MGPI has certainly been having its challenges with its some third-party customers. What if anything do you think that kind of portends for industry supply as you look forward? Thank you.

Okay. Well, I can start with the Brown-Forman specific question on inventory levels. I would say on a year-over-year basis, we've made a significant amount of progress in the reduction of our finished goods inventory across our supply chain. Now we know it needs to be a little bit higher just because of we've transitioned more markets into own distribution. But when you take a look at our cash flow from operations, one of the primary drivers is that we have just lower working capital requirements and that's driven by the progress that we've made through those lower production volumes that we've spoken about.

Yeah. And on the overall industry supply, I mean, it's not much different than we said last quarter on this. I think if you backed up 18 months ago and would have asked that same question, I would have said we were short. I mean, it was tight, especially on a brand like Woodford that have been growing so -- very, very fast. One year later, with a slowdown that we've had, we have adjusted our production levels, and I'm pretty sure that the big players in the industry have also done the same. And that is the way this industry has worked for 100 years and you would expect that to slow down. The impact on the smaller, call them craft brands, call them challenger brands, whatever you might be, I saw that same report. It's a tough time to be developing new brands by independent companies right now. Retailers are taking -- they already have. They've taken inventory all out of the system and of course, they're going to take out the slower turning SKUs first. And so, you've seen struggles there. You've seen distributors that are underwater. The distributor world is really difficult right now and they have to focus on what makes them the most money and that happens to be the big brands. And so, there are a lot of disadvantages and challenges in that world and I'm sure they are slowing down right now and they don't really have a balance sheet like a company like a Brown-Forman would have. So, yeah, it's a challenging space to be in. I'm not saying it's really an advantage for us at this point. It's just the way industry conditions are evolving. The big established brands, I think, have a bit of an advantage right now.

Thank you. Ladies and gentlemen, this concludes the Q&A session for the call. We're out of time. At this time, I would like to turn the conference back over to Ms. Sue Perram, Vice President and Director of Investor Relations for any closing remarks.

Thank you. And thank you, Lawson and Leanne, and thank you to everyone for joining us today for Brown-Forman's second quarter and first half of fiscal year 2025 earnings call. If you have any additional questions, please contact us. Today is actually National Repeal Day, recognizing the ratification of the 21st Amendment to the United States Constitution and the end of Prohibition in the United States in 1933. I hope that you will join us in raising a glass this day as well as responsibly celebrating during the holiday season. Cheers and happy holidays. With that, this concludes our call.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.