Brown-Forman sees sales slide 4% in Q2

Brown-Forman reported a net sales decline of 4% in the second quarter of its fiscal year, citing weakening currencies and rising competition in the US.

Jack Daniel’s reported strong net sales in the US during Q2 of Brown-Forman’s fiscal year

The Jack Daniel’s Tennessee and Tequila Herradura maker saw net sales fall to US$1.096 billion in the three months up to 31 October.

During the first six months of the year, sales of Jack Daniel’s grew 7% excluding foreign currency effects, with Tennessee Honey whiskey sales growing 14%.

Underlying net sales for Brown-Forman show a 6% new sales increase during the first two quarters of the financial year.

“While adverse foreign currency exchange continued to dampen our reported results, Brown-Forman’s underlying results in the first half of the year remain strong and keep us on track to achieve our full year growth outlook,” commented Paul Varga, chief executive officer of Brown-Forman.

“We expect our top-tier underlying results to be driven by our Jack Daniel’s-led portfolio, our leadership position in the premium American whiskey category, and the breadth and balance of our geographic development.”

Underlying sales of the firm’s super- and ultra-premium whiskey brands witnessed double-digit net sales, with the Woodford Reserve brands reporting 28% growth.

In the US, underlying net sales grew 7%, driven largely by higher volumes due to the rollout of Jack Daniel’s Tennessee Fire plus “modest improvements” in price/mix.

Outside the States, developed markets such as Germany, France and the Czech Republic experienced double-digit underlying net sales.

Meanwhile the UK and Canada showed “solid gains”, but Australia and Japan were “flat year-over-year”.

Global travel retail sales took a hit with an underlying net sales decline of 14% year to date, attributed to the competitive travel retail market space and the decline of high spending Russian and European travellers.