Jack Daniel’s bolsters Brown-Forman H1

6th December, 2017 by Nicola Carruthers

Brown-Forman has reported a net sales increase of 10% to US$1,637 million in the first six months of its 2018 fiscal year, boosted by its Jack Daniel’s family of brands.

Brown-Forman’s first half of fiscal 2018 benefitted from Jack Daniel’s

In the company’s first half of the year, operating income increased 17% in the quarter to US$590 million.

The company’s underlying net sales growth was boosted by Jack Daniel’s, which was up 7% (10% reported). The brand experienced “solid increases” across most major markets, including “sizable gains” in emerging markets.

Jack Daniel’s Tennessee Honey’s underlying net sales grew 8% (10% reported). Gentleman Jack grew by 9% (+11% reported), driven by a new ad campaign and higher media spend.

Jack Daniel’s Tennessee Fire’s underlying net sales grew 14% (+22% reported), as the brand continues to benefit from a global rollout and on-premise gains in the US.

Jack Daniel’s RTD business grew underlying net sales 15% (+14% reported), aided by Jack Daniel’s Cider, Jack Daniel’s American Serve, Jack Daniel’s Lynchburg Lemonade and Southern Peach Country Cocktails.

Meanwhile, the firm’s portfolio of super- and ultra-premium whiskeys – which includes Woodford Reserve, Jack Daniel’s Single Barrel, and Gentleman Jack – delivered 15% underlying net sales growth (22% reported).

Woodford Reserve grew underlying net sales 21% (+23% reported), while Old Forester “grew even faster”, due to the combination of higher price, favourable product mix and volumetric gains.

Finlandia vodka grew underlying net sales 8% (18% reported) boosted by improved results in Russia that were than offset by “very competitive” pricing in Poland.

Tequila brand el Jimador grew underlying net sales by 10% (+15% reported), driven by strong takeaway trends in the United States.

Herradura Tequila grew underlying net sales by 19% (+15% reported), driven by double-digit gains in the US and Mexico, where results were helped by continued growth of Herradura Ultra.

“Brown-Forman’s second quarter and first half results were excellent on both a reported and underlying basis,” said CEO Paul Varga.

“Against a backdrop of improving economies in the emerging markets, and continued momentum in our categories of focus, our underlying net sales have accelerated nicely due to strong performances from our Jack Daniel’s, Woodford Reserve, Old Forester and Herradura brand families, as well as timing-driven improvements in our used barrel sales.

“We believe that an ever-improving combination of investment, resource allocation, revenue management, innovation, and geographic expansion are important contributors to our acceleration in fiscal 2018.”

Brown-Forman said that it will be “difficult to accurately predict future results” due to the volatility of emerging markets and the “competitive landscape of the developed world”.

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