Brown-Forman hails ‘strong’ Q3 results

8th March, 2018 by Nicola Carruthers

Brown-Forman has reported a “strong” third quarter, with net sales up by 9% to US$878 million, led by the Jack Daniel’s family of brands.

Jack Daniel’s family of brands boosted the ‘strong’ third quarter net sales

In its third financial quarter, reported operating income increased 11% to US$304m compared to the same period in the previous financial year.

For the first nine months of fiscal 2018, the company’s reported net sales increased 9% to US$2,515m and reported operating income increased 15% year-to-date to US$894m.

In the US, underlying net sales grew by 5%, driven by “broad-based gains” from the Jack Daniel’s family of brands and the ready-to-drink portfolio.

The UK and Germany grew underlying net sales by 6% and 11%, respectively, while Australia jumped up 10%.

Japan declined by 7%, blamed on the volume declines of Early Times Bourbon.

The company’s two largest emerging markets, Mexico and Poland, both grew by 10%. Meanwhile travel retail delivered double-digit growth (11%) in the first nine months of the fiscal year.

The Jack Daniel’s family of brands led overall net sales growth, rising by 7%. Flagship brand Jack Daniel’s Tennessee Whiskey rose by 5% globally, with “strong” volume gains in markets outside of the US.

The company’s portfolio of super- and ultra-premium American whiskey brands – including Woodford Reserve, Jack Daniel’s Single Barrel and Gentleman Jack – delivered 16% underlying net sales growth. Woodford Reserve and Old Forester grew by 22%, with double-digit growth from Old Forester.

Underlying net sales for Finlandia vodka grew by 7% and el Jimador Tequila increased by 9%.

Herradura experienced a 20% increase, benefiting from the US and Mexico markets, where results were helped by continued growth of Herradura Ultra.

Looking ahead to fiscal 2018, the firm expects a net sales growth of 6-7% and underlying operating income to increase by 8-9%.

Paul Varga, chief executive officer, said: “Brown-Forman’s business momentum continued through the third quarter, resulting in year-to-date underlying net sales and operating income growth of 7% and 11%, respectively, and even stronger on a reported basis.

“The results were well balanced by geography and driven by 8% underlying net sales growth for our Jack Daniel’s led American whiskey portfolio.

“Our accelerated rates of growth keep us on track to deliver high quality, top-tier results in fiscal 2018.”

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