Brown-Forman hails ‘strong’ Q3 resultsBy 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.
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.”