Brown-Forman reports stagnant FY sales

Jack Daniel’s owner Brown-Forman saw net sales fall by 1% to US$4.2 billion in the year ending 30 April 2024.

Organic fourth-quarter (Q4) sales fell by 5% to US$1bn compared with Q4 2023. Organic operating income fell by 16% to US$375 million.

The company has previously estimated that full-year sales would be stagnant when it posted a 1% drop for the first half of its 2024 fiscal year.

Lawson Whiting, Brown‑Forman’s president and chief executive officer, said: “In a challenging year within the spirits industry, Brown‑Forman remained agile and focused on the long-term growth of our brands and our business.

“While our fiscal 2024 organic results reflect the inventory reductions across the entire spirits value chain, when you adjust for the changes in distributor inventory, we feel good about the results we delivered and are confident in the strength of our strategy, brands, and business.

“As we look to fiscal 2025, we believe we can build on this foundation and deliver top and bottom line organic growth as well as continued gross margin expansion.”

Premium Bourbons outperform Jack Daniel’s

In fiscal 2024, organic net sales of the firm’s whisky brands declined by 2%, caused by lower volumes for Jack Daniel’s, which the brand said reflected ‘an estimated net decrease in distributor inventories’. The exception was Jack Daniel’s Tennessee Apple, which soared by 33%. The core Jack Daniel’s line dipped by 2%, while its Honey variant fell by 5%.

Brown-Forman’s premium Bourbons fared better, with Woodford Reserve growing by 3% and Old Forester by 11%. The ‘Rest of Whiskey’ segment – which includes Scotch whisky Glenglassaugh ­– rose by 16%.

Tequila sales fell by 7%, with El Jimador dropping by 1% and Herradura by 13%. Brown-Forman stated that Herradura experienced lower volumes in the US due to ‘an estimated net decrease in distributor inventories’.

Diplomático rum and Gin Mare drove the firm’s ‘Rest of Portfolio’ segment by 15%, while ready-to-drink (RTD) brand New Mix reported organic growth of 17%. Sales of Jack Daniel’s RTDs fell by 5% driven by lower volumes of the Jack Daniel’s & Cola RTD, though the firm added that this was partially offset by the continued launch of the co-branded Jack Daniel’s & Coca-Cola RTD.

The sale of Finlandia vodka and Sonoma-Cutrer wine resulted in a gain of US$267m. Coca-Cola’s bottling arm purchased the former for US$220m.

By region, US sales fell by 4% and ‘developed international’ markets dropped by 5%. Within this region, the UK fell by 14% and Australia by 6%, while Germany grew by 7% and Canada by 2%.

The firm reported that declines were largely offset by growth in emerging markets (up by 8%) – which includes Mexico (up 6%), Poland (up 11%) and Brazil (up 3%) – and travel retail (up 6%).

The firm also clarified that all of Jack Daniel’s Country Cocktails are now supplied, sold and distributed by Pabst Brewing Company. In 2023 it was revealed that the Country Cocktails warehouse was being repurposed to focus on the firm’s super-premium American whiskey portfolio.