Brown-Forman Corp. reports net sales rose 1% to $985 million in the second fiscal quarter, ended Oct. 31, and net profit after tax eased 2% to $236 million, or 49 cents a share.
The company highlighted its first half results, in which the company’s net sales increased 9% to $1.900 billion (+12% on an underlying basis) compared to the like year-earlier period. In the first half, operating income decreased 15% to $611 million (+13% on an underlying basis) and diluted earnings per share declined 24% to $0.89 primarily due to the gain from the sale of the Canadian Mist, Early Times, and Collingwood brands in the prior year.
“Despite the many challenges and ongoing uncertainties created by the pandemic, Brown-Forman’s business remains incredibly strong,” said Lawson Whiting, Brown-Forman’s president/CEO. Whiting noted “consumers’ increasing preference for premium spirits and our strength in the growing American whiskey and tequila categories.”
Net sales in the U.S. were flat (up 6% underlying) in the first half. Jack Daniel’s family of brands grew net sales 9% (+11% underlying) powered by 14% net sales growth (+15% underlying) from Jack Daniel’s Tennessee Whiskey. Higher volumes for Jack Daniel’s RTDs and Jack Daniel’s Tennessee Honey, as well as the ongoing international launch of Jack Daniel’s Tennessee Apple contributed to sales growth. Supply chain disruptions adversely impacted these gains during the first half of the fiscal year.
The tequila portfolio’s underlying net sales grew 16% (+16% underlying) propelled by double-digit net sales growth for Herradura and el Jimador. Herradura grew volumes in the United States along with Mexico, which cycled against a weaker prior-year base. el Jimador’s net sales growth was driven by broad-based volume gains in the United States, Latin America, and the United Kingdom. These gains were partially offset by lower volumes of New Mix in Mexico reflecting a difficult prior-year comparison when volumes benefited from a temporary supply chain disruption in the beer industry.
On Nov. 18, Brown-Forman’s Board of Directors approved a 5% increase in the regular quarterly cash dividend to 18.85 cents a share on the Class A and Class B common stock, payable on Dec. 28 on stock of record Dec. 3. This marked the company’s 78th year of paying consecutive dividends and the 38th year of increases in its regular quarterly dividend.
Brown-Forman’s directors also declared a special dividend of approximately $480 million, or $1 a share, on its Class A and Class B common stock. This special cash dividend is payable on Dec. 29 on stock of record Dec. 9.