Brown-Forman Corp. reports net sales in fiscal 2021, ended April 30, rose 1% to $3.4 billion (flat on an underlying basis). Net profit fell 1% to $827 million or $1.72 a share.
For the fiscal fourth quarter, net sales1 declined 5% to $709 million (-10% on an underlying basis2) compared to the same prior-year period.
Jack Daniel’s family of brands underlying net sales were flat (+1% reported). Underlying net sales growth from Jack Daniel’s Tennessee Apple, Jack Daniel’s RTDs3,and Jack Daniel’s Tennessee Honey was offset by declines in Jack Daniel’s Tennessee Whiskey.
Premium bourbons grew underlying net sales 21% (+24% reported) led by Woodford Reserve’s 19% underlying net sales growth (+23% reported) and supported by even stronger underlying growth from Old Forester, the company’s founding brand, which is celebrating its 150th year
Brown-Forman’s tequila portfolio grew underlying net sales 2% (+5% reported) as high single-digit growth in the U.S. was partially offset by declines in Mexico. Herradura grew underlying net sales 7% (+11% reported) and el Jimador grew underlying net sales 5% (+8% reported), while underlying net sales for New Mix declined.
Non-branded and bulk underlying net sales declined 29% (-30% reported) primarily reflecting lower used barrel demand and pricing along with a reduction in bulk whiskey sales.
The company completed its third quarter of the fiscal year on Jan. 31, registering a year-to-date net sales increase of 3% on both a reported and underlying basis with underlying net sales trends holding through February. In early March, the company revised its full-year outlook to include an estimate for the impact of COVID-19 on its results from Asia, most notably China, and Travel Retail only. Subsequent to that time, the rapid spread of the virus resulted in all of the company’s major markets being negatively affected.
“COVID-19 began to affect our performance in the middle of March and continued throughout April as both on-premise, representing approximately 20% of our business globally, and Travel Retail channels essentially came to a halt. We experienced strong growth in the off-premise (based on syndicated takeaway data) and e-Premise channels across most of our developed markets as country lockdowns and government restrictions took hold reflecting both an increase in at-home consumption and some pantry loading,” said Jane Morreau, the company’s Executive Vice President and Chief Financial Officer.
While Covid-19 is a business challenge, Lawson Whiting, president/ceo, said “Brown-Forman has endured and prevailed through many challenges over the last 150 years.
“We believe we are well positioned to successfully navigate the environment we face today and emerge stronger thanks to the continued support of our shareholders, including the Brown family, our healthy balance sheet, the resilience of our people, and the strength of our brands,” he added.
Given the “substantial uncertainty related to the evolving COVID-19 pandemic and its effect on the global economy” Brown-Forman isn’t providing quantitative guidance for fiscal year 2021.
“With our attractive portfolio of brands in growing categories and our resilient supply chain, we believe we will successfully navigate these uncharted waters, similar to other challenges we have encountered over the past 150 years, and emerge an even stronger company with healthier brands to drive our growth in the future,” Whiting said.