Brown-Forman Underlying Sales Rose 5%, Net Jumped 17%% in Year

Brown-Forman Corp. reports net for fiscal 2019, ended April 30, advanced 5% to $$835 million, or $1.73 a share.  Net sales rose 2% (5% underlying) to $3.324 billion.

The company estimates that sales growth in the fourth quarter and full year were cut 1 percentage point owing to tariff-related lower net prices to distributors in some foreign markets and another 2% because of foreign exchange.

“We delivered solid underlying net sales growth of 6% after considering the one point drag due to tariff-related price reductions,” said Lawson Whiting, president/CEO.  “This growth rate is in line with fiscal 2018, as well as our expectations for fiscal 2020, demonstrating the consistency of our revenue delivery. We believe that delivering sustained, compounding growth is the best way to create value for shareholders over the long term.”

Whiting added, “Although tariffs and higher input costs will negatively impact our gross margins again this year, we believe we are on track to return to high single-digit operating income growth as we move beyond fiscal 2020.

“Our growth prospects remain bright as we develop our premium spirits portfolio around the world, led by the Jack Daniel’s family of brands and Woodford Reserve.”

Here’s how Brown-Forman’s brands performed in fiscal 2019:

  • The Jack Daniel’s family of brands grew underlying net sales 4% (+1% reported) globally, and was negatively impacted by approximately one percentage point due to tariffs.
  • Jack Daniel’s Tennessee Whiskey experienced 2% underlying net sales growth (flat reported), driven by volume gains in markets outside of the United States.
  • Gentleman Jack grew underlying net sales 8% (+6% reported) including strong growth in the United States and double-digit gains in the United Kingdom and Poland.
  • Jack Daniel’s Tennessee Honey‘s underlying net sales grew 7% (+5% reported) and Jack Daniel’s Tennessee Fire increased underlying net sales 4% (+3% reported), fueled by demand for both brands in markets such as the United Kingdom, Brazil and Czechia.
  • Jack Daniel’s RTD/RTP business delivered broad-based underlying net sales growth of 8% (+4% reported).

Brown-Forman’s portfolio of premium bourbon brands, including Woodford Reserve and Old Forester delivered 23% underlying net sales growth (+19% reported), as category trends remain favorable and the company’s brands continue to gain share. Woodford Reserve, the leader in the super-premium bourbon category, grew underlying net sales 22% (+17% reported) and contributed a point to the company’s underlying net sales growth. Old Forester grew net sales double-digits.

El Jimador grew underlying net sales by 13% (+8% reported), propelled by volume growth and higher prices in the United States as well as strong takeaway trends in Mexico despite sizable price increases. Herradura grew underlying net sales by 13% (+8% reported), with double-digit gains in the United States and Mexico fueled in part by continued consumer interest in Herradura Ultra, the brand’s cristalino product. New Mix‘s underlying net sales grew high-single digits, helped by innovation including the launch of New Mix Mineral.

Finlandia vodka’s underlying net sales declined 1% (-4% reported). The decrease in underlying net sales was driven by a competitive retail environment for vodka in Poland, offset somewhat by growth in Russia and Ukraine.

The company cut advertising by about 2%.

This entry was posted in Spirits. Bookmark the permalink.