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Drinks

Brown-Forman Posts 'Strong' First Quarter Results

Brown-Forman Corporation has posted 11% year-on-year growth in reported net sales (+17% on an organic basis) to $1.0 billion (€1 billion) in the first quarter of its financial year.

Reported operating income increased 19% to $343 million (€342.3 million), up 32% on an organic basis, and diluted earnings per share increased 30% to $0.52.

Lawson Whiting, president and chief executive officer of Brown-Forman, stated, “Building on our exceptional fiscal 2022 results, Brown-Forman is off to a great start in fiscal 2023. Our strong strategic position, premium portfolio, continued innovation, and investment behind our brands have once again delivered double-digit revenue growth.

"While there is continued uncertainty in the market, I remain optimistic we can continue this momentum and deliver on both short- and long-term growth ambitions.”

Brand Performance

The Jack Daniel’s family of brands delivered double-digit reported net sales growth of 11% (+19% organic) driven by the good performance of Jack Daniel’s Tennessee Whiskey, reflecting strong demand and higher prices in emerging markets, developed international markets, and the travel retail channel.

The division also saw the positive impact of an estimated net increase in distributor inventories on net sales.

However, growth was partially offset by the negative effect of foreign exchange during the quarter.

Continued consumer demand for flavour drove gains in Jack Daniel’s Tennessee Honey, Jack Daniel’s RTDs, and Jack Daniel’s Tennessee Fire, the company noted.

In the premium bourbons category, the company delivered 35% reported net sales growth (+36% organic) driven by Woodford Reserve and Old Forester and higher volumes in the United States.

Ready-to-drink beverages saw double-digit growth in reported net sales growth. Consumer preference for convenience boosted Jack Daniel’s RTDs/Ready-to-Pours (RTPs) as reported net sales grew 12% (+17% organic) driven by demand in Australia and Germany.

Elsewhere, the Herradura tequila brand reported a net sales decline of 4% due to significant growth in the same period last year in the United States and the impact of supply chain challenges this year.

Outlook

Brown-Forman has reiterated its guidance and expects continued growth in its 2023 financial year despite economic and geopolitical uncertainties.

It expects organic net sales growth in the mid-single digit range for 2023 and reported gross margin to increase slightly considering the impact of inflation and the removal of the EU and UK tariffs on American whisky.

It has forecast mid-single digit organic operating income growth and capital expenditures in the range of $190 million (€189.6 million) to $210 million (€209.6 million).

© 2022 European Supermarket Magazine – your source for the latest drinks news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.

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