Brown-Forman Reports 5% Decline In Sales But 'Strong Underlying Growth'
American drinks company Brown-Forman has reported the results for its fourth quarter ending 30 April 2017, which showed that net sales decreased by 5% to $694 million, but increased by 4% on an underlying basis.
Reported operating income decreased by 71% to $212 million, but grew by 13% on an underlying basis. Diluted earnings per share also decreased 71% to $0.37 compared to the same period last year.
Net sales for the full fiscal year ending 30 April decreased by 3% to $2,994 million, but were up 3% on an underlying basis.
Strong Underlying Growth
Brown-Forman, which manufactures spirits such as Jack Daniel's and Canadian Mist, remains positive about this performance.
"Fiscal 2017 was another year of strong underlying growth and excellent progress in positioning Brown-Forman for continued gains in the years ahead," said Paul Varga, CEO of Brown-Forman.
"This year's results translate into the tenth straight year of growth in underlying net sales and operating income, with fiscal 2017's underlying operating income growth of 7% approximating the 10-year average of 8%."
He added that the company is forecasting a "strong year in fiscal 2018, with mid-single digit underlying net sales growth" as a result of continued investment and innovation.
Brown-Forman says that it delivered 'another solid year of growth in developed markets, while the second half results in the emerging markets improved significantly'.
Japan and Mexico were the markets which experienced the highest increase in underlying net sales, with 18% and 15% respectively.
The company returned $835 million to shareholders during the year.
The Jack Daniel's family of brands experienced an underlying growth in sales of 3% for the 2017 fiscal year. In particular, sales of Jack Daniel's Tennessee Honey and Tennessee Fire increased by 4% and 14% respectively.
The company's premium whiskey brands also saw strong growth, with Woodford Reserve experiencing an increase of 19%.
Brown-Forman says that it expects Jack Daniel's to drive growth in the 2018 fiscal year, helped by the launch of new products including Jack Daniel's Tennesse Rye and Slane Irish Whiskey.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.