Brown-Forman posts profit of $156 million in 1st quarter

Brown-Forman Corp., the producer of Jack Daniel's Tennessee Whiskey, said Wednesday that its first-quarter net income rose 4 percent, driven by sales growth across much of its spirits lineup to overcome a negative impact from foreign exchange.

The company behind such other brands as Southern Comfort, Finlandia vodka and el Jimador tequila said foreign exchange had a 9 percentage point negative impact on its reported net sales growth.

Looking ahead, the company confirmed its full fiscal year outlook of 6 percent to 7 percent underlying sales growth, underlying operating income growth of 8 percent to 10 percent and earnings per share in the range of $3.40 to $3.60.

"Despite a volatile global economy, adverse foreign exchange and increasing competitive intensity, our growth in underlying sales and operating income were impressive," said Brown-Forman CEO Paul Varga.

For the quarter ending July 31, the company reported net income of $156 million, or 75 cents per share. That's up from a year ago, when net income was $150 million, or 70 cents per share. Net sales of $900 million in the recent quarter were down 2 percent from a year ago.

Underlying net sales for the entire Jack Daniel's brand grew by 6 percent in the first quarter, with brand extensions for its flagship brand boosting sales by tapping into demand for flavored whiskeys. Jack Daniel's Tennessee Honey registered 18 percent growth in underlying net sales.

The company said it was encouraged by early sales for its cinnamon-flavored Jack Daniel's Tennessee Fire following its recent roll out across the U.S.

Among Brown-Forman's other leading brands, underlying net sales rose by 3 percent for Finlandia vodka products, 11 percent for the el Jimador tequila lineup, 28 percent for Herradura and 28 percent for the Woodford Reserve brand. Net sales for the Southern Comfort brand dropped by 4 percent.

Brown-Forman shares have increased 24 percent since the beginning of the year. The stock has increased 18 percent in the last 12 months.


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