Log in or Register for enhanced features | Forgotten Password?
White Papers | Suppliers | Events | Report Store | Companies | Dining Club | Videos
Drinks Business Review
Return to: DBR Home | News

Brown-Forman Q2 sales decline 3%

Published 08 December 2016

Brown Forman, the maker of Jack Daniel's Tennesee Whiskey, has reported a decline in its second-quarter profit and sales.

Net sales dropped 3% year-over-year to $830m. Reported operating income fell 4% in the quarter to $291m. Diluted earnings per share of $0.50 increased 3% compared to the prior-year period.

The company had also reduced its adjusted sales forecast. In the first half of the fiscal year, sales fell by 4%.

Brown-Forman CEO Paul Varga said, “As anticipated, our reported earnings were impacted noticeably in the first half by the absence of the brands we sold in late fiscal year 2016, as well as by adverse foreign exchange.

“Underlying growth in net sales and operating income was solid considering the strength of last year’s first half.”

Foreign markets comprise around 60% of Brown-Forman’s total sales. The company noted that its developed markets outside of the US grew year-to-date underlying net sales by 2%.

In the second quarter, sales were negatively impacted due to the delayed timing of holiday season promotions in the UK and key customer buying patterns in Germany.

It also said that net sales in Western Europe grew to mid-single digits and in Australia, the situation was slightly up because of the combined effects of a weak economy and high excise tax environment.

It now expects the adjusted sales to grow between 4% and 5% this year and expects the adjusted operating income to grow between 6% and 8%. Previously, the operating income was between 7% and 9% respectively.

The company has operations emerging markets countries such as Turkey, Russia, Brazil, China, Mexico and Poland. Except in Mexico and Poland, sales had declined in the rest of the markets.