Brown-Forman beat second-quarter sales and profit estimates, helped by steady demand for its ready-to-drink beverages and spirits.
The company's famed whiskey products including Woodford Reserve and Old Forester saw sales grow based on brand strength and popularity among consumers with expendable income.
The resurgence in popularity of its Jack Daniel's Tennessee Whiskey, along with an increase in distributor inventories also helped the company beat sales estimates after three consecutive quarters of decline.
However, the company has been plagued by high input costs, especially for ingredients such as agave for its Tequila products, which have offset the benefits of the premium pricing, causing the quarterly gross margin to fall by 8%.
Quarterly Highlights
Brown-Forman posted a net income of $258 million, or 55 cents per share, for the quarter, compared with $242 million, or 50 cents, a year earlier. Analysts on average estimated it to earn 49 cents per share, according to data compiled by LSEG.
For the second quarter, the company posted net sales of $1.10 billion, compared with analysts' average estimate of $1.08 billion.
The company also reiterated its organic sales growth forecast for fiscal 2025 to be in the range of a 2% to 4% rise.
'In Line With Expectations'
The company's first half sales decreased 5% to $2.0 billion compared to the same period last year, while reported operating income decreased 7% to $622 million.
Lawson Whiting, Brown-Forman’s president and chief executive officer shared, “Despite challenging economic conditions, our results for the first half of the fiscal year were in line with our expectations, and we anticipate a return to growth in fiscal 2025.
“We continue to expect our performance to accelerate through the second half of the year, driven by the strength of our strategy, our portfolio, our geographic breadth, and, of course, our talented people.”
News by Reuters, additional reporting by ESM.
