Brown-Forman, the parent company of Jack Daniel's, has said that it expects to 'continue to face uncertainty' in the coming fiscal year, despite a solid performance in the first nine months of its financial year.
“While near-term uncertainty remains, we believe we are operating from a position of strength, and will emerge even stronger from this crisis, continuing to grow market share and drive long-term sustainable growth for all stakeholders,” Jane Morreau, the company's chief financial officer, said of the coming year.
“The company’s financial and business fundamentals have remained strong throughout the entire pandemic allowing us to deliver solid growth in this challenging environment.”
Nine-Month Sales
Brown-Forman said that reported sales for the nine-month period were up 3% in its home market of the US and by 10% in international markets, however this was offset by a 8% decline in reported sales in emerging markets.
Sales for the first nine months stood at $2.65 billion, which was flat on a reported basis (+2% on an underlying basis).
Its Jack Daniel's family of brands saw underlying net sales fall by 2% on a reported basis (+2% underlying), with weaker performance for its Jack Daniel’s Tennessee Whiskey offset by the group's range of branded RTDs, as well as the Jack Daniel’s Tennessee Apple, Jack Daniel’s Tennessee Honey, and Gentleman Jack brands.
Premium bourbons were a strong performer for the group, it added, growing by 18% on a reported basis (+21% underlying), with its Woodford Reserve and Old Forester brands posting double-digit growth.
“We remain pleased with our year-to-date underlying net sales growth, particularly when considering the unprecedented and challenging operating environment," said president and chief executive Lawson Whiting.
"Importantly, we remain focused on executing our long-term strategic priorities and our commitment to be better and do better as individuals and as a company."
In the group's emerging markets, Brazil, Poland and China made gains, which were offset by 'broad-based declines' in Southeast Asia, India, and several Latin American markets.
Travel Retail
Travel retail continues to weigh on the brand's performance, with Brown-Forman saying that sales in this area continue to be 'significantly impacted' by continued COVID-19 travel bans and restrictions.
During the most recent quarter, the group announced a $125 million capital investment to expand bourbon making capacity in Kentucky, it said, in order to 'meet anticipated future demand'.
Whiting added that the group's strategic priorities have enabled it to build "strong business momentum" during the COVID-19 crisis, "and we believe they remain the right strategies to deliver broad-based growth and value creation over the long term".
© 2021 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
