Brown-Forman missed Wall Street expectations for third-quarter profit on Wednesday, as the Jack Daniel's whiskey maker struggled to keep a tight lid on costs.
Spirit makers such as Brown-Forman have had to raise prices to shield their margins from soaring transportation and input costs.
The company's selling, general and administrative expenses rose 14% to $186 million (€176 million) in the quarter. Advertising expenses also increased 21% to $141 million (€133.7 million).
Its shares fell about 4% to $63.55 (€60.29) in early trading on Wednesday.
Pernod Ricard
Last month, peer Pernod Ricard, the maker of Absolut vodka, said it planned more price increases in the second half of the year in China and the United States to protect its profit margins.
Brown-Forman, however, forecast full-year organic net sales growth in the range of 8% to 10%, which was roughly in line with its prior outlook. The company also retained its high-single digit growth outlook for annual operating income, citing easing supply chain constraints.
Pension Settlement Charge
Net income of the American bourbon whiskey maker fell to $100 million (€94.6 million), or 21 cents per share, in the quarter ended Jan. 31, from $259 million (€245 million), or 54 cents per share, a year earlier, mainly due to a pension settlement charge.
On an adjusted basis, the company earned 25 cents per share, missing analysts' average estimate of 47 cents, according to Refinitiv data.
The Louisville, Kentucky-based company's quarterly revenue rose 4.2% to $1.08 billion (€1.02 billion), edging past analysts' expectations of $1.01 billion (€956 million).
News by Reuters, edited by ESM – your source for the latest drinks news. Click subscribe to sign up to ESM: European Supermarket Magazine.
