The Brown-Forman Corporation has reported a net sales increase of 6%, year-on-year, to $766 million (€655 million) in the first quarter of its 2019 fiscal year, ended July 31, 2018.
In the quarter, reported operating income increased 7% to $264 million (+10% on an underlying basis) and diluted earnings per share grew 12% to $0.41.
In-Line Results
“Brown-Forman’s business momentum continued during the first quarter of fiscal 2019, with strong net sales growth as consumer demand for our premium American whiskey brands remained robust,” said Paul Varga, the company’s CEO.
“After considering the estimated impact of order phasing related to tariffs, our first quarter growth was in-line with last year’s underlying net sales growth and keeps us on track to deliver another strong year of top-line growth in the 6-7% range.”
However, Lawson Whiting, group COO - and soon-to-be CEO - hinted at significant trade uncertainties around recent tariffs.
“There remains significant uncertainty around the duration of recently enacted tariffs, but we have been encouraged by the resilience of our business model as we are working to minimise short-term disruption and maintain our top-line momentum,” he said.
“We believe that our consistent reinvestment back into our brands and people positions us well over the long term to continue generating leading returns for our shareholders.”
Trade Woes
The company delivered solid, broad-based growth around the world, it reports, with the strongest results coming from markets outside of the United States.
It estimates that an increase in retail and wholesale inventory levels, largely related to tariffs, contributed approximately two to three points of underlying net sales growth to company-wide top-line results.
It added that the global economy has continued to improve over the last year, but with the recently enacted retaliatory tariffs on American whiskey creating additional uncertainty around the company’s near-term outlook, Brown-Forman said it difficult to accurately predict future results but anticipates an underlying net sales growth of 6% to 7%.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Aidan O'Sullivan. Click subscribe to sign up to ESM: European Supermarket Magazine.
