American drinks company Brown-Forman Corporation has reported a strong fiscal year 2018 and has predicted that this positive momentum will carry into 2019.
For the full year, ended April 30, 2018, Brown-Forman reported that net sales increased by 8% to $3.25 billion (+6% on an underlying basis) compared to the previous year.
Net sales growth was benefited by one percentage point from foreign exchange and one percentage point from estimated net changes in distributor inventories.
Operating income increased 5% to $1,039 million (+8% on an underlying basis) and diluted earnings per share of $1.48 increased 8%. Tax reform items in the third quarter negatively impacted fiscal 2018 earnings per share by $0.19, the company said.
Fourth Quarter Results
Financial results for its fourth quarter revealed net sales increased 6% to $733 million (+5% on an underlying basis) compared to the same period last year.
Reported operating income declined 32% to $145 million (-4% on an underlying basis) and diluted earnings per share of $0.23 declined 24%. Operating income and earnings per share were both negatively impacted by the creation of a $70 million charitable foundation, as well as the phasing of operating expenses.
“Brown-Forman delivered excellent results in fiscal 2018, driven by underlying net sales growth of 6.5%, which more than doubled fiscal 2017’s rate of growth,” said Paul Varga, the company's chief executive officer.
"Our results demonstrated an excellent balance across both geography and portfolio, while being driven once again by the Jack Daniel's trademark and our premium American whiskey portfolio. Thoughtful resource allocation, high impact brand investments, and a heightened attention to cost efficiency yielded an operating margin of 32%, an ROIC of 20%, and a total shareholder return of 53% in fiscal 2018.”
Brown-Forman’s sales were greatly boosted by a strong performance in its whiskey sales in the third-quarter, where it saw its net sales increase by 9%, to $878 million.
The Jack Daniels family of brands increased by 7% and its premium American whiskey brands grew underlying net sales by 16%, with 22% growth from Woodford Reserve.
© 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.
