Brown-Forman Corporation, the parent of Jack Daniel's, has posted net sales growth of 5% to $1.8 billion (€1.62 billion) in the first half of its financial year.
The company's year-to-date operating income increased by 1% to $600 million (€540.73 million) and diluted earnings per share increased 5% to $0.97.
During the period, reported net sales benefited approximately 1% due to the net change in distributor inventories related largely to the launch of Jack Daniel’s Tennessee Apple, the company said.
Second-Quarter Results
In the second quarter, the company’s reported net sales were up 9% to $989 million (€891.31 million) compared to the same period last year.
Reported operating income increased 6% to $352 million (€317.23 million) during the period, while diluted earnings per share rose 14% to $0.59.
President and chief executive of Brown-Forman, Lawson Whiting, said, “As expected, our results improved during the second quarter. We continue to deliver solid underlying growth from both a geographic and portfolio perspective, despite the uncertain global economic and geopolitical environment."
Geographical Performance
In the United States, underlying net sales grew by 6% in the first half, driven by sustained double-digit growth from premium bourbons, Woodford Reserve, and Old Forester.
Double-digit underlying net sales gain from its tequilas, Herradura and el Jimador also contributed the growth during this period, the company said.
In emerging markets, underlying net sales grew by 5% (+4% reported) in the first half.
Russia reported a 22% increase in underlying net sales due to strong demand for Jack Daniel’s Tennessee Whiskey and Finlandia.
In Mexico, the company saw net sales increase by 4% driven mainly by pricing gains and volume growth for Herradura.
In the United Kingdom, underlying net sales declined 1% (-2% reported), while Germany reported flat net sales.
Category Performance
Jack Daniel’s Tennessee Whiskey saw a 1% decline in underlying net sales due to lower volumes in certain developed international markets and Travel Retail, which offset volume growth in emerging markets led by Russia and China, the company said.
Its RTD (Ready To Drink) products reported a gain in volume that translated in an underlying net sales growth of 7%.
Tennessee Honey posted underlying net sales growth of 7% with volume growth in France, the United States, and Poland, Brown-Forman added.
Outlook
Whiting reaffirmed Brown-Forman's underlying net sales outlook for the year and added that it remained "on track to deliver another year of mid-single-digit growth in underlying net sales led by the Jack Daniel’s family of brands, including the launch of Jack Daniel’s Tennessee Apple in the United States, as well as sustained double-digit growth from our premium bourbon and tequila portfolios."
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.
