For the third quarter, the company reported flat net sales, but underlying growth of 7%, with reported operating income decreasing 9% and increasing 7% on an underlying basis. As the company noted last quarter, the decline in the reported growth rate in net sales in the third quarter was the result of the expected downward rebalancing of distributor inventories, which had built in the second quarter from advanced buying ahead of anticipated price increases in several markets, the timing of promotional activities, and pipeline fill associated with product innovations. A stronger U.S. dollar and the impact of the sale of the Hopland-based wine business also lowered the reported net sales growth rate for the quarter year-over-year.Brown-Forman’s growth in year-to-date underlying net sales continued to be driven by broad-based geographic gains outside the U.S., as strong underlying growth in net sales trends continued in developed and emerging international markets. Notable double-digit growth was recorded in several markets, including Germany, Mexico, Russia, France, Brazil, Turkey and Canada. Declines in net sales performance occurred in China, Greece, Ireland, and Spain. Australia sales declined as a result of prior year advanced buy-in ahead of anticipated price increases. In the U.S. net sales growth was fueled by the introduction of Jack Daniel’s Tennessee Honey, while Jack Daniel’s Tennessee Whiskey increased by low single digits.
Brown-Forman Year-to-Date Performance Remains On Track – Confirms And Narrows Full Year Guidance
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