Brown-Forman Corporation (NYSE:BFA) (NYSE:BFB) today reported fourth quarter and fiscal year 2012 financial results. Reported net sales grew 6% to $3.6 billion in fiscal 2012, or 9% on an underlying 1 basis. Reported operating income decreased 8% to $788 million, but increased 9% on an underlying basis. Diluted earnings per share were $3.56 compared to $3.90 in the prior year. As expected, reported year-over-year comparisons were negatively impacted by the absence of the gain on sale and associated profits from the Hopland-based wine business 2, as well as foreign exchange for a combined net impact of $0.54 per share.
Looking ahead to fiscal 2013, the Company expects a continuation of fiscal 2012’s strong underlying trends, with net sales and operating income growth in the high single digits, and earnings per share of $3.60 to $4.00.
Fiscal 2012 Highlights
- Underlying net sales increased 9%, an acceleration from fiscal 2011’s growth rate of 4%
- Each of the Company’s twelve largest markets grew underlying sales, including market share gains in the U.S.
- Underlying sales outside of the U.S. grew 12% in fiscal 2012, and now comprise 58% of total sales. Emerging markets drove nearly 45% of incremental growth
- Sales growth was led by the Jack Daniel’s trademark, up 12%
- Product innovation and line extensions, including the successful launch of Tennessee Honey, contributed roughly two points of the Company’s 9% sales growth
- Finlandia’s family of brands grew sales 10%, with record depletions 3
- Underlying operating income increased 9%, an acceleration from 2011’s growth rate of 6%
- $408 million was returned to shareholders, including $216 million in share repurchases and $192 million in dividends
- Brown-Forman’s one-year TSR 4 of 22% outpaced the S&P 500’s 5%
- The Company generated an industry-leading ROIC 5 of 19%
Fiscal 2012 underlying results accelerated as shown below:
|Growth in Underlying||Change in Reported|
|Net Sales||Operating Income||Net Sales||Operating Income|
|Fiscal Year 2012||9%||9%||6%||-8%|
|Fiscal Year 2011||4%||6%||6%||20%|
|Fiscal Year 2010||1%||6%||1%||7%|