This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Brown-Forman Reports Full Year 2012 Results – Anticipates Another Strong Year Of High Single-Digit Underlying Operating Income Growth In Fiscal 2013

Stocks in this article: BFB

Finlandia’s depletions grew 7% to over 3.1 million cases, driven by strong demand in Russia and Eastern Europe. The Company’s tequila portfolio enjoyed broad-based volume growth driven by Herradura’s 13% increase to almost 300,000 cases and 10% growth for New Mix. Sonoma-Cutrer also enjoyed depletion growth of over 10% for the full year.

Reported gross profit for the year increased 4%, while underlying gross profit grew 8%. Higher input and fuel costs affected both underlying and reported gross profit trends in the year but inflationary pressures are expected to lessen in fiscal 2013. One way in which the Company continued to invest consistently behind its portfolio of brands was through higher advertising spend, up 8% on a reported basis with social media playing a more prominent role in the Company’s marketing mix. Additionally, reported SG&A increased 6% due to higher investments behind people and route-to-consumer initiatives.

Strong operating cash flow in the year allowed the Company to pay down $250 million in debt that matured in April of 2012, bringing total debt to $506 million as of April 30, 2012, compared with $759 million as of April 30, 2011. The Company had net debt of $168 million, compared to net debt of $192 million as of April 30, 2011. During fiscal 2012, the Company returned $408 million to shareholders through the repurchase of 3.1 million shares for $216 million and dividends totaling $192 million. During the fourth quarter, Brown-Forman paid a regular quarterly cash dividend of $0.35 per share on Class A and Class B common stock. Brown-Forman has paid regular quarterly cash dividends for 66 consecutive years and increased them for the last 28 years, making Brown-Forman a member of the Standard and Poor’s 500 Dividend Aristocrats Index.

Fourth Quarter 2012 Results

For the fourth quarter, the Company reported net sales growth of 1% and underlying growth of 10%. Operating income decreased 32% on a reported basis and increased 13% on an underlying basis. Prior year’s results benefited from the gain on sale and associated profits of the Hopland-based wine business in the year ago quarter which contributed $65 million to operating income in the fourth quarter of 2011. Diluted earnings per share for the quarter were $0.73 compared to $1.13 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 approximately $0.36 per share.

Fiscal Year 2013 Outlook

The Company is forecasting another strong year of underlying growth rates comparable to fiscal year 2012 levels and in-line with historic long-term rates of growth. For fiscal 2013, the Company expects high single-digit growth in underlying sales and operating income while continuing to invest in future growth. Brown-Forman projects diluted earnings per share of $3.60 to $4.00, including an anticipated negative impact from foreign exchange of $0.11 per share. This range takes into consideration the challenging macroeconomic environment, uncertainty surrounding the Company’s planned price increases, and foreign exchange fluctuations.

3 of 6

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs