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Brown-Forman Reports Strong Start To Fiscal 2013 And Confirms Full Year Outlook

Stocks in this article: BFB

Most other Brown-Forman brands experienced solid underlying growth trends in addition to the benefit from buy-ins taken in advance of price increases.

Finlandia’s 20% net sales growth was fueled by strong results in Poland and Russia. El Jimador’s net sales were up double digits and Herradura grew net sales over 30%, driven by solid performance in the U.S. and Mexico.

Southern Comfort’s family of brands improved from a 7% net sales decline in Fiscal 2012 to a 1% net sales decline in the quarter. The brand grew in the U.S. on the heels of a stronger and more consistent media presence, more effective promotional efforts with the trade, and continued flavor innovation. This positive momentum in the U.S. was offset by a slow start in some key international markets, negatively impacting the brand’s global results in the quarter.

Sonoma-Cutrer grew net sales in the high single digits, as U.S. results remained robust despite weak on-premise industry trends. Brown-Forman’s super and ultra-premium whiskey brands, including Gentleman Jack, Woodford Reserve, Jack Daniel’s Single Barrel, and Collingwood, grew net sales almost 30% in the quarter.

Geographically, underlying net sales outside of the U.S. grew 10%, in-line with domestic rates of growth. Underlying net sales growth was particularly strong in the emerging markets, up 13%, driven by Poland, Mexico, Russia, and Turkey. While the company believes that price increases taken earlier in the calendar year in Germany, the United Kingdom, and France have slowed our Western European rates of underlying net sales growth to the low single digits, Brown-Forman continued to outperform the market and grow sales, with strong results in France and the Benelux countries. The company expects the broader business environment in Western Europe to remain challenging for the foreseeable future. Net sales in Australia grew by double digits, driven by continued strength in Jack Daniel’s Tennessee Whiskey and the launch of Jack Daniel’s Tennessee Honey in June.

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