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Brown-Forman Sales Growth Continues; On Track For Full Year Outlook

Stocks in this article: BFB

The company’s North American whiskey portfolio continued to grow globally, led by 7% underlying sales growth for the Jack Daniel’s trademark. The Jack Daniel’s family of brands continued to enjoy strong underlying demand across price points and brand extensions. Jack Daniel’s Tennessee Honey also showed strong underlying sales growth in the quarter, up 26%, as United States takeaway trends for Tennessee Honey remain robust and the company believes that the international rollout of the brand is progressing well.

Woodford Reserve’s family of brands grew underlying sales by 25% globally. Brown-Forman’s super- and ultra-premium whiskey brands, including Gentleman Jack, Woodford Reserve, Jack Daniel’s Single Barrel, and Collingwood, grew underlying sales 20%. Canadian Mist’s family grew underlying sales 5%, and new flavors such as Maple, Cinnamon, Vanilla and Peach were launched in a few select markets.

Finlandia’s underlying sales increased by 1% in the quarter, negatively impacted by trade inventories related to the fourth quarter price increase in Poland. El Jimador’s underlying sales grew 2% as the Mexican marketplace for mainstream tequilas remained competitive. Herradura and New Mix RTDs’ underlying sales declined 5% and 38%, respectively, and were negatively impacted by the inventory adjustments following fourth quarter price increases in Mexico.

Southern Comfort’s family of brands’ underlying sales declined 2%. Sales growth outside of the United States was driven by the launch of the new communications program in a few select markets, including the United Kingdom and Germany. These gains were offset by sales declines in the United States due largely to increased competition in on-premise occasions.

Sonoma-Cutrer grew underlying sales by 3% as demand for the brand remains solid in both the on- and off-premise channels. Korbel’s 27% underlying sales growth was powered by buy-ins in advance of a recent price increase.

Geographically, underlying net sales in the United States grew 5%. Underlying sales in developed markets outside of the United States grew by 4%, and were up double-digits excluding Australia, where challenging market and economic conditions drove an underlying sales decline of 5%. Underlying sales growth was particularly strong in the United Kingdom, Germany and France, with each country delivering double-digit growth. In Western Europe, the spirits market appears to be slowly stabilizing from a depressed base, and the company continues to drive its growth through market share gains. Emerging markets underlying growth rate of 5% was negatively impacted by inventory shifts related to the previously mentioned price increases in Mexico and Poland. Emerging markets excluding these two countries grew underlying sales by 13%.

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