Global A&P spend increased 12% as the company continued to invest behind its brands in the quarter. This included media spend on Southern Comfort, supporting the launch of Jack Daniel’s Tennessee Honey in several new markets outside of the U.S., and launching Gentleman Jack’s ‘Order of the Gentleman’ campaign in the United States. SG&A spend increased 5%, and the company remains focused on leveraging the route to market and personnel investments made over the last few years. Underlying operating income grew 4% in the first quarter.
During the quarter, Brown-Forman declared a regular quarterly cash dividend of $0.255 per share on Class A and Class B common stock. The cash dividend is payable on October 1, 2013 to stockholders of record on September 5, 2013. Brown-Forman has paid regular cash dividends for 68 consecutive years and increased the regular cash dividend for 29 consecutive years.
Fiscal Year 2014 OutlookThe company is reaffirming its outlook for fiscal 2014. While results in the first quarter were negatively impacted by last year’s buy-in, the company expects more favorable comparisons in the second quarter. For the full year, the company anticipates high-single digit growth in underlying sales and a 9-11% increase in underlying operating income, which would result in diluted earnings per share of $2.80-3.00. The EPS outlook includes anticipated negative impacts from foreign exchange of $0.03 per share as well as the negative impact of $0.06 per share related primarily to the buyback of inventory in France as the company transitions to an owned distribution model on January 1, 2014. Brown-Forman will host a conference call to discuss the results at 10:00 a.m. (EDT) this morning. All interested parties in the U.S. are invited to join the conference call by dialing 888-624-9285 and asking for the Brown-Forman call. International callers should dial 706-679-3410. The company suggests that participants dial in approximately ten minutes in advance of the 10:00 a.m. start of the conference call.