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Brown-Forman has posted weaker-than-anticipated first-quarter financial results, missing analysts’ sales and earnings estimates.
The Jack Daniel’s whiskey maker reported net sales of $951m (£721m) in the three months to 31 July, down 4% on an organic basis and shy of Wall Street’s estimate of $997.2m.
Operating income slid by 8% to $281m, while net income fell by 16% to $195m, or $0.41 per share. Analysts had on average expected the company to earn $0.46 per share.
“High inflation and interest rates” were continuing to negatively impact consumer sentiment in the US, while “softening industry trends” led to volumes sliding across “developed international markets” including the UK, Brown-Forman said.
There were net sales declines across the Brown-Forman portfolio, with whiskey, RTD and tequila sales falling on an organic basis by 3%, 4% and 23% respectively.
Sales in the US fell by 4%, led by declines on Jack Daniel’s and El Jimador, Brown-Forman said.
A 6% slide in organic net sales in developed international markets was blamed on lower Jack Daniel’s volumes “across the majority of markets, most notably in the UK” as well as the sale of Finlandia vodka to Coca-Cola HBC.
Sales in emerging markets, meanwhile, fell by 5%.
The group reiterated its forecast for fiscal year 2025, stating it expected organic net sales and operating income growth of between 2%-4%.
“Our first quarter results were in line with our expectations and, as such, we are pleased to reaffirm our full-year fiscal 2025 guidance,” said CEO Lawson Whiting. “We believe we have the right strategy, brands, and geographic breadth in place to effectively manage through the challenging consumer and cost environment.”
Shares in Brown-Forman closed up 1.3% to $45.44 in New York yesterday (29 August).
Morning update
Dairy co-operative First Milk shrugged off headwinds including low consumer confidence, inflation and bad weather to report an increase in revenue and operating profits yesterday (29 August).
The supplier – which specialises in areas ranging from dairy ingredients to B2B milk supply and cheese production – saw profits climb 229.4% to £16.8m in the year to 31 March. Turnover, meanwhile, rose by 2.4% to £476m.
Efficiency gains and sales growth over the past two years had been “masked” by turbulence and high costs in the dairy sector, but were now showing in the company’s accounts, First Milk said.
Read the full story on thegrocer.co.uk here.
Sainsbury’s has struck a deal to acquire 10 leasehold stores from Homebase.
The retailer said it planned to convert the stores into supermarkets, creating 235,000 sq ft of trading space across England, Northern Ireland and Scotland.
It said it expects the total cost of the acquisition and refit to be £130m.
Read the full story on thegrocer.co.uk here
The FTSE 100 has climbed 0.4% to 8,410.48pts this morning in early trading.
Risers include Naked Wines, up 4.6% to 56.1p and Glanbia, which has risen 4.5% to €15.88.
There were no big fallers across fmcg and retail companies monitored by The Grocer. British packaging company DS Smith fell by 0.7%, to 469.8p.
Yesterday in the City
The FTSE 100 finished the day up 0.4% at 8,379.64pts.
Among the risers were WH Smith, which ended the day up 1.9% to 1,282p, and B&M, which was up 1.8% 445.9p.
Marston’s, meanwhile, fell by 3.4% to 40.8p, after the government confirmed it was looking at extending the smoking ban to certain outdoor places including pub gardens.
C&C Group, meanwhile, slid 2% to 154.8p
Overseas, Pernod Ricard and Rémy Cointreau were boosted by China’s decision to hold off on the imposition of punitive new import tariffs on French cognac.
Shares in Pernod, which owns the Martell cognac brand, surged as much as 12% on the news, before falling back to end the day up 2% to €131.15.
Rémy’s shares meanwhile, also saw a 2% uplift, to €73.60.
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