Brown-Forman Q4 & FY - Preview
Brown-Forman will release its fiscal-2016 results on Wednesday
On Wednesday, Brown-Forman is scheduled to announce its fourth-quarter and full-year results for fiscal-2016. Here, just-drinks takes a look at the company's performance in the three months to the end of April.
- The group's final quarter started with the announcement of a planned investment of US$140m in its Jack Daniel's distillery in Lynchburg, Tennessee. The spend confirmed the company's claim that the Bourbon and American whiskey category as "booming"
- Towards the end of February, the company confirmed to just-drinks that it had launched the Tennessee Fire cinnamon-flavoured Jack Daniel's variant in Australia. Tennessee Fire was first launched in the US in 2014 and is already providing about three percentage points to total US underlying sales growth YTD and 1.5 percentage points to total company sales growth, according to Brown-Forman's first-half results
- Early-March saw the group renew its import and distribution agreements with Altia in Sweden, Finland and Norway. The renewal will see Altia launch Brown-Forman's Woodford Reserve whiskey in Finland later this year
- Research from just-drinks and The IWSR, released in late-March, highlighted the importance of the flavoured whiskey segment to the success of the broader American whisky category. Brown-Forman has surfed this wave of late, both with the Tennessee Fire and Tennessee Honey expressions of Jack Daniel's
- As it announced its Q3 and YTD figures in early-March, the company lowered its full-year forecasts, with underlying net sales expected to rise by 5% versus a 6% to 7% range estimated in December, and underlying operating profits forecast to grow by between 7% and 9%. Late last year, Brown-Forman said operating profits growth for fiscal-2016 would come in between 8% and 10%
- Just after releasing the numbers, CFO Jane Morreau admitted that emerging markets were under-performing developed ones for Brown-Forman for the first time "in several years". Morreau also flagged "continued weakness" in its Global Travel Retail division
- Brown-Forman was highlighted by an analyst in April as being one of the worst-performing spirits companies when it comes to converting social media activity into sales. A note from Societe Generale found that Remy Cointreau was proving the most successful in the social media arena, with Diageo and Brown-Forman "at the bottom end"
- The company closed out its fourth quarter with a return to single malt Scotch whisky, 12 years after leaving the segment. The firm lined up a GBP285m (US$414.5m) spend on The BenRiach Distillery Co, comprising three distilleries, a bottling plant, offices in Edinburgh and three single malt brands – BenRiach, The GlenDronach and Glenglassaugh
Q3 and YTD highlights
- Year-to-date net profits were flat at US$545m
- Net sales in the nine months to the end of January slipped by 2% to $3.08bn
- Operating profits increased by 2% to $807m
- Q3 net profits rose by 2% to $190m
- Net sales in the three months to end of January dipped by 1% to $1.08bn
- Operating profits were up by 2% to $278m
Synonymous with the resurgent American whisky category and riding the wave of the on-going brown spirits renaissance, Brown-Forman is also facing rising competition and the promiscuous drinking habits...
The production and labeling of American whiskey has to be under the Title 27 of the US Code of Federal Regulations. American whiskey was traditionally produced within the boundaries of the US and can ...
Single malt whiskey by definition needs to be made at a single distillery. It is made from fermented mash made with malted grain....
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