US: Beam Global fails to hold up Fortune Q2
Fortune Brands has posted a slight fall in net income for its second quarter.
The US company, which owns Beam Global Spirits & Wine, said late last week that group net income for the three months to 30 June slipped by 6.4% year-on-year, coming in at US$232m. Operating income for the period was flat, dropping 1.3% to $427.8m, despite a 4.3% spike in sales, which hit $2.35bn.
For the first six months of 2007, net income dropped more worryingly, down 16.4% to $352m, with operating profit down 7.1% to $688.1m and sales up by only 0.7% to 4.3bn.
Turning specifically to the Beam Global unit, operating income was up an impressive 18.4% for the quarter, coming in at $186.3m. Net sales rose 6.3% to $678.1m. For the year so far, operating income rose 12.5% to $321.2m, while sales at the unit slid by 1% to $1.24bn.
"Fortune Brands' unique breadth and balance once again tempered the impact of the downturn in the US housing market," said Norm Wesley, Fortune's chairman and CEO. "Each of our businesses outperformed our expectations in the quarter and we continued to gain share in key consumer categories. Our second quarter results, though still down, were a significant improvement over the first quarter.
"Reflecting rising consumer demand for premium brands including Jim Beam, Sauza, Maker's Mark, Teacher's and Clos du Bois, our year-to-date spirits and wine case volumes are up at a mid-single-digit rate," Wesley continued. "Operating income for spirits and wine benefited in the quarter from the timing of brand spending that will accelerate in the second half as we launch several new marketing programmes."
Wesley concluded that he expects second-half results to be better than the first half, as the company targets increased spending on its spirits and wine brands. "We'll continue to benefit from the global growth of our premium and super-premium spirits brands," he said. "Additionally, we'll face less challenging comparisons to last year's second half results."
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